The one area where I see more disputes than anywhere else, is in mismatched expectations.
I see website designers having to bring claims against customers for unpaid fees because the customer isn't happy with the design yet the website designer feels they delivered exactly to the brief.
Or perhaps it’s the events company being sued for an event not going as the client had hoped and for the resulting financial loss to the client.
Or maybe it’s the furniture maker going bust because he had invested in expensive raw materials to fulfil an order but the customer refused to pay because the furniture didn't have the finish she was expecting.
If you want to prevent claims from unhappy customers and avoid customers not paying you in full, ensure that your customers’ expectations are met.
Here are my top tips to avoid mismatched expectations:
1. Understand your customers’ needs and expectations
This involves a lot of communication upfront. Don’t presume what your customer wants or needs. Practice some active listening and don’t be afraid of really questioning them to find out their motives and drivers and to understand their business.
2. Document it
Just get out your pen (or more likely your laptop) and document what expectations each party has about the contract.
If you have standard terms of business (which I would always recommend), then for each and every client you need to write down in a Proposal, a Schedule or whatever you want to call it, in as much detail as possible, what you are actually going to provide.
So if that’s a website, it includes things like the different page templates, the number and name of the pages, the look and feel of the site, whether hosting is included, whether ongoing support is included, whether design is included (or just the development), whether email accounts are included and if so, how many, whether the customer is responsible for adding content to the site or whether that is included and very importantly the timetable for delivery of the phases of the project and whether that is dependent on the customer providing input and/or materials.
And if you’re a furniture maker, it includes such things as providing pictures of similar furniture, providing dimensions, providing samples of the fabric, providing pictures of the design etc.
If you’re an events organizer, it includes such things as the layout of venue, the design of the banners, the facilities available, the timing of events, the people involved, the guest list, marketing efforts, food and drink and every minuscule detail you can think of.
And make sure you don’t just rely on industry terms that may not be understood by your customer. Actually spell out what those industry terms mean.
It sounds obvious, but I am always amazed at how many small business owners fail to have any kind of written specification. If there is no evidence as to what has been agreed, it is very difficult to legally resolve any dispute as the case may turn on oral evidence about what you did or didn't promise.Don’t over promise
3. Don’t over promise
It is tempting to over promise on what you can deliver in order to secure the contract. Avoid the temptation as it is likely to land your business in hot water.
4. have regular update meetings
Keep communication lines open with the customer at all times to check that they are happy with progress. If they aren't’, take immediate steps to try to resolve the issue. If at this stage you realise that the customer was expecting things outside the scope of the project, you should negotiate and agree a change notice – that is a written document that changes the terms of the agreement and documents any increased fees, changes to the timetable etc.
A final thought is that there will always be customers who are never happy and will always want more. If you’re working on a big project and you can’t persuade the customer to pay all the amount upfront, document payment schedules (with the payment trigger carefully set out) to minimize the risk of non-payment at the end of the project.
© Suzanne Dibble 2013