Harassing Your Client 101
I was thinking about the problem of a client trying to stiff you. I agree that there comes a time to stop trying to give yourself a heart attack. There's a reason why they invented the phrase "cut your losses." Sometimes walking away is the only smart thing to do.
The REALLY smart thing to do is to never try to skip out on a bill on my wife's watch. When we ran our production business together, she found a variety of ways to make the deadbeat's life such a living hell that they coughed up the money FAST.
**If they have an office, bring a book, food and drink. Make it known that you're not leaving until you get paid. Make it known to all who enter as well.
**No office, no problem. Start calling others in the business community asking for their advice on how to collect from deadbeat clients. As soon as they start talking, interrupt and say, "Because I delivered to Dude McDude 3 months ago and he's still holding out on me. The bitch is that he said that the work is fine, he'll get back to me soon...blah blah blah. What do you think I should do?"
The second worst deadbeat my wife ever had to chase showed up with the money the next day. Word spreads fast.
Obviously works best in the smaller the town, and the closest to the circle you can get.
In fact, with this guy in particular, he was very well liked. Volunteered with a bunch of charities, served on boards...but then folks started to realize, wait a minute -- he's tried to weasel me too! Wasn't long before the noose closed and this guy left town.
**The nuclear option: call his wife. Call when you KNOW he's not there.
"I'm so sorry to bother at you home, Mrs. McDude. I can't believe how rude this is, but I really need your help. Your husband Dude has been saying he'll get me a signature, but we keep missing each other. Can you help me track him down? I wouldn't even think about calling at home, but it's been 3 months and he still hasn't paid me. He's where? Wow, thanks so much! And again, I'm so sorry to call you at home."
That was what she did to the WORST deadbeat we ever had. He showed up the next day too.
Admittedly works very VERY best when the caller is a woman too: "MEN! What are you going to do, right? Hahahaha."
In any case, guess what? No deadbeats after that.
Not that she scared away business, either. Quite the contrary. People saw us as hard-core keepers of our word...and wanted our tenacity working for them....and not against them. Let their competitors make that mistake. :-)
Going hard against our couple of worst deadbeats was the second best thing we ever did to grow our business.
The BEST thing we ever did? Double our rates. But that's another post. :-)
All that said, if it's keeping you up at night, kick the client to the curb. Consider the money you leave behind as a down-payment on a longer, happier life.
Creative Cow Magazine
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.
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!
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.
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!
Magnetic Image, Inc.
[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. :-)
[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...
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.
[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.
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.
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.
I agree that if it's just a talking head interview, local shooters usually offer better prices, but you have to weigh it against some risk. I've never been burned by a local shooter that couldn't deliver, but having a videographer that is well versed in the subject matter can really help speed things along if you also gather b-roll to support your story.
For instance, I travel quite a bit working on stories that illustrate the value of partnerships between small businesses and NASA. After interviews, we typically gather footage of the technology either in use or being manufactured.
As a producer, I can direct the videographer as to what to shoot, but we don't always have the luxury to connect a monitor while we run and gun - so it's much easier if they already have an idea of what the story is about, what makes the technology unique, and the style and purpose of the show. Using a consistent crew means I don't have to explain all those things from scratch every time.
With the experienced videographer, I have the luxury of focusing on the content rather than spending my time (=money) to "teach" the local guy.
Just another perspective. I really do enjoy working with local crews when we are not on such a tight schedule.
Tim, I agree completely. I try to never use a local shooter for something specialized, like surgery. For interviews, there has better be a client on location. If it is just the video crew, I need to be very clear ahead of time with what I am looking for. There is nothing like conducting an interview myself, of course, because as you said, I know the subject matter and tend to ask followup questions not on the original list.
[Mike Cohen] "I try to never use a local shooter..."
Me either, I always do it myself. One of the things that people hire us for is our particular "look," and I can't get that by farming a shoot out to someone who has different equipment, lenses, and personal eyeballs and ability. It's not to say that their talent or eyeballs aren't just as good (or better) than mine, but they are not the same... and it shows.
As far as traveling across country or even around the world for something as simple as an interview... some clients think that is a huge waste of resources, but some don't bat an eye at it.
You can never predict what clients will do or how they think. We were recently submitting budgets for a very similar cross-country shoot that's little more than interviews. The client balked a little bit at our proposed travel budget (which was actually pretty slim). Their solution? "Hey, we have a corporate jet... rather than you guys flying here yourselves we should just come pick you up." My reaction of course is "Whaaaaa??!!" Now you know that's gotta cost them a lot more than the price of three commercial plane tickets, but apparently they had some sort of warped rationale about it. Crazy, crazy.
You never know what they are thinkin'.
Fantastic Plastic Entertainment, Inc.
You said a line in your original topic . . .
"Best thing I ever did . . . Double my rates".
Would you be so kind as to expound on that a bit?
Double my rates, and my business drops in half. Cool, I make the same amount of money and work half the amount of time! Then, of course, I can put to good use the new-found additional 6 MONTHS of my life from that year and work (any guess???) yep, at the NEW rate.
IS this how it can work or is this a figment of my new-math imagination?
I recall a story of a guy doing ANYTHING he could to sell his widget. He priced it at an unbelievable $20. Well, he tried and tried but ultimately he couldn't sell them. People thought it probably wouldn't work well if it was only $20. So, he raised the price to $200, and they sold like hotcakes! "It must be great", the people said, "I'll take two!". The price affected the perceived value and sometimes that made all the difference. Same product (in our case, same service or product), but pricing it higher made it sell better.
And then there's:
Charge what the market will bear
Price it competitively
Charge what you're worth
Tim Wilson, what do you think?? I'd love to hear your feedback on this topic.
Frozen Fire Films
[Travis Petty] "...The price affected the perceived value and sometimes that made all the difference. Same product (in our case, same service or product), but pricing it higher made it sell better."
That's a big part of it right there, Travis. Think of setting your price as one aspect of marketing. You're telling potential customers exactly what they should think about you.
To begin, I came in under the most expensive guy in town, but still stay in the top half of the market. I'd rather have gone back to retail -- which I enjoyed just fine, thanks -- than try to build a business chasing the LOWEST prices the market can bear. Turns out that the market will be perfectly happy for you to starve.
Then after I felt my work was good enough to stand up to that top guy with a straight face, I started charging more. I had real work to show to back it up, great word of mouth, and a smooth pitch. Sounds easy, right?
There was admittedly a gap while this new plan took off...but once it did, I had more work than ever, from clients that I enjoyed working with more. I didn't wind up making exactly twice as much money - the combination of available hours in a day, plus taking time to breathe a little easier, plus spending more on gear - but it was *some* more, and sure a nicer way to work.
I also found a HUGE benefit. When lowballers called, I did a little gentle weeding. If the caller sounded like a grinder, I sent 'em to the Yellow Pages. But if they sounded like an upright citizen, just with a small budget, I passed them to the people in town I felt could do 'em right on that budget. It didn't take long before my lower-priced "competitors" started adapting parts of their business to work more closely with me. One of them in particular became my go-to guy for second camera, or underwater b-roll for my topside interviews, etc. -- but there became three other guys who could count on me for recommendations, and among whom we could reasonably expect to share gear in emergencies.
I'm summarizing, but you get the idea. Yeah, you can probably build this kind of network anyway, and should probably try -- but it's a lot easier when you're pushing jobs their way that THEY WANT, and you DON'T. That was the cool thing -- I made more money, and THEY made more money because I could funnel work their way without feeling like I was potentially undermining myself.