Pulling a triumph out of a disaster – How to save client relationships when the going gets tough
According to Murphy’s Law ‘if there are two or more ways to do something, and one of those ways can result in a catastrophe, then someone at some point will choose the catastrophic way’.
Pessimistic perhaps, but for small businesses in the marketing, media and advertising world there is more than a whiff of Murphy’s inevitability that however careful and professional you are, something will go wrong at some stage.
It could be a typo in a brochure you produce for a client, or a breach of copyright for an image you use on a client’s website to give just two examples, but whatever it is, it could be very damaging to your long-term client relationship.
The challenge then, even more so when a single client relationship is critical to your business, is how can the impact of an error be minimised once Murphy has struck so that even after a problem, your client is happy to retain your services?
Pulling a triumph out of a disaster
The good news is, even the biggest of disasters can be turned around, to the point where the impact of a mistake has been minimised – or even go unnoticed by the client!
Here’s a case in point: an advertising agency we insure for professional indemnity – insurance to protect against professional negligence – went live with a high profile TV campaign they had developed for their client. The airtime alone cost millions of pounds.
On the second day of airing it became clear that they had failed to secure the licensing agreement for the music used in the advert.
To be precise, the agency HAD secured the license – but for the wrong album track!
Before the client became aware of the problem, the agency turned to us to come up with a solution. We were able to negotiate with the licence holders and settle on a level of compensation to ensure the advert could continue to be used without making any changes.
The client never heard a whisper about the problem. Claims are often nowhere near as big as that one had the potential to be, however.
We often receive notifications from policyholders who have produced marketing literature for a client and then realised they have made a mistake in the printing – in one case we dealt with, they had produced a calendar featuring 31 February!
In many cases, we’ve been able to pay for the material to be reprinted before the client was aware of a problem.
The key lies in taking proactive action at an early stage. Professional indemnity insurance is there to help when a claim goes to court and the lawyers get involved, but many small businesses don’t realise that a good professional indemnity policy can also help rectify a problem before a client even knows about the problem and long before the lawyers need to get involved.
Who owns that image you used?
Another common issue we see is agencies using images from a stock library that they believe (usually in good faith) to be royalty free, but which subsequently turn out to be copyright owned by organisations such as Getty who are quite ingenious (and rigorous) at monitoring usage of their images.
Again, we’ve been able to intervene to help smooth things over, the point being in all these instances is that if your professional indemnity insurer is notified as soon as there is a potential problem with work you’ve done for a client, they may well be able to help rectify the mistake even before that client notices.
Even if the client is aware, early notification means your insurer can help mediate a settlement that will, in many cases, appease your client and hopefully protect a long-term relationship.
First line of defence
Professional indemnity insurance is the first line in your defence when the inevitable mistake happens and your insurer should, as soon as they are notified, be proactive in helping you resolve the problem to your client’s satisfaction.
Our advice for every small business operating in the marketing, media and advertising sectors is to:
• Check you have appropriate professional indemnity cover (and that it includes rectification cover)
• Let your insurer know as soon as you think there might be a problem – not all notifications will lead to a claim but we’d prefer to know as early as possible (that way we can judge whether early intervention is necessary)
By the way, if any further evidence was needed around the importance of early action, it’s also worth remembering that the second rule to Murphy’s Law is that ‘left to themselves, things tend to go from bad to worse’.
This previously appeared on Hiscox’s Small Business Blog. To read more insightful comment go to: www.hiscox.co.uk/business-blog
Angela Weaver, head of media underwriting, Hiscox
Web: www.hiscox.co.uk/drum
Twitter: @hiscoxuk
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