How Small Business Owners Can Manage Expectations Without Losing Clients

by / Wednesday, 28 May 2014 / Published in Productive Business Tips

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Management is a skill that requires practice and reflection, like any other. Where management differs from other elements required to run a business, however, is in the fact that it pertains to many different situations, from engaging employees to the very important task of managing customer expectations. Managing expectations will save you from many unpleasant situations caused by a lack of adequate communication between you and your clients. Essentially, this type of management hinges on clear communication of what your business is able to deliver and for what price in what time frame. Like many principles of small business, it’s based on common sense and being proactive, but again, like many elements of business, it’s not always something that people follow through on.

In the case of important relationships, business owners can be tempted to say whatever will make the sale. The problematic part of this strategy, besides the obvious issues caused by discrepancies between what is promised and what is delivered, is that business owners can create expectations on the part of these important clients that don’t allow them to actually make money. The costs required to over-deliver on a routine basis can turn what once had the potential to be a productive relationship into a classic case of the single over demanding client that stifles the growth of a business. As a rule of thumb, if the client is asking for something that your business doesn’t have the capacity to do, unless you have a way of creating the capacity to handle their business under a time crunch, then you should be honest with them. A client that is interested in products or services that you don’t offer is not really a qualified client.

When speaking to a client about a future project, you should clearly delineate the bounds of what you are able to deliver, and explain what charges you will have to make for rush jobs or other custom options. If you are going to have to make up costs because of extenuating client demands, then let them know up front. A relationship with a key client can turn sour if you retroactively inform them of charges that you need to make to turn a profit, so full disclosure is a prudent strategy. This being said, business owners should be aware of the fact that a list of potential charges can scare a client off if you rattle them off without providing a context. First listen to the scope of their project, then make your best guess as to where it falls on your scale of options, taking care to describe what your client would be paying for, and any other options that they might wish to choose.

It may be helpful to contextualize your pricing with the market rate. Most of the time, your clients will be alright paying the price you need them to as long as they understand what it is that they are paying for and why. If you point our where your pricing falls in the larger environment of your industry, and the reasons why the value that you offer is superior, it not only showcases the strong points of your business, but it also reassures the client of what they are purchasing.

Photo Credit to FTTUB on Flickr

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