Trademark registrations are one of the easiest and cheapest ways to protect a business. Today we delve into the basics of this area of trademarks:
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1:13 Do I really need a trade mark registered?
4:22 When is a trade mark not fit for your business?
5:19 Trademarks vs company name, business name, domain name
7:17 Do you have a name that can be registered as a trade mark?
10:25 Is there someone using a similar name in the marketplace
11:09 Should you change your name if it’s very generic and can’t be registered as trade mark?
12:11 Is trade mark registration expensive?
14:21 Is trade mark registration something that we can do ourselves internally?
15:33 Choose the right class for your business
17:13 Can I make money out of registering my trade mark?
This is Joanna Oakey here from Talking Law and today we are talking about trade marks.
Today we are talking about the frequently asked questions that we receive in relation to trade marks so we can tackle some of the issues that we hear or the questions that we hear time and time again.
I’ve got a whole heap of questions here. Today I'll just run through them one by one. But if you feel like I’ve missed something that you really want to understand, just head over to our show notes at talkinglaw.com.au and shoot an email through to us to let us know what other things you’d like to hear about.
When is a trademark not fit for your business?
Do I really need a trade mark registered?
Let’s kick off with the first question. Do I really need a trade mark registered?
That’s quite a broad question and something that quite often we hear from businesses both who are starting out and who’ve been in business for a long period of time. Let’s tackle them one by one.
Firstly, our businesses that are just starting out. Do I really need a trade mark registered?
Well the answer for you is whether or not you think brand would be important for your business moving into the future - whether you want to be in the position to be able to stop people from using a brand that’s similar to yours in relation to the types of things that you’re providing under the brand – so, your goods or your services. The second component of the question is: Do you want to be protected against someone forcing you potentially to have to change brands? And that’s what trade mark registration is all about. It’s about giving you the opportunity to be stronger in stopping competitors from using a similar mark and from preventing the environment where you are likely to be required to change your mark if someone else was using a mark similar to yours first.
The reasons that we use a trade mark in this way, are that - number one - the process of applying for a trademark is a process in which you need to understand who else is in the market using the mark and who has registered trade mark rights for that mark.
So the first thing is, when you’re starting a new business, you should absolutely ensure that you at least understand if there’s any sort of risk around in relation to you using a mark and the process of trade mark registration helps to pass you through this process. Whether or not you decide to protect your mark or register your mark after assessing whether or not someone else has trade mark protection for that mark, is then a decision based on where you are in your business, and how important you think brand will be for yourself in the future.
Then stepping back and looking at the second case scenario, which is a business who has already been operating for a while asking whether or not they need a trade mark registration, the answer is somewhat different. The longer you have been using a mark, the less likelihood there is someone else that will come in and claim that they have been using the mark first and take it off you. But I have to warn you, this absolutely does happen, not very often but certainly I have seen it on a number of occasions. I’ve seen it with companies that have been around for decades suddenly finding out that someone else had a registered trade mark before they did and was now trying to stop them from using their own mark in the market that they’re playing in.
For an established business, you still have the consideration of whether or not you want a trade mark registration to protect your business, and if brand is important to you, if you think that there’s a likelihood that you might want to stop other businesses from using a similar mark, then once again a trade mark registration is for you.
When is a trademark not fit for your business?
But if you would say in answer to that question that firstly, you don’t care if someone forces you to change your name because rebranding wouldn’t impact you and number two, you don’t care if other traders in the market are using a similar name, then maybe a trade mark registration isn’t something that you need to put your time and expense into. But when I say time and expense, to be honest, trade mark registrations are extremely cheap depending on how broad you want that protection, but simple trademark protections are really cheap - you pay your fees on a 10 year basis, so you get your trade mark registered and your trade mark registration fees last you for ten years, and then you only pay a renewal fee once every ten years, which is a fairly small amount of money every ten years. So really, it’s what I call one of the cheapest business insurances around.
Trademarks vs company name, business name, domain name
The second question I’m often asked is: I have a business name or a company name or a domain name that has my mark in it, do I still need trade mark registration?
My answer to that is that business names and company names are completely different to the concept of trade marks.
It might be that you have been able to get a certain business name or a company name, remembering that business names and company names essentially are identifiers so that people know who it is under the company. They have something that they can search here in Australia to find out who is behind the business that they’re dealing with. So business names and company names are identifiers, but trade mark registration essentially is the thing that provides you ownership of a particular mark and having a business name and a company name registration is not in and of itself enough to necessarily defend yourself against other people who've claimed that they’ve come up with the similar name first, and it’s also often on its own not strong enough to stop competitors from using a similar mark.
Trade mark registrations sit on top of business name and company name registrations. They’re “additional to” not “instead of.” I’m often asked the same question in relation to domain names: I have a domain name, do I need a trade mark registration? The answer is the same as what I’ve been talking about before. If you use a mark in a domain name, the only reason that you potentially might decide that you want a trade mark registration for it is because you want to be able to stop other competitors from using something that’s deceptively similar or you want to protect yourself from the situation of someone else trying to remove the use of the mark from you.
Do you have a name that can be registered as a trade mark?
The third question that I want to talk about today is the question that’s put to us often: do I have a name that can be registered as a trade mark?
This is a really good question because lots of names that people come up with when they’re thinking of how to market their business are often generic or descriptive names, and that makes sense from one perspective so that when people hear your business name they understand what you’re about, say for example, Brilliant Marketing or Melbourne Meat Supply or other sort of names like that, that are descriptive of what you do. So it makes sense that words or names for your business or your product that are descriptive will be easy for customers to understand what you do. But the problem on the flip side is it’s very difficult to stop other people from using words or names in relation to their products or services that are descriptive. So what we suggest is that the best type of mark for business in relation to giving you the ability to stop other competitors from using something similar to it is to choose a mark that is more unique. The more unique a name is and the less descriptive or the less generic it is, the higher the likelihood that you will have a mark that’s capable of registration.
Should you change your name if it’s very generic and can’t be registered as trade mark?
We’re going to do a podcast episode that’s specifically focused just on how do we create names that are most likely to be registered and most likely for us to be able to stop other traders from using, so I won’t go into this too much further today. But just bear in mind that for a mark to be registered, it’s far better for it not to be generic and for it not to be highly descriptive and that’s also super important if you actually want to be able to try to stop competitors from using something similar in the future.
The other thing that I suggest to businesses when they’re coming up with names is that, if you’re choosing something that’s descriptive, it can often be hard for people in the public to remember exactly what your name is in comparison to other people’s names.
So, say for example we use Sydney Dental Supplies. If another trader had a name that was say for example Dental Supplies Northern Beaches or Dental Supplies in Sydney, you can see that traders might find it really difficult to remember which is you versus which is them. Not only can you not stop other traders from using names like that, that are highly descriptive, you also have an issue that it’s easy for your customers to make small changes that then will confuse the name in their minds. The more unique a name is the easier it is for customers to identify that it’s you and the easier it is for you to keep other traders and competitors out of the market using something similar.
Is there someone using similar name in the marketplace
The other element that I think that we need to talk about here that’s really important in relation to whether or not you have a name that can be registered is whether or not someone else is using a name similar to that out in the market place. One of the problems is you may not realise right in the beginning whether or not someone else is using that mark. One of the best thing that you can do to protect your business, if you aren’t sure if someone else might be using a similar mark, is to get your trade mark registration in as early as possible in the life cycle of the business so you’re the one who’s holding the trade mark registration and you get the protections that are provided by holding that trade mark registration.
Should you change your name if it’s very generic and can’t be registered as trademark?
Let’s move onto question number four: what if I have a name that is so generic that it can’t be registered as a trade mark, should I think about changing my name? This is something that we're often asked by businesses when they suddenly realise that the name that they chose all of those years ago is actually going to be very hard to stop other competitors using similar variations of. I guess at the end of the day this is really a decision for you as a business on the basis of how important brand is, and whether or not you’re looking at selling the business into the future.
I think the most important thing though is that you aren't thrust into this situation without realising it. Therein I think lies the secret to when you’re coming up with the new brands for your business, whether that’s a new business name or company name, or just a new brand name that you’re using for the product or service that you’re offering, try really hard to pick something that is protectable at the end of the day even if you don’t choose to initially protect it.
Is trademark registration expensive?
The fifth question that I’m often asked is: is trade mark registration expensive? - which I think is a great question - why not? We all want to understand what the costs are in relation to our business. But of course, answers to this always have to be relative, so I guess my question straight back at people is - is car insurance expensive? And I guess the answer to that depends on whether or not you have an accident. If you pay your car insurance each year for, let’s say, you know one or two grand a year and you have an accident one day and you’re able to claim a large amount on that insurance. Then, it’s unlikely that you would rank that car insurance as being expensive. But of course you won’t know until you’ve been in the situation where you’ve been able to utilise your car insurance to be able to assess whether or not it’s expensive. That’s the same answer really with trade mark registration. If you don’t get your trade mark registration and you end up in the situation where you’re being attacked for your use of the mark, or you’re in the situation where you’re not able to stop a competitor from using a similar mark, or it’s quite difficult for you to stop a competitor from using a similar mark, that might cost you a massive amount in lost time, in marketing expenses if you have to rebrand, and in legal fees if you are having to fend off an attack or make an attack on something that’s not based on a solid basis.
In that sense, whatever you paid for trademark registration probably wouldn’t be seen as expensive in the cold hard light of day in comparison to the sorts of cost that you may have to incur if you don’t get it. But just so you know, trade marks, generally speaking from a really simplistic perspective, for the simplest sort of trade mark that you can get in Australia, are usually less than a couple of thousands of dollars in total for the whole process and that gives you ten years worth of registration so I actually think it’s one of the cheapest types of insurance you can get for your business. But as I said, it’s all relative and a decision that’s up to you.
Got questions about trade marks – here’s a good place to start.
Is trademark registration something that we can do ourselves internally?
The sixth question in our list of frequently asked questions that we’re tackling today: is trade mark registration something that we can do ourselves internally because we may have a contract team in house, or we have a marketing team or a small business on a budget? The answer to that is yes. Technically speaking, trade mark registration is something that you can do yourself just like you can draft a contract yourself or you can even potentially deal with the sale of a property that you are dealing with yourself. But the question is, in doing it yourself, do you really understand what you’re doing? And there are number of things with trade mark registration that it’s really important to remember that go to the strength of the protection of your trade mark. Trade marks are one of those things where we won’t really know how strong our trade mark protection is until the point of time when we are trying to use it.
The sorts of things that can really impact the strength of the trade mark protection are whether or not you’ve chosen the right entity to register your trade mark in, whether or not you’ve chosen the right classes to registered your trademark in.
Choose the right class for your business
There’s forty-five different good classes of goods and services in relation to trade marks and it’s important that you’re choosing the right ones for your business, or your product or services - whatever the mark applies to. Other decisions that have to be made is how will your trade mark registration be worded in relation to the specifications that are used.
The specifications essentially are the words that you use for your trade mark protection that give it the breadth of protection. You're always walking a fine line in the words that you’re using in your specifications, between using words that will adequately protect your business, both for what you were doing now, and for what you may be doing in the future, but also not being too broad so that they raise the possibility of someone opposing your application because they have goods or services that are similar to some of the things that you’ve describe, or you having other marks cited against you in the application process.
There’s other considerations in the application process like, for example, whether or not you choose to register the word itself, or the logo, or a combination of the word and the logo. Those considerations or the answers to those questions come back to an assessment of what it is that you’re looking to get out of the mark in the future and what other marks are around at the point in time of your registration. There’s lots and lots of questions that feed into trade mark registrations that quite frankly can be very hard for you to understand if you don’t have specialist expertise in that area.
Can I make money out of registering my trademark?
Alright, so number seven: can I make money out of registering my trade mark? The answer is absolutely yes you can. You can make money out of registering your trade mark, if you then decide to do things to commercialise your mark. In fac,t I must say, that making money and saving money are also sometimes one and the same thing. Trade mark registrations can help provide a return to you on the investment that you spend in them by:
1. Protecting your marketing spend by giving you protection of that brand, like we talked about before;
2. Protecting you against legal fees that might be thrown away if someone attacks you on the basis that you don’t have that trade mark registration in to protect your business;
3. You can also get a return on investment out of your trade marks by commercialising the marks. So say, for example, you might in the future consider things like licensing the mark if there’s various applications for the use of the mark into the future if it’s built into a brand;
4. And finally, having a registered trad emark can often help with the sale process of a business because it shows that you have protected your intellectual property.
Five ways you can make money with your trade mark.
Someone is using my name on their website or in the url or as a metatag can I stop them and would trademark registration help?
And finally, the last question that we're going to tackle today: someone is using my business name on their website or in their URL or as a metatag, and can I stop them and would trade mark registration help? The answer here is yes, absolutely. Trade mark registration can be helpful in this process, if someone is misusing your mark as a mark in their goods or services. That means, if it’s a competitor that’s using your registered trade mark on their website or as a URL or as a metatag, then absolutely we can use this trade mark registration as a way to potentially stop that sort of activity.
That’s our round up today on trade marks, the frequently asked questions. Just as a reminder, the things that we spoke about today is:
- Do you really need a trade mark registered?
- You have a domain name a business name, a company name or all of the above, do you still need a trade mark registration?
- Whether or not you have a name that is capable of being registered?
- What to do when you have a generic name as your mark that you’re using at the moment and how do we go about choosing names that are less generic into the future?
- Whether trade marks are expensive or not;
- We talked about whether trade mark registrations are something that you can do yourself or through people who are generalist rather than specialist;
- How you can get a return on your investment out of registering your trade mark;
- And we talked about using your trade mark in the instances of stopping competitors from using your marks on their website in URL or as metatags.
So that’s it. That’s a round up from today. Thanks so much for tuning in!
Hopefully you found it really useful. If you’d like more information on this topic, just head over to our website at talkinglaw.com.au where you can download some information about this area. Through that website you’ll also be able to download a transcript of this podcast episode if you’d like all of these frequently asked questions in more detail.
You’ll also find details of how to contact our lawyers at Aspect Legal if you’d like help with any of the items that we covered today. And finally, if you enjoyed what you’ve heard today, please pop over to iTunes and leave us a review. We’d be most grateful. As I said at the beginning of the podcast, if you have any questions that you would like answered, whether or not that’s in relation to trade marks or any other general commercial areas, please pop over to our website or through our show notes and leave us a message about the questions that you’d like answered and we’ll see if we can tackle them in another future episode.
Wonderful! Thanks for your time. Bye!
One common legal issue businesses face are problems that crop up from time to time with clients. This can lead to clients paying slowly, or not at all, costly and time consuming disputes, and brand damage. In this episode we discuss how having the right approach from the start can help you to avoid most of these problems.
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1:40 Five customer engagement issues you need to look into
5:11 Setting up the right terms and conditions
6:00 What should you include in your terms and conditions
6:38 Clarity on responsibility of both parties
7:49 Clarify who owns the intellectual property
9:06 Payment terms – incentives and penalties
9:57 Liability clauses you need to include
13:50 Writing your terms and conditions in plain English
14:55 Fulfill your own terms – and be proactive
16:24 Consider the cost of inaction
17:31 Four action steps you need to take
Today we’re talking about the ways that you can set up your client relationships right from the start.
So, why is this important? One common legal issue that businesses face, are problems that crop up from time to time with clients or customers, depending on which language you use.
That might reflect itself in:
- Clients being slow payers;
- Clients not paying at all;
- Clients that raise issues with the goods or services you’ve provided;
- Clients that try to terminate contracts with you before they’ve come to an end; or, at the worst,
- Situations where clients try to make you liable for the loss they have suffered, that potentially could even be greater than the value of the goods or services that you’ve provided to them.
The most common of all of these that I see are payment related issues and disputes about the goods or services that have been provided. Although, I have to note that when disputes occur, they often directly link also to slow non-payment as well because when customers aren’t happy they generally stop paying, so all of these problems can be interlinked.
In most cases these sorts of issues essentially come down to a failure in the process of the original engagement with the customer and the systems you set up right from the start to support them and deal with any issues as they occur. For example, generally I see these issues arising from one of these particular situations:
- Terms and conditions or terms of sale that have been used in the beginning that haven’t had the right clauses included or, they’ve had the clauses but they’ve been set up in a way that means that they don’t have the effect that they were meant to have;
- There were no Terms and Conditions right from the beginning of the relationship with the client;
- The Terms and Conditions were not read and understood by the client;
- There was a lack of communication in any engagement process and throughout the relationship, which then allowed issues to bubble up to the surface; or, finally
- There was a lack of systems established to monitor the relationship and deal with any issues as they occurred.
Today we’re going to talk about each of these five areas. Essentially, having terms and conditions in place to begin with that include the right clauses, communicated in a way that your customers understand; ensuring that your communications throughout the process of delivering the goods and services are clear, and that your systems support the rights and obligations that arise through your terms and conditions document.
What does that mean? Essentially, that you have systems in place to make sure that you are providing what you have said to your client that you will provide. Now, if all of these things are ticked off, I think you’re fine and that you’re in a situation where it is extremely unlikely that you will have customer issues going forward.
An example of this having been done really well is a recent case that I worked on where we were able to get a $250,000 win for one of our clients, on the basis of really tight wording that we used in their contract initially and a good negotiation strategy in dealing with the contractor’s view.
That’s an example of where terms and conditions have really correctly and helpfully given you a basis that you can launch from if a dispute does occur in the future even though, if done well, you’re also highly reducing the likelihood of dispute. But, on the flip side, we’ve had many instances where businesses have signed up clients for lots of projects who have then pulled out half way through and refused to pay for the work done, or clients who have come in to see us who have lost tens of thousands, sometimes hundreds of thousands of dollars when their clients refused to pay, because an argument erupted during the period of the provision of the goods or services. All of those usually link back to some issue in one of those five areas that I mentioned a few minutes ago.
What processes should you have in place?
Today, we’re going to start discussing what processes you need to have in place to ward off issues from the start. I’ve also created an action guide for you as a checklist that you can use to guide you through all of these areas because we’re going to be talking about a lot today, obviously too much for you to take note of while you’re listening to a podcast.
So, to make it really easy, I’ve made a checklist available for you related to this episode at talkinglaw.com.au or you can access it via the website of my commercial legal practice at aspectlegal.com.au
Okay, so let’s launch into what you need to do to have the right terms and conditions in place.
The concept of having the right terms and conditions in place comes from, in essence, the concept that a contract is imperative.
- A contract sets the relationships between parties;
- It sets the expectations between the parties; and
- It’s not a document that describes simply what you will and won’t provide but also what you expect of your clients.
When done well, it helps to ward off arguments with clients because, essentially, arguments only occur when both parties think they’re right.
Thatmeans arguments can only occur when something hasn’t been clear, so our task is ensuring that we have documents that make all of these areas really clear that help to protect you from open liability and that helps you to set up the right expectations from the start.
Okay, so what should you be including in these documents? I’ll go through a bit of a checklist of the sorts of things that you should be considering including, but obviously I need to add a caveat that each business is different so you need to ensure that your terms and conditions are a reflection of your business not a reflection of someone else’s.
This is why copying and pasting someone else’s terms and conditions doesn’t really work because they’re not your business they’re a different business. So if you have copied and pasted a set of terms and conditions it’s important that you go back and that you review them thoroughly in light of the things that I’m about to talk about now.
Alright, so what should you be including in these documents?
Clarity on What You’re Responsible for
Firstly, clarity about what you will do and what you’re responsible for. This is, essentially, the crux of the documents. This is something that you should sit down and think about and understand first before you even get started in working out whether or not your current terms are appropriate for you where you are now. Other areas that you need to think about clarity are on payment terms, which sounds obvious but it’s so often not dealt with clearly enough in the agreement and it’s super important. You need to be clear on what the client’s obligations are and what you need from – if you’re going to require anything from them – to be able to deliver your goods or services. These issues are really important and often forgotten. If you need something from them, you need to be clear about this in your terms.
If they’re providing things to you then you need to ensure that you get protection in relation to any information they give you.
For example, sometimes this might look like licenses in relation to your use of those things. You need to be clear that intellectual property (I’m not going to go into this in too much detail, we’ll do it in some future episodes) but essentially intellectual property you need to think about a few different things.
Clarify who owns the intellectual property
Number one, if intellectual property ownership is important, you need to make it clear about who will own the intellectual property and, if intellectual property will pass over at some point, you need to be clear about when that will pass over. For example, very simply, many documents just simply say intellectual property will pass to the client but that isn’t making clear that you won’t pass to the client until the client has actually made payment. So that’s an important thing to include.
Also, bear in mind that sometimes, intellectual property clauses need specific caveats. So, that means if you are providing services or goods to your client that are based on some things that you then use with other clients as well, you just need to make sure you’re clear about what you’re actually handing over in any intellectual property clauses.
You don’t want clauses that essentially say all intellectual property will pass to the client, because that’s not really reflective of what’s happening and it might restrain you from being able to use that base intellectual property with other clients moving on into the future. Or, maybe you don’t even own all of the intellectual property yourself, say for example, if you’re licensing images from someone else and you’re providing graphic design or web development services you need to make sure that you’re clear that that intellectual property is not something that you can ever pass over in intellectual property form.
The next area that you might want to consider building into terms and conditions documents are clauses that deal with slow payment.
You might, for example, want to include some sort of incentive for your clients not to want to be a late payer. For example, Interest. Even if you won’t be applying the interest, or administration fees, or whatever else you’re calling fees that you might threaten to apply to slow payers, at least if you have clauses that allow you to charge these figures, it gives you something that you can threaten to apply if you have slow payers. It gives you some carrot to encourage them to pay in a timely manner.
Slow payment is a whole different topic which I will deal with in another episode in the future, but for now it’s enough to say that it’s important that when you’re reviewing your terms and conditions, you have the appropriate clauses to deal with slow payment.
You also need to make sure you have the ability to on-charge your customers for any enforcement cost and you need to make sure you have the right protection against liability and that in this you don’t over shoot the mark. Quite often I see liability clauses that really aren’t appropriate for the situation that they’ve been used in and that really overshoot the mark. The problem with that is that there’s various legislation around that might create an issue or the situation in which that clause then becomes invalid and you, therefore, don’t have any protection from that liability clause at all.
So, it’s really important when you have liability clauses – and when I say liability, I mean clauses that might be under the heading of indemnities or waivers or release clauses or there might be exclusion of warranty or exclusion of liability clauses, anything with that sort of heading – you need to make sure you understand what those clauses actually mean and make sure that they are appropriate for the situation of your relationship with your client.
I often find that people look at these clauses and have no idea what they mean and then decide, therefore, just to ignore them. But, that’s completely the wrong approach because if you do that and the clauses are incorrect for your business, then you don’t want to be finding that out later when it’s too late.
So, it’s really important that you understand what each of these clauses mean in your business and that they are appropriate for your business.
And then finally, you should also be thinking about how it is that you link this document – being your standard terms and conditions document – together with the documents where you provide the specifics of what you’re providing your customer.
Quite often businesses would use separate documents like, for example, proposals or estimates or schedules, or a statement of works where they set out the details of what it is that they‘re going to be providing to the customer, that isn’t something that’s included in the general terms and conditions.
It’s really important that each of these documents are referred to correctly in the terms and conditions and that you work out how they are going to interact together, and that you’ve also worked out a framework for what needs to be included in these documents that are your proposals or estimates, to make sure you’ve covered off the detail that you need to, to link it up correctly with your terms and conditions.
Alright, and the list goes on but these are the major issues that you should be considering.
But it’s not enough to just have your terms and conditions document in place, you also need to make sure they’re up to date with current legislation – and that current legislation, I must say, is changing all the time, so you really need to have your agreement updated at least once a year to ensure that you’re on top of that changing legislation and on top of your changing business phase. Quite often your business will be in a completely different stage now than it was one year before or one year in the future, and therefore, your terms and conditions need to accurately reflect where your business currently is now and the way you interact with your clients now; not how you did in the past or how you’re going to do it in the future.
There’s no point having terms if they aren’t understood by you and if they aren’t understood by your clients. I’m often surprised by how often people in the business don’t know or don’t understand what’s in their terms. It’s not just the owners and managers that need to understand agreements that regulate your relationship with your clients, but anyone who is part of the initial sale or who is client facing throughout the relationship.
So how do we do this? How do we create the situation where we have documents that are understood by you and understood by your clients? Because, let’s face it, I think the reality is, that many of us click away terms and conditions without ever reading them and I think that’s the reality that many of us have businesses or work in businesses where we deal with terms and conditions that we don’t even understand ourselves.
So where do we start with all of this?
Writing your terms and conditions in plain English
The first thing is we need to have our own client agreements that are written in plain English and that are easy to understand and that aren’t overly long or overly complicated, because the longer they are the less likely that any of the terms are going to be read or considered carefully by the very people that you want to communicate these to.
So, if we think about our agreements, essentially it’s a checklist for us. It’s a way for us to think about the important elements of our relationship with our clients, and that essentially means that we need these documents to be something that we understand and that they understand.
Another important thing to do then is also to review your terms and conditions and to work out what are the really important clauses to you and restate this to your clients in a really clear and succinct way in a separate communication to your client.
A nice way to do that, for example, might be to send out a welcome pack, or onboarding documents, or whatever you call them.
Firstly, as I said you need to understand the documents and then you need to make sure that your clients understand them as well.
Then, the next element to consider is whether or not you’re actually complying with the terms yourself, so you need to put the systems in place to make sure you can deliver your services or goods the way you’ve promise them.
You need to be rigorous about the standard of products and services you provide and the way in which you provide them, and this is particularly important as you grow because sometimes businesses grow quicker than the systems that are supporting them and the reality is that poor customer service will cost you dearly in the long run. So, if you’re making promises that you’re not going to back up, then you’re going to be creating a difficult contractual situation for yourself, but you’re also going to be creating bad blood with your customers.
So, you need to jump on issues quickly. You need to communicate early and this means that you need to have systems in place that can identify the issues before they escalate.
And fourthly, make sure your clients don’t slip too far away from the obligations that they have under the contract.
This can be a slippery slope. Sometimes, it feels really hard to pull up clients if they are not complying with their end of the bargain, but it’s really important that you reign them in gently at first, but quickly because these sorts of things, as I said, can end up being a slippery slope. So you need to have systems in place that can help you to identify if your client’s aren’t complying with their obligations and you need to ensure that you deal with it as soon as you’ve identified these as an issue.
The cost of inaction
What if you’re busy and you don’t have time for thinking about your terms of sale and you think people don’t even read them anyway? The thing that I would say to you in this situation, which I completely understand – we’re all busy and, as I said before, certainly there’s the belief that people often don’t read the terms and conditions that you send to them.
I think it’s really important that you think about the cost of inaction. So think now about what it would cost you if even just a few clients decided that they didn’t pay. Obviously, this is far, far greater potential cost than the cost of actually sitting down and going through the process properly.
What if, on the other hand you get upfront payments or deposits to cover your initial costs so you figure slow payment isn’t relevant? Don’t think you’re immune in this situation. We see lots of instances of customers demanding money back which then puts a strain on the business. But, simple economics aside, remember that client’s that are unhappy can do a lot of harm to your brand, so the concept of proper client engagement is as much about building and protecting your brand it is about legal and financial protection.
Four Action Steps for You to Take
We’ve talked about what you can include in your terms and conditions, now let’s talk about the Action Steps that you should be following in relation to this whole process, once you’ve got your terms and conditions, to ensure that you’re implementing them in the correct way. And, remember, if you’d like a download of this guide that we’ve gone through today, head over to our show notes at talkinglaw.com.au and download the guide from there.
So, your action steps are four to keep it really simple:
- Firstly, as I said review your terms and conditions of sale.
- Do you have each of the elements that we’ve discussed above? That’s the first thing;
- Are they compliant with current legislation?
- Are they easy to read and understand?
- Do your customers actually sign them, or do they just a tick a box that you know they’ll never be able to read?
- Do you understand what’s in your terms and do your staff or to the other staff in your organization understand what’s in your terms?
So these are the first things to do in relation to your review of your terms and conditions of sale.
- Then the second action step, is to think about your process of on boarding. Once you’ve got your terms and conditions right – once you’re confident that they contain all of the right elements and once you’re confident that you have produced them in a way that your clients and your staff will understand them, then now think about on boarding of your clients.
If your clients receive your terms and conditions in a tick a box exercise, then I would suggest that you separately send your terms to your clients as part of the onboarding process to give them the opportunity to have a copy of the terms, so that they can have a read through them. Obviously, it won’t be so exciting for them to read through the terms and conditions if they’re long and boring, so this gets back to ensuring that your terms and conditions are easy to read in the first place. And then, in your process of on boarding, the other thing that I recommend is being clear about the items that are important. So, as I said before, restate them in a welcome pack. You can say things like this in a nice way but just make sure you’re communicating it clearly.
So we’ve talked about the action steps of reviewing your terms and conditions of sale and thinking about your process of on boarding. The third element in your action step here is to review your systems for complying with your terms.
System and compliance reviews
- Do you measure how you are delivering your goods and services?
- Do all of your client-facing staff understand the terms and conditions and your obligations and your client’s obligations?
- Do you pick up your clients if they aren’t complying?
- Are there review periods in these terms?
Think about all of these issues in relation to how you can build systems to ensure that you are complying with the terms.
And finally, and this is action step number four, have a process for ensuring that you jump on emerging problems quickly before they gather speed.
So that’s it. That’s all I have today to say about this episode so just a quick recap. In this episode we talked about:
- Ways to set up your client relationships correctly right from the start. If you’d like more information about this topic, as I said, head over to our show notes at talkinglaw.com.au for your free download and through that website, you’ll also be able to get a transcript to this podcast episode if you’d like to hear or read each of these elements in more detail, and there you’ll also find details of how to contact our lawyers at Aspect Legal if you’d like help with any of the items we covered today.
We can certainly help guide you through what can be a bit of a complicated process if you’re trying to do it on your own.
And finally, if you enjoyed what you heard today, please head over to iTunes and leave us a review. We’d be very grateful and if you’d like us to talk about a particular topic, feel free to head over to our website and leave us a voice message with a particular question or issue that you would like covered. We’d be more than happy to cover any of the questions that you have and certainly I’d really like this podcast episode to be all about what you want to hear about.
Ask me what you want to hear about commercial law and business law and I’ll try to cover it in the future.
Thanks for listening in to what can sometimes be a dry topic, but I really hope you’ve got some pointers to take away that will help you really super charge those client relationships and help you ward off problems before they occur.