Managing disputes with suppliers and customers is an art form. You need to learn how to deal with your emotions and also rely on a good memory and also your own documentation.
Unfortunately, all businesses will encounter a dispute at some point, and it’ll be likely to be with one of the more high volume relationships like customers. While a customer loves your product and service 9 out of 10 times, that one time when you find yourself in a dispute you’ll want to have some fall back position to lean on and know you are prepared. There are numerous areas where disputes arise, and can difficult to navigate for a number of reasons:
• Legal Reasons: If the dispute is very serious, you could get sued or find yourself needing to sue someone
• Costing Time: A dispute will take time away from the most important
thing for any founder – running your business.
• Customer Lifecycle: You can lose a customer and all of the revenue that the relationship might have generated going forward
• Supply Chain: If the dispute is with a supplier, you may need to find a new organisation to work with, which can have significant cost implications
• Brand Equity: There are reputational risks, which are a particular issue if your startup has a social media presence
SUPPLIER DISPUTES
Managing suppliers is sometimes very different to how you manage customers. This will depend if you are a B2B (Business to Business) focused business or B2C (Business to Consumer). While you can do your best to develop strong and productive relationships with suppliers, sometimes disputes arise. For a B2B business some of the below questions highlight the communication between business owners and suppliers
• How will you ensure consistent product quality?
• Who is responsible if product quality is below standard?
• Does the supplier require a minimum order?
• Will you pay upon receiving the goods?
• What happens if the supplier sells out or discontinues particular stock?
• How can you compare suppliers?
Your legal documents, specifically your supplier agreements should address issues around quality, payment and subcontracting. Remember, you need to build relationships but also protect yourself and address early on how you will deal with suppliers will ensure you protect your business and comply with any relevant laws.
Most disputes can be resolved quickly using a common sense approach. Some quick tips below may help you identify and resolve the issues quickly and easily:
- Check your facts – if you have a written contract, read it carefully. Your contract may help you understand the problem, or help you identify a dispute resolution clause.
- Contact your supplier – you may find a resolution by simply talking through the issue with your supplier.
- Listen – if you put yourself in your supplier’s position, you may be able to recognise the issue.
- Keep records – records will help you keep track of what has happened. You may need these records if you take the matter further.
Remember, the issue could be a simple misunderstanding. You may not know all the circumstances or facts. Give your supplier the benefit of the doubt!
MANAGING CUSTOMER DISPUTES
Most often, a customer will make a dispute if they believe they didn’t get what they paid for, product or service. It’s meeting the expectations of your customer which is toughest, as disputes commonly arise because of a difference in how these expectations between you and your customers are met or managed. When your business doesn’t deliver to this preconceived expectation seldom the customer looks at themselves in the mirror and blames themselves for their decision to set this expectation to what you are selling.
When customers get upset because of what they thought your business would provide, the quality of the product or the delivery speed differed to their expectations you might get a email blast, and spray over the phone or a negative review online, though in simple terms most disputes will unlikely become legal, and just potentially damage brand equity and brand reputation. Refunds, replacements and amicable solutions to the common problem is always a better way to go. It might hurt the ego and cost a few extra bucks though concentrating on positive business, solving problems quickly and looking to continually build brand equity will have customer disputes and small speed humps that you simply bounce over.
Quick Tip
Having a solid set of business terms and conditions is a good document to build once you have all your products and services ready to take to market. When you clearly provide your terms and conditions it is a first form of clear communication and line of defence that can provide a measure of protection if a customer tries to sue you for damages they claim to have suffered as a result of a failure in the product/service you have provided. Also, when you are building your business, you should include a Business Plan And Business Strategy that would have a section dedicated to dispute resolution and how to manage issues like this.
RESOLVING DISPUTES
Long term business success is dependent on a customer-centric approach to building products, services, and yes resolving disputes. A business that has a customer centric approach to dispute resolution will be one with a higher EQ and likely understand the value of relationships better than a business that doesn’t. Disputes and complaints can happen at any workplace, and effective dispute resolution may need to have the Fairwork Ombudsman engaged. A dispute exists when one or more people disagree about something and the matter remains unresolved. Often disputes can be settled quickly and informally in the course of everyday work. However, if people can’t agree on a way forward or if the dispute is about a serious matter, you might need a more formal approach.
So, what is a customer-centric approach to resolving disputes?
It’s purely to put yourself in your customers shoes and think about what would make you feel better. The olive branch exchange like offering discounts, free services and other financially welcomed resolutions will always go a long way. Retaining customers is key, as they are hard fought and won, so doubling down on the customer service here is the first logical approach. The disgruntled customer might not ever be a repeat customer, though you don’t want them trolling your Instagram feed or leaving a negative Google My Business review.
Below are some tips on a customer-centric approach to dispute resolution –
- Offer a discount
- Refund the service or good
- Offer a free upgrade
- Train staff on dispute resolution processes
- Open up communication channels
- Give personalised attention
- Resolve quickly
If the worst-case scenario does happen, and things get legal, our best advice is to stay out of court if possible at all costs. There are no winners for a small startup business in court. Court proceedings are very expensive, can take a long time to be resolved and can be disastrous from a brand building perspective. If the courtroom calls, best get legal advice. Contact us at COG Branding to and we may be able to provide you a good referral to someone in our professional network that can help you manage disputes in your small business.
