If a client cancels a contract with you, how do you handle it? Cancellations happen, even with the best of salespeople. Clients have all kinds of reasons to cancel an agreement, and you need to be prepared for that eventuality.
Hopefully you’re using the Notice of Cancellation (Right of Rescission) required with ever consumer contract you write. This is a federally required document and the consequences of not using it can be devastating if the client chooses to take legal action.
If you get a notice that the client wants to cancel, either by phone, email, fax or snail mail, there are things you should do that will give you an opportunity to resurrect the sale or, at worst, end the relationship without hard feelings.
When you speak with the client, remember they will likely be very nervous. They are in effect breaking their word to you, and most people have a hard time admitting they made a mistake. So be prepared accordingly. Don’t let yourself get drawn into any argument, but insist that you meet in person right away, to pick up the paperwork.
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Now when you see them, again, they will not be the same people you signed the contract with. Be nice, be polite, agree that they can cancel and do whatever they have in mind to do. Then and only then ask why they feel they need to cancel. If you have approached this carefully and treated them with kindness, they’ll open up and tell you what is wrong. Again, don’t get drawn into any kind of argument. Just listen and look for mistakes you might have made during your sales presentation. If you can find a way to correct those mistakes, normally by asking questions, you have a good chance of bringing the sale back to life and moving on with the project.
If you can’t resurrect the sale, then let it go, thank them for their time and consideration and leave. Move on with your business and your life and clear your head from all the nasty stuff that might be creeping into the recesses of your mind. Cancellations are devastating to any good salesperson and part of this business is learning how to get over them quickly. The quicker you do, the sooner you make the next sale.
The Bottom Line:
A cancellation isn’t always final — handled right, some can be revived. Michael Stone’s counterintuitive first move is to agree the client can cancel, then insist on meeting in person. Handled with kindness, they’ll tell you what went wrong, and you may be able to fix a sales mistake and revive the job. The article walks through the conversation, and how to read a client who’s about to back out.
Related Articles:
Right of Rescission
Cancelled Design Agreements
Money Changing Hands
After the Sale, Pre-Job Layout
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses. He is the author of Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations. More here.
