MAKING YOUR NONCOMPETE AGREEMENTS STICK "I run a small home heating oil business. For years, I have had a wonderful employee who schedules oil deliveries, furnace cleanings, and air conditioning repair jobs for our customers. She has gotten to know pretty much all of our customers over the years, and they all adore her. Last week she announced her engagement to a man who is employed by a competing business. While I have no reason to distrust this employee, I'm concerned that her 'change in life situation' will tempt her to divert customers to her fiance's business or, worse, leave our company to join up with the competition. Should I get her to sign a noncompete agreement? I've been told that they're pretty worthless as the courts don't like to enforce them." It's true that noncompetes are tough to enforce. If your agreement isn't very carefully drafted (and most of the ones I see aren't), a judge will look at it as an attempt to deny someone the right to earn a living, and she will find a way to strike it down. Having said that, your agreement should be enforceable as long as it is reasonable and not overly broad. Warning: Noncompete agreements are very tricky to draft properly. Make sure your attorney does the job, and DO NOT under any circumstances use a "boilerplate" agreement you find in a book or on the Internet. The first step in drafting a noncompete that may actually withstand litigation is to identify the specific behavior you do not want your employee to engage in, as narrowly as possible. In this case, you should be primarily concerned that: -- Your employee does not make copies of your customer lists and other "trade secrets" and hand them over to her fiance; and -- Your employee does not solicit or encourage your customers to call her fiance's business for services that compete with yours. While an agreement prohibiting her from working for any oil service business in the United States after she leaves your employment would almost certainly be stricken down as overly broad, courts are much more likely to enforce "trade secrets" and "nonsolicitation" agreements like these, especially if they prohibit only the disclosure of information (such as a customer list) that any reasonable business would consider sensitive and confidential. If you still want to make your employee sign a "noncompete" -- an agreement that prohibits her from working in the oil service business for a period of time after she leaves your company -- you will have to think carefully about the "scope" of the noncompete. By "scope" I mean the time period and the geographic area within which your employee will not be allowed to work in your industry. A five-year time period is probably too long, and six months would probably not give you enough time to engage in "damage control" -- hiring a new employee, training him or her, and notifying your customers of the change -- if your employee just up and quits. I would settle on one to two years maximum. As for the geographic area, the agreement should cover only her fiance's business and any other oil service company within the area your company services. Look through your list of customers and make a list of the ZIP codes where they reside. Since your real objective here is not to lose customers, limiting the "noncompete" to just those ZIP codes will make it hard for your employee to argue that she is being denied the right to earn a living. Finally, once you and your attorney have agreed on the precise wording of the noncompete, you should: -- Be sure to meet with this employee privately and discuss the situation with her informally before handing her any sort of legal document; -- Reorganize her job duties so that customers hear other employees' voices when they request service calls; -- Offer her something she isn't already entitled to (such as a year-end bonus or an additional week's severance pay upon termination) in exchange for signing the noncompete; and -- Require that all employees having contact with customers sign the noncompete (in exchange for the same extra compensation) -- that way she will not feel "singled out" (or possibly discriminated against) because of her marriage plans.
Learn How To Win Customer By Doing Better Customer Relationship Management 1. Smile Nothing can turn a hostile situation into position moment faster than a sincere smile. A smile that says, "I want to help you in a positive way." It communicates you are positive about the interaction with the customer. A sincere smile enhances the communication process so that you can find the solution faster. 2. Introduce Yourself as the Solution Creator Make sure you introduce yourself, find out the customer’s name, and let your customer know your position and why you are there. This lets the customer know you are taking responsibility to creating a solution for them. You might say something like: "Hello, my name is Mike. I am the manager at this location. I am here to assist you in this situation, please tell me about it." Notice I didn't say, "What’s the problem?" By using "What’s the problem?" you start the customer service situation in a negative note. The customer is thinking "You’re the problem," "This establishment is the problem," "The whole world is the problem," etc. By starting your conversation with "I am here to assist you in this situation, please tell me about it" you are setting up a "verbal agreement" in the customer’s mind to move to a solution. Note: If possible, please use the customer’s name throughout the conversation. 3. Listen Customers want tell their side of the story and feel like they are only heard but you listened to them. Mentally take a step back and dedicate yourself to actively listening to the customer’s story with an open mind so that you can find a solution. In the above situation, the manager stood silently while my students were explaining their story. Be active in your listening and create empathy ("put yourself in the customer’s shoes") with statements such as: * "I can appreciate what you’re saying." * "I can understand how you’d feel that way." * "I can see how you’d be upset." * "It sounds as if we’ve caused you inconvenience." * "What I understand the situation to be..." Please stay away communication that alienates the customer such as: * "I don’t know why you are so upset." * "That’s the first complaint we ever got on that." * "I know how you feel." (Because you don’t) * "Boy, you’re sure mad." In the above story, the students told the manager that they weren’t happy with the service because they didn’t have time to eat their meals. The manager, not listening, said, "Would you like dessert?" The solution was not more food. Listen for the solution! 4. Be Sorry for the Right Reasons Be sincere in your concern for the customer and say sorry the correct way. Many time in the heat of the customer service situation we what to show some sign of concern so we do the following: * The first words of the interaction with the words, "I’m sorry." First, you didn’t find out any information from the customer to be sorry. * Say sorry throughout the conversation with saying what you are sorry for. When saying you are sorry, say exactly what you are sorry for. The students, even though the manager kept repeating she was sorry, didn’t think the manager was sincere in her apology. The correct say to say you are sorry is: * "I’m sorry you had to wait so long for your food." * "I’m sorry that you were treated that way." * "I’m sorry that our employee said that to you." * "I’m sorry this situation happened to you." Let the customer know exactly why you are sorry. The students thought the manager’s "sorrys" were insincere because she never mentioned why she was sorry. 5. Give Your Personal Assurance. Let the customer know you will personally create a solution for them. It could be as simple as saying, "I’m taking personal responsibility for this." 6. Ask Them What They Want One of the fears that we have when trying to satisfy the customer is that we think they want something out of our reach. Ask the customer, "What would you like you to do?" or "What would make this situation right for you?" You will be surprised that in most cases the customer will ask for less you were willing to give. 7. Use Statements of Conviction Sure the following to gain the confidence of the customer: * "We’re going to do something about that!" * "We will make a change right now!" 8. Present a Clear Plan of Action Make sure the customer knows what you are going to do to correct the situation for them. 95% of making things right for the customer is making them aware that you are taking action to make a difference for them. Explain to them the actions and timelines you need to take to make things right for them. If you need to leave or make a telephone call to obtain additional information, say: * "Please excuse me while I make a telephone call obtain the best solution for you. This will take five minutes, can you please wait?" * "Excuse me, I need to ask the person with the missing piece of information so that we can quick resolve this for you. Do you mind waiting five minutes?" Note: Make sure you get back to the time customer before the time you specified. If you promised ten minutes, get back to the customer before ten minutes. Rule of thumb, double the time it would normally that to get the information. If you know it will take ten minutes to get the answer for the customer then tell the customer you will get back to them within twenty minutes. 9. Move Quickly to the Solution If you applied steps 1-8 you are ready to give the customer the solution they wanted for a win-win situation. You can confirm this by saying the following: Source : http://www.geocities.com/customer_relationship_management//win_customer.htm
Price From Wikipedia, the free encyclopedia Jump to: navigation, search For people whose family name is Price see Price (disambiguation). In economics and business, the price is the assigned numerical monetary value of a good, service or asset. The concept of price is central to microeconomics where it is one of the most important variables in resource allocation theory (also called price theory). Price is also central to marketing where it is one of the four variables in the marketing mix that business people use to develop a marketing plan. Conventional definition In ordinary usage, price is the quantity of payment or compensation for something. People may say about a criminal that he has 'paid the price to society' to imply that he has paid a penalty or compensation. They may say that somebody paid for his folly to imply that he suffered the consequence. Economists view price as an exchange ratio between goods that pay for each other. In case of barter between two goods whose quantities are x and y, the price of x is the ratio y/x, while the price of y is the ratio x/y. This however has not been used consistently, so that old confusion regarding value frequently reappears. The value of something is a quantity counted in common units of value called numeraire, which may even be an imaginary good. This is done to compare different goods. The unit of value is frequently confused with price, because market value is calculated as the quantity of some good multiplied by its nominal price. Theory of price asserts that the market price reflects interaction between two opposing considerations. On the one side are demand considerations based on marginal utility, while on the other side are supply considerations based on marginal cost. An equilibrium price is supposed to be at once be equal to marginal utility (counted in units of income)from the buyer's side and marginal cost from the seller's side. Though this view is accepted by almost every economist, and it constitutes the core of mainstream economics, it has recently been challenged seriously. There was time when people debated use-value versus exchange value, often wondering about the Diamond-Water Paradox. The use-value was supposed to give some measure of usefulness, later refined as marginal benefit (which is marginal utility counted in common units of value)while exchange value was the measure of how much one good was in terms of another, namely what is now called relative price. That debate is no longer useful in talking about price. Relative and Nominal Price The difference between nominal price and relative or real price (as exchange ratio) is often made. Nominal price is the price quoted in money while relative or real price is the exchange ratio between real goods regardless of money. The distinction is made to make sense of inflation. When all prices are quoted in terms of money units, and the prices in money units change more or less proportionately, the ratio of exchange may not change much. In the extreme case, if all prices quoted in money change in the same proportion, the relative price remains the same. It is now becoming clear that the distinction is not useful and indeed hides a major confusion. The conventional wisdom is that proportional change in all nominal prices does not affect real price, and hence should not affect either demand or supply and therefore also should not affect output. The new criticism is that the crucial question is why there is more money to pay for the same old real output. If this question is answered, it will show that dynamically, even as the real price remains exactly the same, output in real terms can change, just because additional money allow additional output to be traded. The supply curve can shift such that at the old price, the new higher output is sold. This shift if not possible without additional money. From this point of view, a price is similar to an opportunity cost, that is, what must be given up in exchange for the good or service that is being purchased. The price of an item is also called the price point, especially where it refers to stores that set a limited number of price points. For example, Dollar General is a general store or "five and dime" store that sets price points only at even amounts, such as exactly one, two, three, five, or ten dollars (among others). Other stores (such as dollar stores, pound stores, euro stores, 100-yen stores, and so forth) only have a single price point ($1, £1, €1, ¥100), though in some cases this price may purchase more than one of some very small items. Marxian price theory In Marxian economics, it is argued that price theory must be firmly grounded in the real history of economic exchange in human societies. Money-prices are viewed as the monetary expression of exchange-value. Exchange-value can however also be expressed in trading ratios between quantities of different types of goods. In Marxian economics, the increasing use of prices as a convenient way to measure the economic or trading value of labor-products is explained historically and anthropologically, in terms of the development of the use of money as universal equivalent in economic exchange. However, in an anthropological-historical sense, Marxian economists argue a "price" is not necessarily a sum of money; it could be whatever the owner of a good gets in return, when exchanging that good. Money prices are merely the most common form of prices. Marxian economists distinguish very strictly between real prices and ideal prices. Real prices are actual market prices realised in trade. Ideal prices are hypothetical prices which would be realised if certain conditions would apply. Most equilibrium prices are hypothetical prices, which are never realised in reality, and therefore of limited use, although notional prices can influence real economic behaviour. According to Marxian economists, while all labor-products existing in an economy have economic value, only a minority of them have real prices; the majority of goods and assets at any time are not being traded, and they have at best a hypothetical price. Six criticisms Marxian economists make of neoclassical economics are that neoclassical price theory: • is not based on any substantive, realistic theory of economic exchange as a social process, and simply assumes that exchange will occur; • simply assumes prices can be attached or imputed to all goods and services; • assumes equilibrium prices will exist and that markets tend spontaneously to equilibrium prices; • fails to distinguish adequately between actual market prices; administered prices; and ideal, accounting, or hypothetical prices. • disconnects price theory from the real economic history of the use of prices. • is unable to provide a coherent explanation of the relationship between price and economic value. Austrian theory The last objection is also sometimes interpreted as the paradox of value, which was observed by classical economists. Adam Smith described what is now called the Diamond–Water Paradox: diamonds command a higher price than water, yet water is essential for life, while diamonds are merely ornamentation. One solution offered to this paradox is through the theory of marginal utility proposed by Carl Menger, the father of the Austrian School of economics. As William Barber put it, human volition, the human subject, was "brought to the centre of the stage" by marginalist economics, as a bargaining tool. Neoclassical economists sought to clarify choices open to producers and consumers in market situations, and thus "fears that cleavages in the economic structure might be unbridgeable could be suppressed". Without denying the applicability of the Austrian theory of value as subjective only, within certain contexts of price behaviour, the Polish economist Oskar Lange felt it was necessary to attempt a serious integration of the insights of classical political economy with neo-classical economics. This would then result in a much more realistic theory of price and of real behaviour in response to prices. Marginalist theory lacked anything like a theory of the social framework of real market functioning, and criticism sparked off by the capital controversy initiated by Piero Sraffa revealed that most of the foundational tenets of the marginalist theory of value either reduced to tautologies, or that the theory was true only if counter-factual conditions applied. One insight often ignored in the debates about price theory is something that businessmen are keenly aware of: in different markets, prices may not function according to the same principles except in some very abstract (and therefore not very useful) sense. From the classical political economists to Michal Kalecki it was known that prices for industrial goods behaveddifferently from prices for agricultural goods, but this idea could be extended further to other broad classes of goods and services. References • Milton Friedman, Price Theory. • George J. Stigler, Theory of Price. • Simon Clarke, Marx, marginalism, and modern sociology: from Adam Smith to Max Weber (London: The Macmillan Press, Ltd, 1982). • Makoto Itoh & Costas Lapavitsas, Political Economy of Money and Finance. • Pierre Vilar, A history of gold and money