The Importance of Conditions of Sales

Saturday, June 3, 2006

Business In a past life, working as a project manager for a manufacturer of railway equipment, I had to deal with detailed specifications and conditions of contract that would be big thick documents of hundred of pages each.

I used to love/hate these. I would hate them when they were clearly biased in the favour of the customer (for these kind of large multi-million dollar contracts, the customer imposes his rules), and I would love them -or at least appreciate them- when they were fair and balanced as they would clarify every party’s duties and responsibilities.
After leaving that world and starting my own IT business I wanted the relationship with my customers to be as non-threatening and amicable as possible.

I decided -stupidly- not to have stringent legal documents defining the terms of the sales. What I would do instead was spend time making sure that the customer understood everything by explaining at length what they were getting and ensuring that they were no misunderstanding. In my written offers, I would painstakingly describe the technical part of their project and clearly mention what they were getting, when and at what cost.
My rationale was not to scare customers away and instil trust by being verbose and friendly.

Well, that worked for a little while until a particular customer ordered a server as part of a larger web-site project.
Once she confirmed her order to me I promptly ordered the hardware from Dell and paid for it in advance (their requirement for processing the order). A few days later, she phones and calls the whole project off, a project we’ve been spending time on for nearly 2 months.
She just happened to realise that she wouldn’t have time to build the content for it.

Well, that’s where not having stringent sales conditions bit me in the arse. When I told her I already ordered the hardware and couldn’t refund her until I got my own refund from Dell she started to spin her own fantasies and self-indulged delusions and started to treat me like a common criminal. She became a complete lunatic and I really didn’t know how to handle her any longer. I even gave her copies of my correspondence with Dell, bank account statements to show that the server was paid for…
In the end, I tried to explain where her assumptions were wrong and told her she would get her refund at the latest on a certain date, based on what Dell told me would be the longest waiting period. Turned out that it took 6 weeks to get my refund, just in time for hers.

The morale of this story is that:

  • you shouldn’t be naively stupid and think you can base your relationship with a client on trust only.
  • you should have conditions of sales accessible on your website and refer to them in all your correspondence with your clients.
  • you shouldn’t work with people who can have a propensity for confabulation. That particular customer was a provider of dubious alternative medicines and was clearly a lost cause to reason. My first instinct and moral judgment of not working for her was right and I should have listened to it instead of just thinking about the much-needed cash it could get me…

…which bring me to the last lesson: don’t sell your ideals for money, however bad you need it.

Entry Filed under  :  Business,Musing

2 Comments Add your own

  • 1. Alex Hoffman  |  June 10th, 2006 at 7:58 pm

    Great post! Like you, I find that the smiles and statements of trust evident at the start of a project, quickly evaporate as time passes.

  • 2. Myke Myers  |  August 16th, 2008 at 7:51 pm

    Thanks for the good advice. Entrepreneuring requires wearing many hats.

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Renaud This is a simple technical weblog where I dump thoughts and experiences from my computer-related world.
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