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Small Business

Managing a Small Business

Creating a Conflict-Free Business: How to Manage Customer Expectations

Five Tips for Bolstering Business Relationships

Despite frequent usage of an all-too-familiar phrase, the truth is that the customer may not always be right.

When business owners and their clients can't agree on issues like price, logistics, turnaround time and goal, there's a way to handle these challenges more effectively than trimming down a client list, says Brooks Crankshaw, CEO of Highland Ridge Capital in Chicago.

"Getting past conflicts requires several strategies," he says. "It starts right at the beginning of a client arrangement, when expectations are crucial, and continues throughout the relationship. If you don't know how to handle expectations on both sides, you're going to have problems."

Here some tips from veteran entrepreneurs on ways to pick your battles with customers, or even prevent those skirmishes in the first place:

1. Be Specific

When Crankshaw drafts a client engagement letter, expectations are a major part of the communication. His mantra: The client should understand his or her role in the business agreement, as well as what will be provided specifically.

"When both sides know what's expected from the other side, but also from their own, then you can smooth out any disruptions," says Crankshaw. "That letter becomes a reference point, and you can highlight what was expected."

2. Ask About Previous Battles

At Minneapolis-based digital marketing agency DigitalParc, founder and CEO Andrew Rice says many of his clients have had problems with other agencies in the past. "They're skittish and often unhappy," he says. "But if I don't find out what went wrong before, then I don't fully understand their expectations going forward."

3. Avoid the Executive Bait-and-Switch

Clients sometimes bristle when a CEO or other top executive is present for the engagement and negotiation of a client project, but then steps away when the actual work begins. That can leave customers feeling like their expectations are already not being met, says Rice. "It can occasionally take more of my time than I'd like, but I make sure I'm available for every customer question," he says, "That's what they expect. They don't expect me to sign them up for the business and then disappear."

4. Revise Expectations When Needed

As projects and client engagements go through various stages, there will likely be changes as a result. Managers on both sides might leave for other positions or results might require a shift in strategy. Whenever there's a change, expectations should be revisited, Rice says. "You have to see the relationship as dynamic," he advises. "There should be flexibility on both sides."

5. Communication Is Key

Disagreements need to be handled face-to-face, or at least voice-to-voice, says Crankshaw. "If there's any friction, get on the phone," he says. "If it's really bad, get on a plane. You have to do what it takes to bring a relationship back into line, and it's almost impossible to do that over email."

Like any relationship, the connection between a business owner and a customer can become frayed when expectations are misaligned. By focusing on what each side brings to the relationship and fostering discussion about what's working (and what's not), Crankshaw and Rice say it's often easier to avoid customer battles or handle them successfully.

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