R5 — Diagnose previous-vendor failures as competence or integrity; route the repair strategy accordingly (apology vs structural commitments)

Rule: When a prospect references a previous bad vendor experience, the diagnostic question is not "what happened?" but "did they fail to deliver or did they misrepresent?"

• Competence-framed failures ("they didn't know what they were doing," "the work was bad") → addressable through demonstrated Candid competence. Apology-shaped acknowledgment of the previous vendor's mistake is congruent.
• Integrity-framed failures ("they took my money and disappeared," "they lied about timelines," "they billed for work that wasn't done") → NOT addressable through competence demonstration alone. Requires structural commitments: milestone billing, written deliverables before next payment, references the prospect can call directly. These defuse rather than answer the integrity question.

Why: Kim, Ferrin, Cooper & Dirks (2004) shows the asymmetry — apology works for competence, denial works for integrity ([[kim-ferrin-cooper-dirks-2004-competence-vs-integrity-trust-repair]]). Negative integrity information is more diagnostic than negative competence information ([[rozin-royzman-2001-negativity-dominance]]). Substituting one repair strategy for the other backfires.

How to apply:

• Listen for the moral content of the complaint. "They were bad" = competence. "They were dishonest" = integrity.
• For competence complaints: show the work. Detailed case studies, named projects, technical depth.
• For integrity complaints: offer structural protection. Escrow, staged billing tied to inspectable deliverables, a list of three current clients the prospect can call without notice. The cost of the structural protection is low; the signal value is high.
• Do not protest innocence in the abstract. Integrity violations don't repair through assertion.