Building Customer Trust in Business- Turning Mistakes into Opportunities

Welcome to building better developers, the developer podcast, where we work on getting better step by step, professionally and personally. Let's get started. Well, hello and welcome back. We are building better developers. We are in the middle of a season, actually not really middle pass. We are over the hill. We are on our way down cruising towards the end of a season called building better businesses where we're focused a little bit more on the business side of this stuff, the entrepreneurial side of developing newer. Also we are the building better developers podcast. I am Rob Brodhead, one of the founders of said podcast. Also a founder of RV consulting where we sit down with you and help you figure out how to use technology. There's a lot out there. We walk through your business, your processes, your procedures, even your people, the things that matter that make your business home and the things are going to make it home at a better speed and be more productive, to be more, you know, generate more revenue and make your customers happier. All those things because technology, believe it or not, can do that. And we have spent a lot of time in technology solving problems through innovation, integration, simplification, automation. We look at what you have, where you want to be. And we craft that recipe for success that is specific to your organization. And we help you, whether it's build your organization, build your customer base, build out your technology, whatever it happens to be, to make that most critical and often very pricy investment that you make in technology, give you the best return on investment that you possibly can. Now, good thing, bad thing. Oh, there's so many things right now in this time of turmoil. So I'm going to go with a good thing, bad thing that may be near and dear to some of your hearts. In recent days, the stock market has done some things. We'll just say it's actually once in a lifetime corrections that now happen fairly regularly. Like the last time it happened was, I don't know, four or five years ago when COVID hit and suddenly everything went haywire. And then there's been a few other times that go back to, depending on how old you are, back to like 9-11 and some of those kinds of things that really messed with your pocketbook in the 401k and the investment world. The bad thing is, is I was like, you know what? I want to like get into my steady buying and sort of start working my way back in where you do, you know, you just put some money in on a regular basis so you don't have to worry about it. Well, the first chunk I did was right before it plummeted. Not a good thing. I killed it in a bad way on timing. However, it has recently bounced right back. So it's sort of the rule of thumb I had is like, don't sweat it. It's sooner or later we'll come back. This time the good thing is it came back within like three days. So it's sort of like, you know, it's one of those is like when it was, it could have been an opportunity to make a lot of money. But the good thing is I didn't lose a lot of money. So I'll take that as a win. That's like my partner on the other side who's going to introduce himself. Michael, go for it. Hey, everyone. My name is Michael Melasch. I'm one of the co-founders of developer NURB, Building Better Developers. I'm also the founder of a company called Envision QA, where we work with small to mid-sized businesses, clinicians, medical offices to help them understand their technology. You know, is the software working for them? Or are they having, or are they struggling to work with the technology to essentially do their jobs? We come in, we help you do an assessment, figure out your processes, and then we analyze the software to make sure that you really are using the right tools for the job. If you're not, we can help you get the right tools or we can build something custom that meets your needs. Let's see, good and bad this week. Well, similar to what Rob was saying, you know, the markets are in turmoil. I had a little bit better luck. I have a financial guy that I waited a couple of days for things to really go down and I called him up and I said, okay, so what can we buy? And his comment was anything that's down that gives high dividends. So we went that route and I think we're going to, even though the stocks are down, historically, these companies tend to pay out better dividends. So I'm looking at that kind of route for my portfolio. Kind of the other bad thing, I guess a little bit, we mentioned last time, you know, we had some storms come through. I've been walking the property and I'm finding more and more trees down and the ground is so wet. Still, we've got some erosion issues going on. So I am going to be spending the next few weeks as it dries, cleaning up the yard. Not a fun time for some of us, but that's okay. I'm sure you will get your exercises at any rate. This episode, I want to go into, this is a little bit more, this is definitely one of those more, I guess, a more serious topic, one that can make people a little bit uncomfortable because we're going to talk basically about money. Then we've talked about rate and things like that. But this time, I don't think we've ever talked about, we have talked a little bit about like, going in with a lower bid and loss leads and stuff like that. But this one is more about like two things, giving back money or when you shouldn't give back money. When you know rebates in the form of like, you know, you didn't, whether you didn't come through or they think you didn't come through or you did something that you're, you feel like it's on you. So you want to reward your customer back, things like that. Now, let's go with the my fault kinds of giving back. Now generally speaking, it depends on a lot of our contracts and our agreements are going to be based on some level of delivery, whether it is now if it's fixed bid, then it's like, there's probably there should be very specific requirements. And if you meet the requirements, then you get paid. That's the contract side of it. Now those, if those requirements are squishy in some way, and then there's arguments about those, then you messed up when you got that thing written. Now that is where you need to protect yourself is make sure that you are very sure that if you go and actually even in an hourly rate kind of thing is that you're very specific on what you're providing. So look at it as if it goes wrong and somebody come back and say, well, you didn't do this. You want to be able to say I didn't because that wasn't part of the agreement. You don't want to be in a situation where it's like, oh yeah, I forgot. Because that means that would be an opportunity for you to say, okay, I'm going to give you discount or I'm going to get money back or something like that. Now another thing that I think I have found to be very useful in my long term relationship with customers is that there are times because almost all of my agreements are hourly rates. There are times that I have given them three hours that I have given them discounted hours for a while. And even times when I have like wiped some of an invoice off or maybe an entire invoice, I may be like, you know what I invoice you, but something came up and we looked at what it is and I'm just going to wipe that off. I can give you a good example of doing so just recently and how I handled it because I think it needs to be something that we think of as a tool on a regular basis. I know we're probably used to we get paid and it's like, oh, now it's my money. Nobody gets to touch it. But that's not how it goes because the government's going to touch the heck out of that for one thing. But the other thing is that sometimes we're paid because there was an assumption that something was completed or something did win a certain way or we were paid. But this is a way for us to sort of pay them back to pay them because they have suffered damage or harm or something like that. Now you do want to be careful in some of these because you don't want to be in a situation where you're basically telling them that you destroyed their business and you're going to give them $10 back because if you did, unless your business was like a really crappy lemonade stand, they're going to come after you for a lot more money. And in the world of the lawsuits and all that kind of stuff, you have to be very cautious with that. However, a little bit can go a long way. Now recently I had a situation and this actually goes back flashback to a prior podcast episode where there were some emails that I did not receive and these were email. Well, and I received them. I just did not, through the stuff that was going on, did not react to them in the proper amount of time. And the customer came back and was like, hey, did you see it? I was like, yeah, but oh, I misread it. And so I took it all myself because it was my fault. I had other things going on. I was not paying enough attention and missed some stuff. And so I fixed the issue that they had. And because it did, it probably cost him some level of money, whether maybe some customers weren't as happy or he didn't get as many customers or something like that. He was in the middle of an advertising campaign that may have impacted the numbers on the advertising campaign. That wasn't anything huge. So it just made sense for me. I wanted to say, hey, that was my mistake. I want to just not only apologize, but I also want to make sure that I help you out with that. I'm going to share the burden. So I said, I'm going to wipe some because there's outstanding invoices. And even though there are outstanding invoices, I still say, I'm going to forgive some of those. I'm going to knock some of those hours off on those invoices as part of the making it right with you. If your cable goes out for a while, or for those of you who don't even know what cable is, if your internet goes out for a while or something like that, you're going to expect some level of maybe something to come back. Now sometimes they just won't charge you. They'll say, well, you didn't have internet for a day. So hey, guess what? We'll be nice and won't charge you for that day that we didn't provide the service. That's not what you want. You don't want to be those people. You want to say, hey, this puts you out. So I'm not only going to not charge you for that. I'm also going to give you some money back or something to help you ease the pain. And that's really what it is. Is this is where we want to ease the pain and the discomfort of our customers, particularly in these cases where we actually are the reason for it, that we fell short on something that they expected from us. Now even if you are essentially going above and beyond, if you say to a customer that I'm going to provide above and beyond service, or I'm doing this for you, or you set that expectation and then you fail on it, then you still need to consider like you've effectively committed to that. So you need to make sure that you are, you know, that you're helping them out and you're making good. Now the amount we're not going to get into because it can vary widely. It may be there's some cases where I've taken like an entire project and said, you know what, I like it wasn't the quality that I wanted it to be. And I will just waive the whole thing. Other times it'll be certain hours or there'll be free follow up hours or I'll charge half rate for quite a while to just sort of like offset some of this stuff. There's a lot of different ways you can do it. It depends on what your revenue, your like how your revenues go in your cash flow and things like that. And also the level of oopsie that you did the level of your mistake. Before I pass on Michael, I want to flip to the other side because this is another one that has been an issue at times. And that is where you do deliver, but the customer decides that you should have delivered something else and they balk about it in some way, form or fashion. Now usually I've had, I've been protected, protected most of the time when I've done this through places like Upwork and things like that, where they have people that will provide remediation services and they'll make sure that you keep talking and they'll try to, you know, they'll be impartial judges and things like that to help you out. And what usually happens is actually in the, all of the cases, I think that I've run into actually they were not fixed bid projects. And that was the thing is that the customer had in their mind, it's a fixed bid project. And even though in at least the one case I said, you know, initially I gave them a rough estimate and I said, this is a rough estimate based on what you said, we could get this done and you know, I don't remember the numbers, but it's basically like, let's say for example, we can get this done in a hundred hours and it's going to cost a hundred dollars, you know, or whatever it's going to be. Well, and it was, you know, it had the caveats of, well, we don't know about this. We don't know about this. We don't know about this. These could all cause problems. Well, guess what? Every one of those things occurred. They all caused problems. And then the customer was like, was in denial basically and said, hey, you know, you should be able to finish this in a week or two, right? Like, well, I don't know. We can see, but like, we're going to need, you know, need help from you, need input from you and there's still these unknowns. And then those unknowns come up and then it's like, oh wait, well, those are going to cost, you know, those are going to change the whole aspect of the project. And there were several things, which is these are the gotchas you got to worry about, particularly picking up existing things as it was like, well, we've already done that. So this works fine. Even though part of the project was, it was stated that what was done before socks and wasn't very good and was out of date and needed to be replaced. But it's like, well, but you know how it was done. So you should be able to just really easy do it. And I was like, maybe if we can reuse that stuff. But then along the way, the customer is saying, well, don't reuse any of that start from scratch. It's going to be faster. So it's on the customer in that case. And particularly in this case, I was felt very vindicated because throughout the thing, I could see that I had paper trails and everything to say, look, this is what it's going to take. Here's where the concerns are. It was done on an hourly basis along the way. So it wasn't like it was a surprise, which is one of those things you got to watch out for. You don't want to go bill for six months and then suddenly send them an invoice for six months. And then they now suddenly are like, well, wait a minute. I didn't realize there was that much. You want to keep that regular communication. You want to be letting know that, hey, things are coming up. There's we're billing or we're doing work or invoice them on a regular basis, things like that. Ideally, invoice them and they should be paying you on a regular basis because you don't want to end up in a situation, which I have also been in, where you have been too gracious in the invoice cycle. And you've invoiced them along the way. And now suddenly they want to hold two months worth of work hostage because they figure, well, now they're just going to threaten to not pay. And then you're going to be stuck having to do free work for them because they've got that leverage. I have also had a customer that I literally walked out based on that because he said, hey, I've got X amount. They paid half of it. And they said, well, you know, I'm not going to pay this other half because I think you need to do these three other things that were actually very minor in the grand scheme of things. So he figured he was going to be able to just get some free stuff. And I was like, no, you can pay that up and we'll talk about doing the extra stuff or I'll just walk away. And we ended up walking away because he wanted to argue that he needed those extra things. Those are the kinds of things, though, that are tough conversations because you have to realize that you may leave money on the table, but you also have to realize that you may be throwing good money after bad if you try to chase those things down. So, you know, protect yourself where you can. And if you're in the right, stand up for yourself and say, yes, I did this. Like, go to your contracts, go to your things that you've done, the things you've put in place and verify them. And if you haven't, then learn a lesson and next time do it better. I think that's a good place to stop for now. So I'm going to throw this over to you, Michael. I'm like, what are your thoughts and maybe where you want to go with this conversation? Yeah, so we've been at this for a long time and there's been many situations where, you know, you make a mistake or you aren't delivering what you promised. And at the end of the day, as a business owner or as a developer, regardless of what your business is, take ownership. If you messed up, own it, fix it or address it and help the customer out because you made the mistake. The customer didn't make the mistake. So in those situations, like Rob said, you know, you can give them a rebate, give them a discount, something of that nature to help them out. Going through the process, though, sometimes you do get yourself into a situation where there is no way out or there is no way to really appease or correct the situation with your customer. In those situations, sometimes you just have to maybe cut a check for like the last two invoices and say, here, you may not be able to pay it all back. But it's like here, you know, sorry, we couldn't help you. And essentially walk away or kind of eliminate your part in this process because you're not going to be able to make them happy or you're in a situation where it's getting so contentious that it's not healthy for either one of you to either party to be in kind of working together for the project. It becomes counterproductive. So in those situations, you know, giving back the money might be an easy way to walk away from the project. I don't want to say easy because, you know, anytime you're dealing with money, it's never an easy thing. But sometimes that's what it takes to make the customer happy enough to say, OK, I'm done or, OK, yes, we'll take that back. You know, give them a rebate or a refund essentially for some time. Like Rob said, you know, you eliminate the invoices and you can start fresh. It's like, OK, let's start over or let's reset. And now it's one thing we didn't really talk about is during this process, if you have made a mistake, if you can reset with your customer through refunds, through discounts, whatever, change your communication strategy, be more upfront or more communicative with your customer to make sure you're on the same page so you can avoid this problem. I forget what, you know, the bigger corporations, you know, do when, you know, they have like a priority one or, you know, the system goes down, that impacts customers, do something like that, essentially, and analyze what caused the problem. How did things go wrong? And then come up with a corrective or an action plan to prevent that and also to communicate better to the customer if it happens again. You want to kind of be a little more proactive in case there is something wrong or something that you're not accounting for. And with software, that can happen all the time. So it's just kind of covering your CYA, you know, do things a little differently. So I kind of like how you flipped around. So I'm going to flip this around a little bit, too. So from a more of a customer perspective, like helping the businesses with the customer. So there have been times where people come to you and we've alluded to this in the past, you know, someone will come to you and say, Hey, I want to build a TikTok application for $500. You know, no, you can't do that. But setting the expectations with the customer, sometimes you have to come in low, especially if you're starting out. You may need to bid a little lower on some projects to get your business started in those situations. The money can kind of be used as a tool. So you could actually say, hey, my typical rate is, say, $200 an hour. But coming in for the first six months of this project, I'll give you, you know, I'll work for you for $100 an hour. So you give them that discount to kind of ease into the project and work in. And then when you hit that middle part, then you raise your rate. This is not just with new customers. Over time, you're going to run into situations where you're going to have to increase your cost of your rates or the cost of your product, either due to tariffs, due to inflation, due to just cost of living expenses. Prices do go up. However, you can use that as a bargaining tool when working with your customers, be it an hourly rate, like Rob mentioned, or doing those flat rates or fixed bids or projects. Just be very careful and you have to be very clear on what is covered. In the world of AI, we mentioned this last time, take your proposal, drop it in AI and say, read this from this customer's perspective and tell me what I'm missing or basically just read back to me what I put in. You know, tell me how the customer would read this. The other thing you could do is you could also say, hey, what are some of the things I miss or what are some of the pitfalls that could come out of, you know, what did I leave out that could bite me later? And that could help you kind of determine, OK, what could be an addendum or things you could put into the contract that could say, OK, if we run into this, then we need to do this or increase our rate to this or change things around. So these are just clear ways to communicate with your customer to kind of ensure that your customer stays happy. You take ownership when you make mistakes or if there is a conflict between what the project was initially supposed to be and what it actually ends up turning into. What are your thoughts, Rob? A couple of things there that I didn't mention, so I think I want to go a little bit into the how to make this work, because you did talk about things like I'll cut a rate or something like that. There are a couple of things I've done that have been very effective. Now, one, I guess, forget to for I do want to say that there are opportunities where you can reclaim if you as Michael start out, like if you make a mistake, own up to it, correct it, do the right thing. And sometimes that can actually turn into a very long relationship with a customer. I had one customer that it it went very bad and it wasn't wasn't my fault. It was a it was a combination of me and actually somebody else that I was working with that I was a subcontractor for. So, I mean, there was there's some level of my fault in that and some of the things that were done. But once I realized that he was he was promising bigger things than he should, then while I ended up losing that relationship, I ended up having a good relationship with that customer that lasted for actually, I think, 10 years after that, because I said, hey, I'll help you out. I'll do what I can to get you guys back on track. Another thing that's worked very well and is actually very common is do things like a bill now and a bill later kind of approach. So maybe it's maybe do something where you say, well, hey, I'm going to work. Maybe I'm working 40 hours a week for a customer. But for now, I'm going to bill 10 hours a week and expect that paid every two weeks or whatever it is or every month or however it is. And then maybe every other month I'm going to try to get I'm going to expect them to catch up some of those hours. Or I may even say, hey, I'm going to allow you to you need to pay these hours on a regular basis. Maybe half the hours you pay on a regular basis and the rest, I'm going to allow you to just sort of pay when you can you can get to them as long as we're still going and we have a good relationship. And then if we're done working, then we're going to expect that we're going to get some of that pay out of it. Sometimes you have to be very cautious because you don't want to get into a big hole of somebody owing you four billion dollars and try and figure out how that's going to come back. But there are definitely ways you can do it. And some of it may be because you for me, when I do that, it's because I believe in the product, I believe in the project, and I'm expecting that they will be successful over time or I see where they can or are successful enough that as long as I'm patient, then that money will flow. And if it works in a lot of times it has to do with it, it works with the normal cash flow of the company that I've got, then it's going to be it's easier to take that on. Obviously, if you're already cash flow, you know, crimped and suddenly somebody's like, I don't really want to pay as much. Go back to the covid years to see where that kind of stuff happened a lot. It becomes very, very uncomfortable. But I think the the percentage game and the pay now, pay later or those kinds of things can be very helpful, particularly when they are upfront, when you're very clear about it and say, I am doing this to help you out. Or, you know, I don't want to especially when it's things like you really can't afford this thing right now, but we really need to do this for you because it's not worth it to do it halfway. Because, yes, I could charge you for halfway and we could figure out how to make that work, but it really wouldn't be good. And I wouldn't feel good as a vendor, as a customer, as a partner or whatever. However, that relationship is working with you, giving you something that is not what you really need. So it's it'll feel a little bit like you're overselling them. But a lot of times it comes down to you're saying, no, this is you guys just you're under selling, you're under valuing what this is going to be to you. And we need to find a way to make it work for you anyways. Sometimes it may just be trust where you're like, you know what? I'm going to trust that you're going to get such value out of this that you don't really want to pay now. But when you do, when you see this done product, then it'll work. So there's a lot of ways that you may look into it. But it all goes back to being comfortable with what and understanding what is the level of risk that you're willing to take on. And just as somebody that's done that, it's a lot easier to take it on when it's yourself and it's a side hustle than it is when it's your it's your business and you have other employees that are a part of that. They're going to be impacted by it. So that is probably going to vary depending on where you are in your career and your entrepreneurial journey as well. I think we'll move right into like from the challenge point of view. How are your contracts looking? How are your agreements looking? Do you have them? If you don't, now would be a good time. Actually, yesterday was the best time to get those in place, but now would be second best, I guess. Actually, the best time to get them in place is way before is before you start. Be like, make sure that that stuff is clear before you start a project so that there aren't these gotchas that are going to be there. These gotchas, surprises and unexpected things either on your side or theirs as you go into the project. So for yourself, the challenge review if you have them, hopefully you do. And if not, go out, you go to the Internet, you can find some nice boilerplate kind of stuff that will work for your business type, whether it's products or services or whatever it is that you provide. So that you have an agreement that works with your customers so they understand what is the expectation. What is it that they are going to get for the money that they are giving you? And then if it is something that is loosely defined, like you sell services and things like that, then make sure that you do talk about what the service is and provide. Go ahead and provide for if there is discussion or if they're unhappy with it or things like that, what are the remediation approaches? What are the kinds of things that you offer? What are the kinds of things that you're going to expect from them that maybe they have to fulfill in order for you to do your job? Because I have been in situations where we've gone in and told a customer, well, this is a project and you're going to do we're going to do A, B, C and D and you're going to do F, G, H and I. And they don't do those things. And now they're expecting you to do it. They change it. They want to stick to the original contract. And that's where you're like, nope, sorry, that's a change request. We're going to have to redo this or we're going to have to add on and make sure that you refer to the idea. If you do fix bids or anything like that, anything really make sure that you have something that is a way to change scope and to do change requests. So give that a shot. You will thank yourself in the future when you have something that is a much better agreement than you have today. If all of that works, whether it's now or in the future, show us an email at info development or dot com and let us know how it goes. What are your like? What are your concerns? Maybe some of your worst stories where you have things that worked out well, or maybe they didn't work out so well. Love to hear from you. You can also leave us feedback on out on YouTube and the developer channel and you can anywhere you get podcasts, the building better developers podcast, leave us a review, leave us feedback, all that kind of good stuff. They're developer.com. There are contact forms. There is every one of our articles. I think I'm pretty sure they're all turned on so you can leave comments and feedback there. Anywhere you see us, you can probably find a way to leave feedback. Unless it's on a TV somewhere and you start writing on the TV, that's probably not going to work. But most of you people, I think, have realized that that's that's not how it works anymore. Unless it's a touch screen, but we'll see how that goes, too. I may be running a little bit off of the rails right now, so I think it's a good time for me to wrap this one up. Go out there and have yourself a great day, a great week, and we will talk to you next time. Thank you for listening to building better developers, the developer podcast. You can subscribe on Apple Podcasts, Stitcher, Amazon, anywhere that you can find podcasts. We are there. And remember, just a little bit of effort every day ends up adding into great momentum and great success.