How to Avoid Relationships Going Sour

by Kim Radok

In every business relationship, there can be occasions where the trading relationship, which was once working well, enters a period of distress. If this situation continues, the relationship may end up on a sour note. When relationships sour, both suppliers and customers lose.

I believe history shows, is illustrated in the following Pathway to How a Trading Relationship goes Sour.

1 – A misinterpretation of a particular situation; which causes

2 – hidden prejudices to come to the fore which affect our thinking; followed by

3 – unthinking and spontaneous reaction because of the re-awaking of our prejudices; and

4 – the other party’s similar reaction in response.

How then should we have acted to avoid a trading relationship going sour?

There are two aspects to resolving a potential problem and avoiding your trading relationship going bad.

First is to recognise, most problems start with a misunderstanding caused by a lack of action by one party and then a failure to communicate as quickly as possible to resolve the issue.

Secondly you need to be willing to communicate with the other party in good faith, to compromise where necessary and, to apologise for a problem your business has caused.

Here are two examples of how a business relationship begins to go sour.

The late payment – Your customer is waiting for a large payment so they can pay you. The payment takes longer than expected. Instead of communicating this fact as early as possible, the customer waits in “ the hope the payment will arrive any day now.”

Meanwhile the supplier starts making enquiries about the missing payment. The customer fails to communicate there is a temporary problem.

The supplier then makes contact and because of embarrassment, the customer tells a fib about the payment being sent. Alternatively, the customer is so angry about the missing payment, they take their anger out on the supplier.

From this point distrust begins and the relationship starts to go sour.

The lack of service in answering a customer’s enquiry – The customer has an enquiry about a business transaction. The enquiry remains unanswered for some time.

The customer then decides they will not pay the account until the enquiry is answered.

Due to the lack of payment, the supplier believes the customer is trying to avoid paying their invoice(s).

An argument begins on who is right, and the trading relationship begins to go sour.

Resolving the problem and saving the relationship.

If you study the Pathway above and the examples, we begin to see that most business relationships start to go sour when there is:

(i) no follow up to enquiries and misunderstandings,

(ii) a lack of communication,

(iii) being able to apologise, and

(iii) a willingness to approach the situation with an open mind.

Misunderstanding and confused communications will always occur in business. Therefore it is essential that when these situations occur, you act quickly to avoid the situation getting worse and finding the business relationship going sour.

Kim Radok is the founder and managing director of Credit Matters Pty Ltd. Kim is passionate about helping business people protect their business from other people who would steal the owner’s assets through slow-payment and fraud. Kim is a Certified Credit Executive, Certified Fraud Investigator and a Certified Adult Trainer and Educator. He brings nearly forty years of hands on experience, training, academic studies, writing and entrepreneurial business interests to every business conversation. www.creditmatters.com.au