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Managing disputes with clients and customers

Regardless of where you work, there always seems to be problematic customers. So how do you manage these occasional disputes with your customers? The key is to resolve such disputes before they escalate and get out of hand. Here's taking a look at some key steps in managing disputes with clients and customers.

The first step is to try to avoid disputes all together. Some disputes are just bound to happen, but avoiding them all together can save you a lot of time, headaches and money. Some guidelines to avoid disputes are:

  • Deal with customer complaints fairly
  • timely and professionally
  • Make sure all employees treat customers with respect and show good customer service when interacting with them.
  • Develop and train employees on how to negotiate with customers.
  • Comply with all representations and other promises made to your client or customer.
  • Have easy and fair ways with addressing customer concerns, such as: return policies and in-store credit if necessary.
  • Always treat customers with respect and kindness.
Managing complaints and concerns quickly will lessen the chances of a full out dispute. Small percentages of complaints actually become disputes. Any disputes that aren't dealt with and resolved can seriously affect the profitability and success of the company.

What are some common disputes seen in small businesses?


  • quality

  • service

  • price

  • packaging

  • delivery and customer service


  • the ability and willingness to pay accounts


  • the term

  • relocation

  • price increases

  • quality of location

Breach of contracts:

  • termination period

  • quality of product

Misleading conduct:

  • failing to meet expectations

Most problems should be resolved first and foremost through discussion between both parties. Good business management requires good ways of dealing with customers, even when resulting in disputes. Make sure you have a good understanding of the dispute and then decide what the most suitable way is to resolve it.

Here are some things to consider when managing a dispute with clients or customers:

  • Why did the dispute happen?

  • List all the events leading up to the dispute.

  • What are the issues?

  • Document all the facts in order of priority.

  • Understand the strengths and weaknesses of your case.

  • Can it be settled easily?

  • Can you negotiate some kind of compromise with them, such as: trades, discounts, early payment, etc.?

Remember, if you compromise with them, they are more likely willing to compromise with you.

What would you like to achieve?
Think of the situation from the customers' point of view. Consider the outcome
for both parties and if it is fair.

Be prepared!
Being prepared is the best way to present your side of the case with calmness and clarity.

There are a number of outside sources to help you deal with disputes that may happen in your business:

Good negotiators usually are assertive and calm. If you feel you cannot handle the dispute on your own without getting upset or irritated then get a mediator to do the talking. Having an aggressive attitude can make the dispute unresolved and even worse.

The third party negotiates with both parties and identifies key issues that will result in resolving the dispute.

Both parties appoint a facilitator to manage the dispute, identify issues and achieve the desired outcome. The facilitator assists by preparing an agenda and shares information between the parties that help them reach an agreed outcome. This process is less formal than a mediator.

This is often used for long term contracts. A Partnering agreement is based on the parties' need to act in good faith fairly with one another.

Expert recommendation or determination
An independent expert provides a report on specific aspects of a dispute by examining the documentation and material. The expert may be asked to provide a recommendation or a determination on the situation.

Customers have a right to clarify when they believe they have not received their money's worth or been dealt with appropriately. They give businesses an opportunity to fix the problem and the situation. Most customers that complained about particular products and services continued to buy the products they complained about if they thought the complaint was resolved fairly.

If customers feel these situations are not dealt with accordingly then that's when disputes most likely will take place. Remember to always try to quickly and kindly resolve all concerns. If a dispute does occur, follow these important steps in managing disputes with clients and customers.

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