Al Switzler is coauthor of four bestselling books, Change Anything, Crucial Conversations, Crucial Confrontations, and Influencer.
Dear Crucial Skills,
My friend owns a catering company and has a large and valued client who doesn’t pay their bills for three to six months after an event. While the annual income from this client is excellent, my friend is unable to cover the expense of their events and often falls behind until he receives payment. He wants to have a crucial conversation with this client to let them know he cannot accept these payment terms, but he doesn’t want to damage the relationship or lose their business. Can you provide advice on this matter?
Friend in Need
Dear Friend,
Here are a few ideas from Crucial Confrontations. The subtitle of the book—Tools for Resolving Broken Promises, Violated Expectations, and Bad Behavior—is clearly applicable to this issue.
Before I turn to your friend’s problem, let me say a word about confrontation. Many people would rather eat a nail sandwich than confront someone. They would rather bite their lip and suffer in silence than engage in a confrontation. And from your friend’s example, we learn that some people would rather fall behind financially—and potentially risk the success and stability of their business—than hold a valued customer accountable. Many probably think of a confrontation as a verbally or physically dangerous situation, but we do not use that definition. Our use of the word comes from its root—which can be summarized simply as a face-to-face conversation. Rather than accosting or remaining silent, a person confronts another person about his or her behavior directly and courteously.
Clarify expectations. With that sidebar out of the way, I begin with this point—excellent performance begins with clear expectations. It is simply a sound business practice and an effective relationship strategy to clarify what’s expected, but it doesn’t look like your friend has taken this important step. He should visit with his client and clarify payment terms. There are several possible outcomes of this conversation:
- Quick agreement. The most likely outcome is a quick agreement that the client will make payments in full by a certain date and that late payments will be assessed a fee. Starting such a dialogue should be as easy as saying, “Jim, I’ve come to visit you today because I noticed that we didn’t clarify payment terms in our contract.”
- Different opinions. If your friend and the client can’t agree quickly, then they should jointly explore the consequences. What does this payment schedule mean for the client; what does it mean for the vendor? I suggest that in this sort of dialogue, both parties should be candid about what it means for themselves and for the other person. Often the offending party may simply be unaware of the consequences of their actions. Letting them know candidly and factually may be enough to solve the problem.
- A diminished relationship. The forethought of a negative outcome causes many people to choose silence, and what they don’t talk out, they eventually act out in ways that could ruin the relationship like gossip, sarcasm, or avoidance. However, our experience and research supports the idea that this outcome is less likely if your friend chooses to speak up, goes into the conversation with good intentions, and brings up the issue in a way that encourages dialogue instead of debate.
Make sure your motives precede your message. Your friend needs to make sure he has his heart and head right before he opens his mouth. He should ask himself, “What do I want? What concerns might my client have? How am I viewing my client?”
Let me emphasize this point by sharing a story from Kerry Patterson. Several years ago, Kerry was working with an actor who was supposed to deliver the line: “You agreed to have the write-up to me by noon. It’s two o’clock. I’ve received nothing as of yet and I was wondering what happened.” When the actor delivered this line, he frowned and emphasized the words “AND I’VE RECEIVED NOTHING AS OF YET.” Because of this, it sounded like an accusation instead of an attempt to discover why the coworker had not met the deadline. After several failed attempts to remove the accusation from his delivery, Kerry told the actor the other person was a good friend who was normally quite reliable and that he was curious as to why he had failed to deliver on his promise. When given this background he delivered the lines perfectly.
Let’s say the actor is your friend and needs to deliver a line as simple as, “Jim, I’ve noticed we don’t have an agreement about a payment schedule in our contract. Could we talk?” On the first attempt, your friend might deliver the line with a certain iciness—the nonverbal actions and the tone of voice drip with the idea that the client is guilty of something hideous. So you encourage him to, “Try that line in a more curious way, like you are trying to find out what’s going on.” Your friend is better this time—the overt nonverbal actions are gone, but the subtle ones still hint of “gotcha!” You patiently take a new tack and suggest to your friend, “Think of this person as your best friend.” And your friend gives the line perfectly—a mix of courtesy and curiosity. There is no hint of prejudgment or disappointment or anger.
Your friend needs to make sure his motives are right before he meets with his client. If he does, he will engage in a healthy, face-to-face confrontation. And when he can talk about it in a safe way, he increases the possibility of a win-win outcome. If he doesn’t talk about it in an effective way, there is little possibility of the payment schedule getting better, but by his silence, he will almost guarantee that the relationship will get worse.
Best wishes in coaching your friend,
Al
Al – Your advice in this column is great…unless the customer is part of a large corporation, and the local contact has no control over payment timing. His reply could well be, “I understand your predicament as a vendor, but payment is corporate policy, and there isn’t anything I can do about it.” As a small business owner myself, I have firsthand experience with just such a customer attitude. It comes down to taking late payment or not doing business there any more. “My way or the highway.” No diplomatic crucial confrontation or conversation will get around that.
Some years ago, I was employed by a small company who prided themselves on being fast pay. A large Chicago corporation bought them and overnight the unwritten but official policy became that no one gets paid in less than 45 days, period. It is important to note that our vendors did not jump though hoops for us any more like they did when we were fast pay.
In my own consulting business, when I learn a client is slow pay, I just crank the interest into their initial quote. This seems fair to both parties, since the late pay interest is a contractual obligation that no one ever pays after the fact.
Regards,
Christopher B. (“Kit”) Sprague
President
MMS, Inc.
love love love love it
This story about the actor getting the right emphasis in a follow-up conversation with a colleague always reminds me of SNL’s “I am your mother!” skit–funny example of the stories we carry and how they affect our tone and body language.