Customers are fickle; they change their minds. You can spend a lot of time and energy with a customer, figuring out exactly what they want, negotiating a fair price based on the decisions reached. Then later, whether from whim or reason, they change their mind. But they may not want to change the price or the terms.
Frustrating! And, often, expensive.
Of course, when the change is easy and doesn’t cost money, you’re happy to oblige. After all, you want to keep your customers happy. So what if they decide they want the blue widget instead of the red, and you’ve got both in stock?
But usually, last-minute changes disrupt our businesses or entail expenses. What then? Just eat the cost? Pass along the expense and risk alienating a good client? What if you feel like they’re purposefully taking advantage of you?
Be clear about terms upfront. Often, we’re so eager to make a sale that we neglect to mention or underplay any change penalties or additional costs a customer may face. Of course, you don’t want to mention extra fees first thing in any negotiation, but before the customer signs on the dotted line, make certain they understand all the terms, including the fact that if they change the terms, the cost can increase.
Get it in writing. You can avoid some misunderstandings with a written agreement, whether a contract, purchase order, or signed proposal. But don’t depend on the client to read the small print. Make sure you clearly point out the penalties for changes, if any. If it’s not your practice to ask for a signed agreement (and why isn’t it?) then send the customer an e-mail or letter, confirming the terms of your oral agreement.
Explain limits on special deals. Let’s say you’re able to offer a customer a lower price because it’s your slow season or you have an overstock of some inventory. Make it very clear – in writing – that what you’re offering is a special, limited time offer, not available after a certain date or applicable to other items.
Always consider the long-term cost/benefit. Bend over backward to accommodate an established, long-term good customer. Even if you have to suffer a financial loss on this one order, it’s worth it to keep the relationship. Face it, that’s a cost of doing business. Of course, it’s just good sense to let the customer know you’re absorbing the costs for them; hopefully, they’ll appreciate your gesture.
Don’t set the wrong precedent. Be particularly careful with new customers or new staff members of existing customers. Don’t let your eagerness to develop an ongoing account allow you to set unprofitable patterns. If you do accommodate their changes without a fee this time, be very specific that next time there will be a charge.
Develop clear change policies. If you’re in a business where customers are likely to make alterations or revisions, devise a clear policy relating to those changes – what kinds of alterations will result in extra charges, and which will be free.
Develop policies that encourage customers to be committed. Few things are as frustrating as customers who back out of deals completely. Clients and customers don’t realize that, often, even before you’ve spent money out-of-pocket, you’ve rearranged your schedule or begun work on their project. This is particularly true in consulting businesses, where you may have started research.
Nonrefundable deposits are typical and an effective method to encourage customers to be committed before they give you the go-ahead. In some industries (for instance, real estate), buyers are typically required to make a substantial deposit that they’ll forfeit if they back out of the deal. Don’t be afraid to try this if it’s at all appropriate in your business.
Nothing will completely erase the frustrations of dealing with customers who change their minds – and their orders. But having clear policies and nonrefundable deposits can reduce the confusion – and the cost – when customers become fickle.
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
