Harassing Your Client 101

[Mike Cohen]

We have a few channels of money making. One is direct sales at trade shows. We used to come home with a stack of carbon credit card receipts, only to find about a dozen were declined. The best thing we ever did was buy a card reader for the shows, so we know right away if a card is declined. This is loss prevention.

I have worked with production companies that require a credit card payment for the first job, until credit is established. Requiring 50% up front on a project that is billed is a good move.

Mike

[Mark Suszko]

Generally your first few dealings with any gear renting company would work that way as well, security deposits and holds on credit cards for insurance and such. I would suggest a single credit card just for that purpose alone, and starve your children before you allow that card to ever go bad. Lord knows they’ll starve more if you can’t work because of bad credit. A guy that’s never late can sometimes work something out in an emergency, but a guy with a history of slow pays or bounced checks finds fewer doors open to him when he needs them most. And they may never tell you why they won’t help you; they’ll always be able to say they’re just all booked up, even if they’re not. Unless you can afford to move every twelve months, you need to keep your own professional credit history surgically clean.

Or people may start thinking YOU are a grinder!

[Tim Kolb]

Just an interesting recent situation I was in…to change things up a touch…

We had a series of spots we did, and for a variety of reasons, the delivery schedule got stretched out to a ridiculous point…we had a couple of subcontractors on the job and while we typically cash flow our subcontractors invoices so they get paid in a reasonable amount of time, the economy has hit us a little hard in the last couple months.

So…I simply stayed on the phone with these people assuring them they will be paid, trying to keep them up to date on what was going on… Then when i finally got paid, I got on the phone so that they could all give me the current invoice amounts including late fees, because I felt those fees were justified.

…in a weird turn, most of the late fees were either waived or were assessed as a ridiculously low number ($10 on a 2200 bill crowding 150 days…1.5% a month over 30 should have put the late fee at 12x that easily…).

I think most of the time it’s a matter of just being honest and staying in contact with people. Things happen and everyone gets that, if we’re looking out for each other’s backside, client, vendor, subcontractor, whatever…we create relationships that make doing business a lot easier.

The Golden Rule applies. Always.

TimK,
Director, Consultant
Kolb Productions,

[Chris Blair]

I can second the “golden rule” idea. We have a large national client that’s probably going to file bankruptcy. In late summer and early fall they got way behind on payments…one of which was for a large weeklong shoot where we incurred a lot of sub-contract fees for grip trucks, make-up artists and the like.

We got on the phone and used email to keep all these folks updated as to why their payments were late. None accessed us any late charges, and only one even called regularly to check up on the invoices. It helps that we work with this same group of people almost exclusively on large shoots and they’ve always been paid very quickly. But by keeping them updated, they realized we too were getting stiffed and they cut us some slack.

As to the original posts creative solutions at collecting…I wish I had a woman on staff with that much gumption!

Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com

[Tim Wilson]

[Chris Blair] “As to the original posts creative solutions at collecting…I wish I had a woman on staff with that much gumption!”

You don’t need to be a woman to pull those off, not by any means. Just that being a woman adds another dimension to The Nuclear Option. The trick when talking to the wife of the deadbeat if you’re a man is to NOT treat the deadbeat’s wife as a peer — which a woman collector can. The play for a man is one of supplication and gratitude, which you should all be used to by now.

But my point in this thread wasn’t to extend sympathy for the truly hard up. Yeah, you have to extend leniency or write those debts off like any of their other creditors. And you definitely have to get used to the idea that bigger creditors might indeed wind up getting some or all of their money while you might get none. That’s the way it goes, and it’s not worth getting your stomach in knots over. No matter how good the intent of somebody going into a deal, things happen. Depending on the client, you may even be able to sit down to a meal together and commiserate.

I started this thread thinking about clients who are just being dicks. 🙂

[Grinner Hester]

right on, man.
I’ve had several people ask me “so what do you do if your bid or your rate is too high for a client?”
man I thank em for calling. If they are real cool, I’ll even help em find a cheap place to help em out.
My rate is not something that has ever had anything to do with other people’s budgets.

[Tim Kolb]

[Tim Wilson] “I started this thread thinking about clients who are just being dicks. :-)”

So we’re clear…I wasn’t offering a counter to your point…I was offering how well it works when the party having payment issues just makes an effort…

It takes some humility to do this…something difficult to find in at least the entrepreneur culture in the USA in my experience.

For customers who owe and go incommunicado on you…I advocate everything I’ve heard in this thread…

TimK,
Director, Consultant
Kolb Productions,

[Tim Kolb]

[grinner hester] “If they are real cool, I’ll even help em find a cheap place to help em out.”

Another funny thing. To expand on that point, in the last year, I’ve probably been able to overcome the cost objection about five times by very nicely counseling the client.

“Oh, well this work can certainly be done cheaper. I’m not the least expensive option in the marketplace and if the low bid is what you (or your bosses) require, I can certainly get you some contact information of some other vendors in the area. I don’t want to waste your time on this…not every vendor is a good fit for every project mr/ms prospect, I certainly understand that…”

About half the times I offered that point into the conversation, I actually did expect that the client would say “Yes, I’d like those names and thank you for your time.” Which would have obviously meant the work was destined for somewhere else…BUT

1. It means that the two of us don’t waste any more time working on something that will ultimately not work.

2. A vendor who is less expensive may or may not do the job desired (I don’t ever ‘sabotage’ projects BTW, I always try to offer someone I feel is competent)…circumstances vary, the client may return, better educated on cost effectiveness next time.

3. The less expensive vendor may do a great job and keep the client, but that client will never speak ill of you as you were honest and helped them solve their problem…and you have cemented your position in their mind as a notch above the vendor they eventually went with even though they’ve not used you…another possibly long-term investment.

TimK,
Director, Consultant
Kolb Productions,

[Mike Cohen]

I too have occasionally recommended a more cost effective / time effective solution. For instance, I hesitate to fly across the country just to shoot an interview. It is better for everyone to use a local shooter, and I will tell a client this.

[Patrick Ortman]

I’ve often referred work to others or backed out of a job rather than accept a gig that isn’t right for my shop. Sometimes it isn’t easy to treat people right, but in the end I figure it’s the best policy.

This past year, we referred one potential client to two different vendors for jobs we aren’t really set up to do. That generated enough good will that when the client DID have a job that was right for us they gave it to us, at our price, without having to go through a bidding process.

Of course, we gave them a very fair price for the work. But it’s important to build relationships in any business.

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