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Grinding back when good clients start to Grind
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Nick’s right- it’s best to have these things in there from the start. Same with pricing in general. It’s just so hard to change things later.
We’ve struggled with a client we have had for almost 10 years, as far as getting them to a more equitable arrangement. They kept coming back with “well, I remember when you shot a video for $1,000- why should I pay you $15,000 for my tv commercial?”. Eventually, and I hated it- REALLY hated it- we had to let them go.
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http://www.patrickortman.com
Web and Video Design -
People often look at this as losing a client. While this did happen, it happened long ago… when their funds ran out.
Don’t beat yourself up over it. When I was younger, I had a motto of there is no good reason to ever lose a client. Now, brother lack of funds is a fine reason to lose one.
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and when the client called twice asking to speak to me I didn’t call them back. Two hours after his second call the money was in our PayPal account. That night they got the report that the spot was uploaded to the cable provider.
I then sent them a bill for the upload.
I will not proceed on the rebranding of the next spot until the bill for the upload is paid. Extremely small but they’re going to learn a lesson.
If their funds are gone they can go away with no loss to us. Oftentimes though the funds are there but they just think they can use you for an interest free loan to their business and that is all too common.
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I agree with most here, BUT There is a real cost associated
with getting new clients that should not be ignored.
The small bill mentioned here might be a lot less than a
fancy dinner to schmooze a new client. For sure, I’m not
saying bend over, What I am saying is that it’s better to
work with a client in distress than to blow them up.
They could land a whale next week and ring your phone to gloat
“I just got a million dollar contract and you’re not getting a dime
because when I was down you kicked me in the gut”
Remember the scene in Pretty Baby where Julia walks back into
the fancy Rodeo Drive shop, Hoists up her bulging bags and says
“You work on commision right? Big Mistake, Huge”
So with clients in tough times it’s
“Swim Together or Sink Alone”Neil Hurwitz
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[Neil Hurwitz] “What I am saying is that it’s better to
work with a client in distress than to blow them up.”That’s if you believe the client is in distress. Some clients figure they can get away with it.
I was senior editor at a big facility in which a client was six months behind in payments. They’d usually book half the edit rooms on any given day. It’s not that they stopped paying, they just got into the habit of paying six months late. The client threatened to leave every time the facility asked them to catch up. They paid their bills (the ones for six months back as they aged to that point). Since they were paying, the facility accepted those terms.
It turns out they were banking the money in short term CDs to make interest which is why it was always six months behind.
The facility went under. The client simply moved to another facility.
That whale can sink your ship. Business models and business plans have a purpose. They’re not philosophy statements. It’s what you’ve decided so you business survives and, hopefully, has the opportunity to grow.
Sure it’s hard to get new clients but it’s easier to do that then get sunk by the old ones. Removal of a diseased tumor is certainly painful but the alternative may be worse.
If you’re a small shop, it may only take a few, out of many clients, to do serious damage to your income and expenses.
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Does anyone else done this? I have two long term clients: one I produce training videos for, they are the US’s largest bank and only do 90 days net and the other I DP for and put together the crew, sometimes a large crew, they are the US’s largest packaged food company and are now 60 net for everyone. Both pay exactly on that day, then there’s maybe three days in the mail.
All costs are “soft”, meaning no “hard” costs like airfare, hotels, etc. So what I do is tell the crew and vendors like teleprompter services, etc., “I have good news and bad news. The good news is I have a good piece of work that we can bump up in rate due to their being a late payer. The bad news is they will be 60 days (or 90). Are you in or out?” Perhaps if it’s a kid in his twenties who needs the money badly I will pay out of my own pocket, otherwise all us older pros will wait. That’s the deal.
Since the people I call have worked with me, sometimes for decades, and we know these are two of America’s largest companies with no danger of going under, most people I call are cool with it. I email the day I get the check that their check will be going out in that day’s mail.
The food company: ALL vendors are 60 days, no matter what. No upfront, no negotiation, period!
The big bank you all know: They are 90 because they are worried about vendor fraud and the invoice has to go through MANY layers of approval, and if it’s for a new department I start all over as a “new” vendor with incredible paperwork. I have worked with both companies for many years, going back to when 30 was the norm.
But…there’s a premium I charge and I can bank on the exact day the check will arrive. Most of the work all of us on this forum would consider not too challenging. Seems like sticking to my guns about upfront and 30 days net would be shooting myself in the foot. Anyone else do this?
Ned Miller
Chicago Videographer
http://www.nedmiller.com
http://www.bizvideo.com -
[Ned Miller] “Seems like sticking to my guns about upfront and 30 days net would be shooting myself in the foot. Anyone else do this?”
There are indeed some clients that simply can’t budge because of corporate rules, and if you try to force them, you’ll be history. Those aren’t the ones that are the real problems, it’s the ones who tell you 30 or 60 days, but don’t pay for six months, or who never pay, that you have to really worry about.
David Roth Weiss
Director/Editor/Colorist
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
EPK Colorist – UP IN THE AIR – nominated for six academy awards
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, Indie Film & Documentary, and Film History & Appreciations forums.
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Years ago my shop did tons of work for one of the worlds
largest pharmaceutical companies, as long as I had the right
paperwork and Po’s it was 30 days like clockwork. CEO retires,
my contacts at senior management level told me the new CEO is a
hatchet man and get ready for a sh-t storm. Sure enough 2 months later I get a form letter saying that the company is going to a
“Net60” policy No Exceptions, Take it or Leave it. This company
spends Billions a month so they created a “profit center” out of a “cost center”. So I just added a little to my rates, no problem.
Then the real hammer came, everything over 1,000.00 had to be triple
bid. The end of an era for me. If you have locomotive clients
(that pull the train) you are always vulnerable. It’s the age old question, Is it better to have 100 clients each representing 1%
of your billing Or 5 clients each representing 20%?
It has been my experience that Unless you have some really
big clients, % wise, you are in for a tough haul.
I would be interested to get a concensus on thisNeil Hurwitz
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[Neil Hurwitz] “Is it better to have 100 clients each representing 1%
of your billing Or 5 clients each representing 20%?”There is such a thing as too many clients, at least for a sole proprietor. I’ve seen some talented craftsmen, who are getting more business than they can handle, expand from being successful freelancers to mediocre managers. They think they are good at hiring talented people and motivating them, but they learn how difficult that can be. And on top of that, they now have a “nut” to meet every month. The talents of a great cameraman/producer/editor are not even distantly related to the skillset of a manager.
Small can be good. My clients know that I’m focused on their interests, and I think they appreciate it. Do I want a few more? Of course. But not many more.
This can be carried to an extreme; corporate outsourcing has led to people who are called freelancers being hired full-time, for years on end — in effect, employees in all but name and certain benefits. But even being an official employee is no guarantee of job security. That bird is a vanishing species.
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I think this is a valuable perspective. When an ongoing client suddenly becomes slow to pay, take the time to find out the real story.
Sometimes balls do get dropped. I’ve had this happen more than once, and all it took was a courteous phone call or two to get it straightened out and get paid. One time very recently, the client paid EARLY but I never received their check for whatever reason. Mail really does get lost by the post office, every so often. This was a client who had been slow-paying on four previous occasions, so it would have been easy for me to assume, ‘there they go again, the SOBs’ and go off on them. But, I didn’t. One polite phone call later and they FedEx’d my check for next day delivery, which was totally unnecessary (a slower service would have been perfectly acceptable). Clearly, having a level head about it paid off.
Sometimes clients are having cash flow issues but are reluctant or ashamed to talk about it… so they lie to you or tell lower-level flunkies to give you a story. Making the client comfortable with leveling with you as to why they are slow to pay, can reveal quite a bit and possibly offer a path to resolution.
And… sometimes they are just trying to float their business on your back. Maybe they are going downhill. Maybe the boss’ son took over and he has no clue how to run the show except into the ground. I’ve seen over and over that exact situation, where a family member (usually the son) takes over a business and has no vision other than cutting costs and grinding vendors.
But… at least take the time to find out. That’s just good business sense.
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