If your business model is based around providing a physical product, or you make or do something that has a visible and tangible result attached, then it is quite easy to give your customers what they expect, and prove that this has been done. They have something they can touch or see that proves that you have carried out your side of the deal, and if that isn’t up to standard this is obvious to all parties. If however your business is based around service provision, or you are an advisor of some kind, then it can be difficult to deliver to a customer in the same way as those with a physical end result. In this type of work there is a mutual understanding between you and your customer, that you will offer the best advice, or the best service possible, and that this should be paid for either on a contractual basis, or on completion of a term.
The main problem with this type of invisible offering is that it relies solely on people to provide the right information and advice. Unfortunately no matter how hard you try, there is not a human on this earth who is infallible. With the best will in the world, there will be occasions where you provide the wrong answers, either through error or lack of knowledge. In an industry where you trade in advice and information, a mistake like this can cost your customers, both in reputation and financially. This is why businesses like this must take out professional indemnity insurance. This means that in the event of a customer suing for damages, this money does not come out of your pocket.
As well as human error, there are also mistakes that can be made when handling a client’s property, or personal information. If you lose, or compromise the integrity of, any information that belongs to a customer, then you may be liable for any damages caused by this, as well as compensation. You must have security procedures in place, and secure computer systems for the storage and handling of such information. If this fails, you would once again fall back on your insurance policy. Similarly, if an item of a client’s intellectual property is used, either erroneously or intentionally, and passed off as your own by you or anyone in your company where express permission is not given, you could be facing a large claim under intellectual property, as well as copyright law.
It is a fact of life that sometime mistakes happen, and both humans and machines can fail. In the same way that sometimes shops sell faulty items, or a carpenter may make a mistake with the dimensions of a table, those in the service and advice industries may make decisions and assertions that are not correct, and even prove detrimental to the client. Unfortunately this is a risk that those in this field have to take. Take out the relevant cover, ensure your contracts and processes stand up to scrutiny, and never be afraid to triple check things before communicating to the client.