How to Effectively Manage a Dispute on the Product

In the world of commerce and production you would never want to receive a dispute as they are always difficult situations to manage.

On the one hand there is the relationship with the customer, which we normally try to cultivate in a constructive way over the long term and on the other hand there is the company that may have made a mistake.

Based on how the manufacturing or distributing company is structured, the dispute raised by the customer is acknowledged so as to set in motion a series of checks relating to the revealed dissatisfaction .

This is not the place to describe the process of internal controls, also because each company follows its own channels based on how it is structured, but I would like to dwell on the management of customer response activities.

Without prejudice to the fact that the person in charge of handling the dispute can be a customer service employee, after sales or a more technical figure, if the dispute concerns aspects purely technical or to a commercial who sold the product.

The delegation to manage the dispute also depends on the size of the company and its possible repetition and frequency, the size of the market and the type of products.

Among all, we will make an example hypothesis in which we will represent an average company, which produces polymers, on a supply managed by a sales agent in an area national.

In this case, the first to collect the dispute could be the area agent who will be responsible for talking to the customer to understand the terms of the problem.

In the field of recycled polymers it is necessary to sample the granule sold, the machine parameters used and possibly a piece of the product made.

The agent will interface with the sales manager who, having collected the agent's information, will activate the internal controls to verify, analytically, what is stated by the customer.

In these cases some important variables come into play:

• Type of dispute

• Economic dimension of the dispute

• Customer importance

Type of dispute

There are production companies that, using certain inputs, can face possible disputes on the raw material through a series they already know.

This does not mean that the polymer produced is in any case non-compliant, but that, for example, if used with certain machine temperatures, certain systems, under certain conditions environmental, some customers may have problems.

There is also the case that the company actually made mistakes or carelessness, which led to the shipment of a batch of non-compliant material.

Here we will not focus on the types of problems that a polymer can have, nor on the reason why it has passed from production to the control area and then to that logistics, without anyone intervening to report a problem.

This is part of an organizational problem that will not be explored at this time, as we are interested in analyzing the management of a dispute that actually already exists. .

The sales manager, who in this case will be responsible for handling the dispute, after verifying the results of the checks that came from production and quality control, will have to cross-reference the information received from the client through the agent.

Based on the analysis of what he has, the assistant has a fairly accurate picture of the technical problem and will have to understand its economic entity.

Economic dimension of the dispute

Before making any decision on how to manage the problem with the customer, you must, as mentioned, establish the economic impact of the steps you will have to take with the customer.

If the delivered order is part of an ongoing contract, if it is a spot order, if a tightening of customer relations could lead to negative consequences on sales in the area and, finally, evaluate the relationship that the agent has with the customer and the importance this has with the company.

Faced with the risk of significant commercial or financial losses, a pragmatic approach will have to be studied, which puts the parties in the best conditions to dialogue. In the event that you are present at lower risks, the evaluations of the strategy to be followed can be less complicated.

Customer importance

If the customer is important to the company that produces the product, both the sales manager and the customer himself know this and, if he is not a fool, this situation is one of the major difficulties in negotiations in case the company has an important dispute.

The problem therefore does not concern only the objective situation of the moment, but there are to consider the implications on the possible turnover, or production commitment, which could change if the customer was lost.

Conversely, the lower the importance of the customer for the company, the lower the possible risks related to the dispute.

Here too we take an example and frame the problem, attributing to the dispute an average economic and productive value, an average responsibility of the company and a high customer importance .

These combinations can be designed differently, moving the components and finding different solutions.

Dispute management

Without prejudice to the three points referring to the value of the dispute, the responsibility and importance of the customer, we must move to minimize costs and maintain customer continuity- agency.

First you need to evaluate the degree of tension expressed by the customer who feels damaged, this can be detected through the sensations that may come from a phone call received or from an email sent or from the agent's instructions.

If the tension is palpable it is advisable to refrain from formulating written answers, which may be misinterpreted or which can further raise the tension.

It is desirable to find a direct telephone line, better in videoconference with the customer where you can have the opportunity to look at each other and talk.

If a visit from the customer were possible, this could be the best solution, as it is more empathetic and emphasizes the company's willingness to consider the customer as important.

It is these small nuances of great importance that can help you face the problem more calmly.

The meeting must always remain, by the sales manager, on a path of education, respect and courtesy, even in tense situations, without thinking that it could become a personal duel.

This does not mean a position of subordination, even in the presence of overt responsibility, but a pragmatic attitude that avoids the risks of excessive emotionality.

The explanation of the causes of the dispute and of the possible resolution must be presented by the company manager in a competent manner, both technically and economically, without excluding a way of compromise.

Interventions in which you try to reverse all or part of the blame on the customer in order to start the negotiation from a safer level are not recommended, because to do this you he must know the client's negotiation management skills and his intelligence.

If you do not know the interlocutor thoroughly, it is better to have a more sincere approach, less like a poker player, as you may be faced with a cheat better and, only you, you know the risk that is on the plate.

The line to be supported must have a reasonableness that can be valid for both parties, trying to pursue a balance as the backbone of the relations between the two companies.

Getting out of the small problem and letting the customer perceive the important bond that companies may have established over time, can defuse uncompromising positions, analyzing the value of the dispute in relation to consolidated turnover.

The main purpose of the meeting is to defuse resentment and increase empathy between the contenders, so as to start from a plane that is no longer uphill but at least horizontal .

The customer likes to feel appreciated and one of the solutions is to make him understand that the problem will be solved, as the business relationship cannot be questioned for a dispute.

At the end the solution proposal must take into account the real value of the error committed, the value attributed by the customer to the problem, also considering the amplification of the same as a game between the parties, the value of the company-customer relationship and the quality of personal relationships that can help or interfere in future problems.

Automatic translation. We apologize for any inaccuracies. Original article in Italian.