As the American economy is taking its sweet time to recover, I’ve noticed more hand-written, impromptu signs being placed in the reception areas and near the cash registers of the shops and businesses I frequent. “MINIMUM $50 on orders paid by credit card.” “All sales are FINAL once you leave the shop.” “50% deposit on ALL orders. NO EXCEPTIONS.”

 

I can appreciate that a business needs to have policies, terms and conditions to protect itself from less than principled customers who are out to milk every last cent and incentive they can. But does a company need to word its policies in such a way as to have me question if I should do business with it in the first place? Besides, what percentage of your company’s clientele makes it their sole mission in life to rip you—an honorable and legitimate sign business—off? I venture to say it’s less than one percent.

 

There must be a reasonable balance between the policies an enterprise must have to protect its liability exposure, and positioning itself as a company that is likeable, trustworthy and with whom it is convenient and enjoyable to do business. What are your policies—formally stated or unwritten—on deposits, quotations, order cancelation, returns or any other issue that may stand in the way of a prospective customer doing business with you? How do you educate your clientele about your policies and procedures? Do your rules send a message to your customers that you appreciate their patronage? Is protecting your interests while portraying an image of being customer-friendly even possible? I think so. Let’s explore it, shall we?

 

Vital few, trivial many

Now, don’t fault a customer for taking advantage of every discount and deal you offer, if the wording of your policies and limitations of your promotions are vague, misleading or deficient. Having too many marketing promotions—such as “buy one, get one free” or “we’ll match our competitor’s prices”—and an under-developed policy on your company’s terms, conditions and standards is just asking for trouble. It may work for the Goliaths of the graphics industry, but that doesn’t mean it will work for every David-sized business.

 

For example, my wife’s favorite department store is Kohl’s, whose Pricing and Discounts Statement reads: “We pride ourselves on offering name-brand merchandise at values our customers just can’t pass up.” With her MVC—Most Valued Customer—shopper status (which doesn’t take much to earn), she often is able to buy items that are already on sale at further-discounted prices. Matter of fact, I don’t think there’s an article of clothing, a fashion accessory or household appliance that sells for the manufacturer’s suggested retail price in the entire store, and my wife is still able to take up to 30 percent off the entire bill at the register with the coupons Kohl’s sends her. With its liberal pricing and discount policy, I marvel at how Kohl’s was able to sell, in 2009, nearly $17.2 billion in merchandise, maintain a gross profit margin of 37.8 percent and plans to remodel 85 stores and open 30 new ones this year.

 

If one digs beneath the surface to Kohl’s customer-service policies, one may begin to understand how it has been so successful for nearly 50 years. The company does not have a litany of rules regarding pricing, promotions and discounts. In fact, every time it chooses to deny something a consumer may ask for, it states its policy politely and in such a way as to put a positive spin on such denial.

 

Case in point, Kohl’s does not issue “rain checks.” The store’s policy, simply stated, is: “Unfortunately, if an item is out of stock while it’s on sale, the sale price will not be available if the item is restocked after that sale is over. But continue to check Kohl’s for the item because it could be on sale again soon!”

 

You see, Kohl’s focus has been its high-volume buying power with name-brand manufacturers, aggressive advertising to become a commonly recognizable name in the market, rapid-turnover inventory management, and an in-store shopping experience that ultimately positions it as “the store just for her.” Kohl’s customer service policies—although few in number—all relate back to its corporate mission. Add to this the fact that it employs 133,000 associates, was named one of BusinessWeek magazine’s Top-50 Best Places to Start a Career, and provided millions of dollars to community programs across the country and you get an inkling of the spirit in which a small business may begin to develop its customer-relationship policies: Specifically, be good at the vital few things for which your clientele knows and appreciates you, and set aside the trivial many that don’t support the company’s vision.

 

Some more important

Whether a business owner is developing the company policies for the first time or just tweaking its current ones, one should consider all of the possible situations where a policy should be set. Consider the following scenarios:

 

• Order cancellation—Presumably, this is why it is common practice in our industry to collect 50 percent on all incoming orders. If the sign shop has already commenced work on the job, it should be entitled to full reimbursement for any costs incurred prior to the notification of the order being canceled. Most of the time, the deposit covers these costs.

 

• Customer-furnished materials and artwork—If the sign media is supplied by the customer, but is unfamiliar to you or your production staff or is incompatible with your shop processes, you should be able to charge for any preparatory or experimental work necessary. If any “camera ready” artwork requires touch-up or clean-up, the customer should be aware that there will be a charge for that. Likewise, any customer property that is released to the sign maker will be safeguarded against the usual threats—fire, water damage, theft and so on, while in the possession of the shop; but if the work done on customer-supplied materials results in a reject or defective piece, only the cost of the embellishment will be refunded to the customer and/or the rejected item will be offered to the customer without charge. In general, it is wise to have a policy to dissuade customers from supplying you with garments. 

 

• Proofs: artwork, color and machine—Every sign and graphics professional should have a system for having the customer “sign off” on a proof—checking for correct spelling, dates, details, color matches and the like—prior to starting actual production of the job. If the customer does not care to approve the proof, have her sign and date a waiver of indemnity before the work is performed. Certainly, a sign maker regrets any undetected errors that may occur through production, but should not be held responsible for errors if the work is performed per the customer’s approval or if proof corrections were made verbally without signature or initials. If the customer requires machine proofs, rather than paper or electronic replications, the sign maker should expect to be paid for the production of such a sample.

 

• Delivery and packaging—Unless otherwise specified in writing, the price quoted is for a single shipment, “bulk” packaged, without storage, freight-on-board the customer’s address. Any modifications to this standard—partial shipments, individual packaging, special “rush” priority pick-up or delivery, to name a few—may result in additional costs to the customer.

 

Policies and prerogatives

A business owner can have any number of policies she desires. How, when and how often they are communicated and enforced falls under the business owner’s prerogative. Let’s look at an issue previously unaddressed in this column: quotations. First of all, all quoted estimates should have expiration dates—typically, 30 days. If you’ve had the unfortunate experience of being asked for a quotation from the same prospective client on more than three occasions and have yet to be rewarded with an order, you’ll appreciate the advice I will now share—adopt a Charge-for-Quotations policy.

 

How long does it routinely take you to prepare an estimate or quote? Even if it’s as little as an hour, what is your time worth? For the sake of argument, let’s say your time is valued at $250 per hour. That hourly rate now becomes what it will cost a prospective customer to receive a quotation for your goods and services. However, it is also your policy that if you are awarded the business, any charge for the quote will go toward the purchase price of the order.

 

If a first-time prospective customer approaches you with a request for a written quotation and you want to position your business in the most positive light, explain your policy to him, but then say, “But you look like a nice enough fellow, so for you I will waive the charge for quotation, if that’s okay?” See, you have the prerogative to enforce or waive any of your policies if, in doing so, good customer relations are generated.

 

The same can be done with your cancelation policy or extra charges for rush delivery, but in every case where you invoke your prerogative to waive a fee, get the credit you deserve. Make it a point to bring to the attention of the customer that you are doing them a favor and saving them time and/or money. They hopefully will look favorably upon doing business with you again and more often. Good luck!