/Opinion/ Good customer relations
04/11/2008 | Filed under Discover > Opinion
Working with customers who keep changing their minds is a nightmare, but careful planning can help you to manage their demands, says Chris Barling
Saying “the customer is always right” may be OK when you’re selling baked beans in Tesco, but life is much more complicated when it comes to professional services such as web design. Apply this rule to a customer who keeps changing their mind and your project will quickly turn into an unprofitable nightmare. No, simplistic slogans are not enough to succeed in this business.
The key principle for good customer relations is to set expectations correctly. This isn’t always easy. In the sales stage of a project, you need to be as positive as possible. However, as you get towards the go-ahead, it’s vital to frame the whole project so each party knows exactly what’s expected.
Coming up with a specification for what the customer wants is difficult enough, but it’s almost impossible at the pre-contract stage. To overcome this problem, you have to make and communicate some reasonable assumptions about the scope.
One approach to costing is that you charge for time and materials. Here, you estimate the time that will be taken and quote that price, but actually agree to charge them for hours worked. While the project is within reasonable bounds, you can restrict yourself to charging the amount you suggested, even if you work some extra hours. However, as soon as the customer starts to become demanding you can dust off the small print and restrain them with an “I can charge more but I don’t think you’d want me to” conversation.
The trouble is that few clients will agree to this modus operandi. A good alternative is to provide a proposal that includes something along the lines of, “Whatever work is not explicitly included is excluded.” This is easier if you’re using a commercial package, for content management or ecommerce, which already has deep functionality. You can then say that the website will include all functionality supplied by the particular product, plus the list of key requirements that you’ve teased from the customer – and nothing else.
This provides a clear statement without being unreasonable, as a huge list of functionality is included. You can apply a similar methodology to design work by stating that the product will be of similar complexity to a named design, with a maximum of, say, three outline design proposals from which the customer can choose.
Make an estimate
Based on the scope, getting your own estimate right is critical to business success. My tip is to always get at least two people to estimate the work, even if one of them is only a friend. Then use the highest estimate. Keep records and, after each project, honestly compare the estimate with the actual effort, so that you can improve your estimating skills over time.
It’s a pain, but it’s vital to have a contract, even if it’s only one page long. With a contract you can formalise the business relationship, making you look more professional while ensuring that your client isn’t stringing you along. After all, if they intend to go ahead, why wouldn’t they sign a contract? Maintain this discipline and it will substantially reduce the risk of signing a dodgy deal in leaner times. Sometimes it’s hard to remember that bad business is worse than no business.
Contracts should cover the following points:
The scope, using the time and materials or “everything not included is excluded” approach.
An upfront payment and final payment, which is due when you’ve completed the work (when no problems have been reported for, say, two weeks, or the customer is using the work commercially).
Exclusion of consequential liability (for instance, you aren’t responsible for reimbursing the profit the customer might have made if the work is late).
Dependencies on work the client must complete.
What happens if the client cancels or changes their mind (half the money becomes immediately payable and they cannot use the work).
Setting expectations of scope, estimating well and having a contract are the tools that produce good relationships, within which you can apply change control. The mantra of this is, “Of course you can have that new rotating widget, it will only cost an additional £500 and move the delivery date to the fifth.” This way everything is clear, and disasters caused by customers frequently changing their minds are avoided.
Is the customer always right? It may seem strange to say, but it’s your job to make sure they are. That way you can both make a decent living.
Chris Barling is the CEO of ecommerce software supplier, Actinic
Comments
Liam / 04/11/2008 / 22:49 / http://www.spindogs.co.uk
Great post! its so crucial to explain everything fully at the start of a project, I often find this can help with the sales process because it brings a level of trust and confidence in your ability which sometimes pure sales guys cant give...
Facio Design / 06/11/2008 / 13:35 / http://www.faciodesign.co.uk
As a freelancer, I often find that my personal clients expect a little bit extra for free. When i started out I'd do extra little bits here and there and think of it as being part of the initial work, but it's not. These little things can really add up. Over time I've learnt to add to any quote that anything beyond the initial brief will need to be costed at the time of requirement.
As long as you're up front from the start and clients know what to expect, anyone in business will appreciate that. After all, they're budgeting exactly the same as you are.
Jeff / 14/11/2008 / 09:36 / http://www.redfishbluefishdesign.com
I agree that projects can balloon if not kept in check - but that's where a good brief can come in (or needs analysis as we call them). Some of these tactics seem hardnosed - but would work as long as you practiced tack and grace ;). However, billing by the hour might not be necessary (unless the customer wants to change the requests). Having a properly outlined project is essential to project management, and outlining it for the customer for them to sign off on is key to protecting your time! If they've agreed to pay for X, X, and X on their site development and they start asking for Y to be implemented, then you have the freedom to say "well, that's a great idea, and we'd like to implement that for you for an additional $____. Would you like us to go ahead and get that ready for the launch, or would you like to arrange for that to be added next quarter?" Then you can probably get more sales out of them later. As for the design portion, before you can accurately give a quote, you're going to need a sketch and an idea of what you're doing. So, why not show it to the customer and have them sign off on the design phase. Because we do an in-depth needs analysis, we don't start work until the customer signs off on the design and the programming aspects. This protects us, but it also ensures we have GOOD customer relations. Later, when a customer starts asking for more, we can go over what they agreed for because it's in writing. Then there's no confusion, and the customer doesn't feel like the rug is being pulled out from under their feet. Good design might not require it, but good relations do. Protect your best revenue generator -- word of mouth.
