Client abusing our quote?
Some months ago I won a corporate client that is owned by a huge, multi-national corporation. I actually won the client because I knew the marketing manager who moved from another company I used to do video production for. Let me say this was a really good catch.
They have been so pleased with my service and pricing, that they have completely dropped the production company they used before me, which is nice to know. The previous client's slow service and over-pricing helped me out there.
More recently, the marketing manager of another sub-company of the larger corporation contacted me requesting us to film a local event for them. They asked for a quote.
For the production I quoted a certain amount, over-quoting slightly not only to "test the water", but to cover myself in case the unexpected happens.
"We don't have that much in our budget for this job" they responded with, which threw us a bit because the other division NEVER questions our prices. Anyway, to get this new client, we agreed to their price/budget (which was probably what I would have charged for a shoot and edit, anyway) and got the job.
Because it was all a bit of a rush to get the quote to them (the job was in two days) we didn't discuss the details any further. All I knew was that it was a shoot to record some presentations. For a basic shoot and edit, the money we were getting was adequate, but nothing special. I was keeping my eye on the bigger picture, here. The potential for this work to expand into the Mother company's many other divisions was obvious.
Anyway, after the shoot I requested copies of the presenters' Power Point presentations so the slides could be used in the edit, as I was unable to shoot both the screen and the presenters at the event. I got the presentations along with instructions on how they wanted it put together.
"We will need each of the presentations as separate files so we can upload to the intranet and as well as that we will require a 5 minute edit of the evening as an overall record of the event".
Wow. So now instead of just editing the night into one long video and putting it onto DVD, we had to edit the vision into 6 separate videos and compress each ready for the web. This would undoubtedly take more time than anticipated when quoting, and it did. One more day at this point.
However, keeping the big picture in the back of my mind, I took it on the chin and supplied the videos quickly, keeping it within the week's turnaround as promised. I FTP'd all the files and heard nothing back.
Just before close of business today I sent an email to get confirmation all the files had been received. I got an email back:
"Yes, David, thank you, we received all of the files. They all look really good, but there are going to have to be some changes. I will outline them all over the weekend and send them to you on Monday."
Wow. Now there are going to have to be some changes that are obviously going to take some time to outline. Looks like a major re-edit coming on. I might be being paranoid here, but I feel we have been ripped off. Budget immediately blown.
Ok, so it might be our fault in not getting the detail of what they required, but our instructions from them were simple and we did as we were instructed. Six videos compressed and ready for upload, delivered quickly.
Actually I don't really know what we can "change"...it was the filming of a presentation night with one camera - nothing special as far as production was concerned.
So what do we do? Do we stand our ground and say something like "we are happy to make the changes but we originally quoted only for the shoot and a basic edit and at this stage we have exhausted that time allocated"? Or, remembering this company has potential (VERY big potential), do we cop it all on the chin, learn from our mistake and not let the lack of detail from the client get us into trouble again?
Surely they can't think they can just keep adding time onto a job with a fixed quote amount...but I guess they see it as not getting what they wanted - even though they didn't tell us EXACTLY what they wanted..
Any advice on how to handle this age-old problem?
It all goes back to your contract and what the stated deliverables are. If they are going outside the scope of the contract, then you notify them of this and what the additional charges are. If there is no set contract or no specific language on what your deliverables are, then you're basically screwed and have to deliver what they are asking for.
One big problem I see in all of this. You lowered your price for a division in the same company that you do work for already. Anyone else that requests work is going to want those same prices because everyone will know what this new person paid for. Never, ever lower your prices for different divisions in the same company.
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Walter, some good advice there, thank you. I didn't think of the possible repercussions until after it was done and this was a real "doh" moment, if ever there was one. But it was done quite innocently as I felt we weren't going to get the work unless we worked in with the budget. And, honestly, the way the job was originally outlined, the money we were getting was adequate.
The real problem here, I guess, is that there is no official "agreement" as to what they get for the money.
I am not convinced this has painted us into a corner as far as charging the company in the future goes, however, because as far as future quotes go, if anyone brings up this cheaper price, we will explain that it should have been for a basic shoot and edit only.
The question is now, though: should I approach the contact and let him know that we agreed to fit in with their budget because the outline was a straight-forward shoot and edit, or will this make us look unprofessional enough for them not to use us again?
No matter what you do, be sure your final invoice has a line item with the description, "Discount courtesy of (insert company name here because it is not in COW profile)" with the price/money lost on the project. QuickBooks and Peachtree, as well as most other invoicing/accounting software, has a "Discount" item/inventory part.
When you email or mail the invoice, write a little note saying something like, "Glad to help out with your budget for this first project." I would stick to pricing the next time.
Bennett Marketing & Media Production, LLC
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Thanks Bruce. Good idea.
In regards to quoting, I would be interested in what methods other production companies use to quote.
To me, it has been one of the most difficult things for the company to master.
Most clients I have dealt with have never been able to detail the job enough to give a firm/correct quote...and all we have really done is gone off previous jobs as a guide.
Are there certain software packages you can use to quote (specifically for video production) and are there generic contracts/forms that you can forward to the client for them to fill out so you know exactly what they want out of a job and if there is an argument later, you can refer to their request?
Thanks so much,
1. Know how much you need to earn to fill your three buckets: overhead, costs of goods and profit.
2. Know your client. Some clients want a project price and the end product, others want a detailed hour by hour summary of what you will do and then a report at the end of what you actually did, and either a pro-rated final invoice or a refund.
This can also apply to how you write your itemized list of deliverables, and is impacted by how you run your business. For example, do you write:
Video shoot, 2 cameras, 2 guys, lighting, audio: $1500
Video Shoot, 2 cameras: $500
2 camera operators: $500
If you are a day-to-day work for hire outfit, like a owner-operator of a production kit, then you may use the 2nd option.
If you charge by the project, you probably use option 1, and your client could probably give a hoot about what the video shoot charge contains on an itemized basis. But they might. Know your client.
3. Knowing what you know about every type of project, either from past experience or from your gut, build in enough hours to cover the work. Anticipate the unanticipated extra work. There is almost always unanticipated work. As described in many past threads, corporate clients are flying by the seat of their pants, and may not consider last minute changes to be a big deal. Build this contingency into your price, so it is not a big deal for you either.
4. Charge a project management fee. This covers your time doing things that are not editing, shooting or rendering. For example, scheduling, travel time (not travel costs, those are billed at cost), quality control, burning discs or backing up files. This can also cover you for overages. Take a fair percentage of the total estimated charges and add that to the final total.
In summary - don't be surprised if there are surprises. What sounds simple to you, and simple to them, may turn out to be slightly less than simple: aka "simple-plus." Assume that simple will be simple-plus, so when it happens it is not a shock, and you can focus on the job.
Of course following these suggestions may reduce the traffic on this forum!
in addition to my above post - you may quote differently for different line items:
Editing - 1st edit through final $1000
(up to 40 hours)
1st edit - 10 hours @ $25/hr = $250
2nd edit - 10 hours @ $25/hr = $250
Final Edit - 20 hours @ $25/hr = $500
If you do option 1, just one price for editing, make sure it is a number you can live with if things go to 10 edit versions.
You may, or may not, want to include a clause saying "editing time beyond X hours will be billed at $25/hr in the final invoice"
A client may want this clause modified to add "Vendor certifies that total cost will not exceed X% of the total estimated charges."
Know your client, know thyself. Find a way to keep both parties satisfied both with the work and with the cost, and avoid emergencies, by anticipating emergencies, so that they are non-mergencies.
I seem to be filling a niche where large corporates want to do "throw-away" videos for their intranets but do not want to pay advertising-agency-related rates, yet still want an acceptable job. A lot of the time, the client cannot be bothered with the complexities of advertising agency protocols for the most simplest of videos - videos that might have an expiry date one week or one month after their production - so they use me to produce something well, but cheaply...the option is not to get them done at all.
So, what this means is - they come to me with a budget: "this is all we want to pay for this job" and you either do it or quote so high that they choose not to do it...and risk losing future work.
The way this client organises things, there is NO WAY they would be able to look over agreements (or want to, for that matter) for such simple, throw-away videos. If it became complex, they just wouldn't do it.
I have heard they use me because I make things simple for them and do a good job that suits their needs. I just get the job done without a fuss and don't charge the earth.
Just gotta make sure I don't get cornered in the future...
Have learned a valuable lesson here this week.
[David See] "So, what this means is - they come to me with a budget: "this is all we want to pay for this job" and you either do it or quote so high that they choose not to do it...and risk losing future work."
You establish your rates based on what YOU need to make in order to stay in business. Even though you say your competitor is charging "too much" they are probably estimating based on this principle. If your fairly estimated price is seen as too high by the client, yes, you risk losing future work. If you play the game "How much money do you got and I'll do it for that" you won't be in businesses very long or you will be working 24x7 in order to stay in business.
Bennett Marketing & Media Production, LLC
Documentaries for those who love to create … and to be inspired.
For the past 17 years, I have used Microsoft Excel to estimate projects. One page for actual estimated hours, units, markups and costs. The second page with "summed line items" for the client submitted as a PDF (i.e., Page 1 = 32 hours of post at $100/hr. and Page 2 = Post Production, 1ea., $3,200.00).
Bennett Marketing & Media Production, LLC
Documentaries for those who love to create … and to be inspired.
Since a lot of folks read this forum who are, perhaps, just starting out in business, often for themselves as sole proprietor, I think this point is one to focus on again.
Remember that you need to earn a living, not just get by. X dollars for a quick project may seem like a good idea, but make sure you are actually getting something out of it, not just breaking even. If you do a lot of work like this, you may do ok at the end of the year, but break even sometimes or lose money other times. If this works out for you, and you hopefully are looking at the future on a regular basis, you might be ok. But if you make a habit out of losing your shirt, you are going to be walking around without a shirt a lot.
For every unit of money you earn, divide by 3.
.33 goes towards your bank account (profit)
.33 goes to your cost of doing business, which for a one-man or one-woman shop is basically your salary
.33 goes to overhead, which is rent, utilities, phone, website, blank tapes etc.
If you are in business for yourself, you should be tracking all your expenses in Excel, Quickbooks or whatever, so you know what your salary, your Overhead are and your profit is whatever is left over. So it may not be .33/.33/.33, but whatever proportions you follow, make sure these are accounted for in how you charge.
My dad always used to say, "Pay yourself first." Actually he still says that.
Yes, good advice.
When times are tough like they are currently for freelance video producers here in Australia...what do you do?
Do you take some work and at least get SOME money (at least some cash-flow), or do you quote what you would reasonably like to get/should get and not get the work?
As I said, the job would have been fine if there were no further edits. The problem has been caused by not getting the client's requirements before the quote was formalised and, in hindsight, it appears the client didn't even know what they wanted until after the shoot and they saw what went on.
That said, after the shoot, they had asked me for 6 separate videos from the event (without detailed instructions for each - just one video of each of the 6 presenters/speakers that were there) and so I did what they asked: produced 6 videos and supplied them to the client. Now they have had a look at them, they are taking the weekend to work out what they want changed.
I think they are just totally oblivious to the amount of work it will take to make changes. Then again, perhaps they don't care.
This is grinding. Subtle, but grinding nevertheless. They say the Devil cannot hurt or control an innocent person unless and until the victim actually invites him in. That's kind of what you did by being too eager to close the deal without more details on paper.
Another concept in addition to all the good advice so far is, you can always cut them a discount or rebate after billing them a large but safer amount, if the job turns out easier than you budgeted for. Imagine how they would feel to get a small refund check and and note that says" We found a more efficient way to execute the edit and saved some time over what we had estimated on this job, so here is a rebate to reflect passing on the cost savings to you. On future jobs with you we'll apply our new more efficient approach to help keep your costs lower as well." Rebate for over-estimate, or applied to the next project as a discount or "added value" package. Spinning it positive.
Sounds a lot better than "I know I promised you the moon and stars for a firm twenty bucks, but it turns out I was overconfident, did not know the whole score, and underestimated the job; can I have some more of your money now to make up the shortage?"
As far as the competitor you underbid, maybe they were not as stupid as we thought. Freelancers often get a bad rap for charging large amounts for comparatively small jobs, but often what's not considered is all the overhead they also have to pay for, if they plan to do better than break-even. And some clients, once you know thenm you build in a certain "inconvenience charge" into your billing to account and budget for predicted fickle behavior and other things they do that drag out or slow down or otherwise complicate a project.
And you have to manage expecations by always giving a caveat or proviso on any kind of estimate. In this case, you should have said how many, if any, re-edits were considered part of the offer, and how much additional editing/revisions would cost.
Specific to this current problem:
My take is, you did all that was asked of you up to this point, with little guidance. Now they want additional work done. If you bought a suit, how many times would you expect free alterations from the tailor until he told you to get stuffed? Once? Twice, maybe, if they just didn't get it right the first try, or you'd bought a LOT of stuff. But three times? No. They would charge you for keeping pace with your ever-changing waistline.
You are willing to do more editing on their stuff, but IMO it must be billed and signed off as a separate project. If I really had some stones, I'd also ask for the shoot and first edit to be all paid up before going on to DO the re-edit. A grinder will try to keep the issue of unfinished business as a shield between himself and paying you for work done up to this date. Don't allow them to run a tab.
The whole thing is a clusterflop, because there were too many unknowns on the first job, not enough details on paper before you did it. They kind of have you by the short hairs on this now. The only wiggle room you may have is to stretch out the delivery date on any further work, because it was not put on the calendar, and you have other, paying clients in process already.
Worse, members of sub-divisions of a larger organizations talk all the time between each other. This case is going to leak back to your other "mother-lode" client. Keep that in mind as you defuse this unexploded bomb. They are watching how you handle this, or if you're going to BE handled.
David, I don't do a lot of content/production, as that is not my main focus of business, but I have a handful of clients I do little things for.
I had a client that I was working with this week that I edited a short (9min) piece. They shot it and gave me a rough EDL with ins/outs and I was just doing the cut with some titles, music, a few effects and a tad bit of color correction. I spent about 5 hours on it by the time it was said and done. He approved it and then I encoded it for his website.
After he put it on his website he called and asked if I could "just throw a title on the beginning of it real quick." To do that would have been another 45 minutes of work plus a few hours of encoding time, but he didn't know that. He thought it was just as simple as typing in the title, so I took a few minutes to explain why it took more time and work than that. He totally understood and I suggested just typing the title on the website under the video. He was more than happy with that solution.
A little client education can go a long ways sometimes and now he will understand why things cost what they do (especially change orders) on the next project we do together.
Mark and Matt, all good info, thanks.
The fact is they called and asked me to record a presentation evening for their records. When I quoted them, they said "we don't have that much in the budget, but we can afford $XXXX"
The real issue is that they didn't really tell me all what they required for this production until after the shoot was completed. The whole production was presented as a basic shoot for their records. Perhaps I missed the boat at the appropriate time and should have said then...after finding out they wanted 6 separate videos from the night "hang on, that's not what we were of the understanding that we were quoting on", and they would have to realise they didn't help us out in the information department.
But I went ahead with the edit of the 6 videos anyway, knowing we could cop it on the chin as long as it went no further. And we were thinking it would go no further as we followed those instructions.
The fact is the brief was simple: "could you come and shoot a presentation evening we have this Friday". Sounded pretty simple. I made the mistake of assuming they wanted a basic shoot and edit perhaps to DVD for their records. It's what it sounded like in the beginning. They gave us no reason to believe otherwise.
But I have actually provided what they wanted now and I just do not understand what could be changed, anyway, as it was such a simple production - shoot to record a function for their records. It wasn't like we were shooting something with a million variables (like a TVC) and being left to my own devices to produce it....
Whose fault is this? The client because they didn't really provide enough information on the production in the first place, or ours because we didn't ask enough questions?
I will wait to see what changes they are requesting (as I said I am not really sure WHAT they could want changed) and then consider my response. Perhaps I am being paranoid and they will come back with minor changes.
I see my real problem now is that I have to find a diplomatic way of saying "We weren't advised of and, therefore, didn't quote on this type of production and the time allocated for the job as discussed initially has been exhausted...these extra edits are going to cost more" without upsetting the apple cart.
Damned if I do (creating a sense of conflict on our first experience with them) and damned if I don't (making a rod for our backs with not being able to charge more to the other divisions in the future".
My only saving grace might be that when I go to quote again I will have the opportunity to defend my quote on this job by saying "yes, but it started out as one thing, and ended up being another".
Any minor changes will require re-rendering of the videos which takes up to an hour each, which could, with all the fiddling required, mean a re-edit of each video might take up another 12 hours of work.
[David See] "Whose fault is this? The client because they didn't really provide enough information on the production in the first place, or ours because we didn't ask enough questions?"
Yours. If the initial job was a shoot, you should have drawn the line before the editing began. Once you get on a slippery slope, it's hard to stop sliding.
(It's not the client's fault - HIS client is his own company. The client gets to be a hero inside the company, because he found a
great, inexpensive supplier, and every time he grinds you a little more, that's just another sign that he's doing his job. He isn't loyal to his vendors, as your predecessor found out.)
Solution? If you're too desperate, and feel as if you need to hold onto this client at any cost, there is none. But the only way you'll be treated with respect is to show self-respect. I just fell into a similar situation, and as soon as I got the picture, I called the client and said, "Whoa! This is more than we discussed. We need to talk about this." That worked.
Good luck. And the point about your reputation within the company is key: you have to be polite, but you have to be firm, or you'll either lose the whole account, or the whole account won't be worth having.
Hey Bob, thanks for the insight.
The original job was to cover the event - and the obvious outcome would have been to edit that into something they could utilise. I was expecting a DVD, but the separate files for their intranet was acceptable. JUST.
I guess I have to wait to receive the list o changes before jumping to any conclusions. As I said, I am bewildered at what they can have changed, because the whole shoot/production was so straight-forward. Just like recording an event for prosperity.
I guess the only thing they can change is the presentation of each clip such as titles/music/branding etc. But this will still equate to edit and one-hour render for each of the 6 clips.
I think at this point, the time to say "Whoa, this is more than we discussed" will be if he comes back with an unreasonable list of required changes. This will also save face with the others I have worked with in this company already and charged more for their jobs. FOr them, I will have to be ready to answer their questions as to why their jobs cost more, too!
What I have learned here is to not be fooled by "We need this done quickly, so we don't have time to formalise quotes" and clearly state what they will get for the money I have agreed to and any more work will cost more money.
Cheers and thanks for taking the time to respond, Bob.
"We don't have that in our budget..." Well then, they can't expect all that much, can they? That comment really ticks me off. And leads me to want to e-mail people this video...
GETTING ORGANIZED WITH FINAL CUT PRO DVD...don't miss it.
Read my blog, Little Frog in High Def
I think I was a little too laid-back in this situation because of the ease of dealing with the other department previously. That department has never asked me to quote and has never questioned my invoices. Mind you, I know I am much cheaper than those they were using before.
I was also probably taken for a ride believing that all they had to spend was what they said. I should have, at that point, stuck to my original quote and stipulated what they got for that amount, because I know I am SO much cheaper than others they have used.
Yep, I blew it. Never again, however. Now all I have to do is work out how I can avoid being taken further down the track of being ripped off on this little ride I am being taken on.
Again, I will have to wait for their requested changes before I can make judgement. "Some changes" might meant two, it might mean 30. Let's wait and see.
I mean, it might all be horribly innocent...the client perhaps could just believe any changes take very little time....
Then again, maybe not.
[David See] "Again, I will have to wait for their requested changes before I can make judgement. "Some changes" might meant two, it might mean 30"
NO! You believe that you have already given away a day of your time. The time to draw the line is NOW. You should charge extra for ANY change. Think of it as "Client Education." They simply don't understand about rendering, etc., unless you tell them. And they won't CARE about rendering, until you tell them what it costs them. Costs THEM, not you.
They - don't - care - about - you. That's YOUR job.
All good points, thank you.
When you bid a project, you simply make way for revisions. This does not include added product but it almost always includes revisions. As long as you ramp up your bid to allow for these, you'll be all good. This is simply a growing pain. Make em happy and bif higher next time.
[grinner hester] "you simply make way for revisions. This does not include added product but it almost always includes revisions. As long as you ramp up your bid to allow for these, you'll be all good."
Yeah, but who hasn't seen the client who keeps making little tweaks, especially if he perceives that they're all "free" to him? It's a good idea to include a reasonable number of hours for revisions, but vital to set a limit on the time allocated to them.
I guess it depends on the client. I've never had this problem. I try to set these kinds of gigs up so that I'm working alone. When that is the case, I can always get something done in half the time budgeted for as I dodn't have to sit, discuss, oppease and explain every edit. I can simply make the show and rock on. Should they wanna swap a shot, I have plenty of time fluffed for that. Should I ever feel they are venturing into an exploitation phase, I diplomaticly explain it's time to wrap it up. I'll have em sit over my shoulder and make calls than make a final dub if I have to but my days of getting upside down on gigs are over.
That said... my flat rates are what get me lots of gigs. They are a great deal-sealer. If I threw out restrictions to that, I may as well just state an hourly rate and let em pass.
I have been EXACTLY where you are now many times and here's what I now do for self preservation: At the end of the initial conversation, usually on the phone, I'll say, "Could you please shoot me an email as to what you're needing exactly so I can respond tonight?" In this manner I have made them commit to clarifying what they need since we seldom have time for Letters of Agreement, etc. If they don't send their email I send one listing my understanding of what they want.
I make sure I know what their deliverable is and if they want a Flash file I know to add an aggravation fee because I often become a ping pong ball for their IT dept or web people. Anything time consuming, like graphics, are a red flag to me and I will get more clarification before committing to a price.
I try to discern how many layers of approval there are, if more than one I add another aggravation fee figuring there's GOT to be revisions with more cooks in the kitchen.
Grinner quotes a flat rate, I believe in giving a range, in this way they get the inkling we are in a FLUID situation: Want more? Costs more. I never quote hourly because they usually want to know what the total cost may be. Besides, when I hire vendors there's no way to tell if they are fast or slow, so I require a range.
Some respondents mentioned "contract". That's crazy with big companies: They're too big to sue, I'm too small to be sued. The legal fees would eat it up anyway. Often they have to send my contract to their legal people before signing and they mark it up in a way I can't understand and thus need to send it to my attorney, so screw it, if I can't trust you I don't produce for you. I have generic Letters of Agreement that if push comes to shove I would show to their boss if needed, and if they're a problem their boss's boss's boss. I have experienced my main contact being transfered, quitting, fired and yes, one even died, so my email trail is very beneficial.
Lastly, and perhaps this should be the name of this forum, we all must remember this: YOU CAN NEVER WIN AN ARGUMENT WITH A CLIENT, even when they're wrong they're right.
[Ned Miller] "Lastly, and perhaps this should be the name of this forum, we all must remember this: YOU CAN NEVER WIN AN ARGUMENT WITH A CLIENT, even when they're wrong they're right."
Boy, this is my day for disagreeing, I guess.
The next column that I wrote for the September/October issue of Creative COW Magazine addresses this very topic -- and it is one on which I most emphatically disagree.
At WalMart or at Nordstroms, the customer is always right. In a service business such as ours wherein you and the client interact for days, weeks, or sometimes even months on a project -- as opposed to the mere minutes of a retail transaction -- the customer is not always right. My customers know that I never claim to be infallible. When they claim that, it is my moral obligation to bring them to a balanced understanding wherein we can forge a respectable and honorable relationship. When someone insists they are right when they know in their heart of hearts that they are being a bully and are full of crap, I walk 'em.
I once handed a guy all his tapes and his artwork and told him to get lost. He asked for my work. I told him he was getting no bill and so he was entitled to none of my work. Period. He knew I meant it.
Ultimate Takeaway Close, kids.
Guess who lost?
They wanted their stuff and did not want to start from zero again. They calmed down and admitted their stress got the best of them. We never had to have that conversation again.
My new column will be out in a few weeks. It is an expansion on the thoughts that I began in Clients or Grinders: The Choice Is Yours.
If you believe that the customer is always right, you may as well paint a bulls-eye on your forehead if you work in a service trade like ours.
If you demand respect, you will get it. If you command respect, you better give it. But if you are going to roll-over every time that a client pushes you around, then you may as well make up your mind now that you need to get your named changed on your driver's license...to Patsy.
In closing, in principle you are right, Ned. But in healthy relationships there is a balanced give and take. If one person is doing all the giving while one does all the taking, that never ends well. Real clients understand this and are pragmatists and realists. The "bully spirits" are not worth the bother, and remember that they respect a take-away close better than any other tactic that I know, at least in my experience.
Preach on, brother Ron!
The way I see it, if my clients didn't want my input, they'd learn what the buttons do.
[grinner hester] "Preach on, brother Ron!"
I'd be cautious about this. It's great for people in a position of strength or economic security, who feel they can afford to lose a particular client. It may even be good advice for people in a more tenuous position. As Ron related, sometimes standing up to a client is the best way to keep them, and on good terms.
But I'd like to extend my sympathy to those who are not in such a strong position, and I would totally understand -- as a temporary measure -- being a bit more accommodating.
[Bob Cole] "I'd be cautious about this. It's great for people in a position of strength or economic security, who feel they can afford to lose a particular client. It may even be good advice for people in a more tenuous position. As Ron related, sometimes standing up to a client is the best way to keep them, and on good terms."
I couldn't agree more, Bob.
One thing you have to remember when using a take-away close, is that you HAVE to be willing to lose the client -- and never go back and bother them again.
If after you use a close like this and lose, and you try to go back and with hat in hand try to woo them again, you will have absolutely no credibility nor power whatsoever.
But to illustrate things even clearer, Bob: I have used this technique when I have had very few accounts and the gamble would have hurt something horrible if I had lost.
The reality was that keeping the client when they had absolutely all control would have also hurt our business.
The sad part is that some people keep working with what I call Toxic Clients even when it is counter-productive and isn't even profitable.
I have to be honest, when you don't expect and demand respect (by being sure to give it to those clients just as liberally), you won't get it in many cases. I have companies that I work with today who would have walked all over me had I refused to let them. And as I said, I did this when I had almost no accounts to speak of.
You will build the kind of company that you want and it starts with the first clients in, not with the excess that you have.
Lastly, I am NOT saying that you walk every client that is a pain in the patootey or who cops an attitude with you. Life happens and you have to get used to it. If you are waiting for fair, it ain't likely to happen anytime soon.
What I am talking about are the ones who make it their life's work to keep you from making a profit while they disrespect most all that you do.
Some can be saved, and in my experience most of them can. But the ones that don't receive the wake-up call of a take-away close, are well worth losing...
...even when money's tight.
And I have been broke many a time, believe you me.
Having been in the same position myself many years ago I can only recommend what we did; complete this job at the agreed rate but in a meeting post the job a) accept responsibility for not making sure the contract was fully understood - as we/you had with the original client - and b) show them what the job should have cost and why.
You may lose the second client who sounds as if they either have no idea how to budget for the work they want or are going to try and screw every supplier in turn, but at least you'll keep the original one.
The problem I have seen with clients like yours is that want Champagne on a Beer budget. And if you give them this in hopes of more work will come down the pike, you'll lose all around. I've talked to many business owners and freelancers as well as my own experience that people looking for "deals" always play that "more work in the future card."
Future work is not paying the bills now. And who knows if it will ever really come? Ideas change, budgets change, etc.
I'll give you an example that just happened to me.
I met a guy through an event I was doing and he wanted help re-designing his business's website. He gave me the spiel about how he wants to add all these new sections in the future. And that "I" should keep those "future" projects in mind when creating my "proposal." And also, he wanted to act now! Start right away.
So I kept it in mind, and gave him a deal. 2 weeks went by and nothing. So i called him and we chatted. Guess what he said? "I only want to pay half of your estimate." I'm like what?? And did I mention that he is in a similar field "wedding photography, videography." So, wouldn't "he" know how much time and effort goes into our creativity? What's he billing his clients, I thought.
So, I ended up halving the estimate and throwing away some features. We revised it to a simpler design but he wanted certain features like a photo portfolio, and video portfolio. Months went by and nothing. Even with this new estimate he was willing to pay.
We had still been in contact because we were doing another event together in the coming months but I never mentioned our business deal. I figured I'd let him bring it up.
Well, 2 weeks before our final event (when I am at my busiest) he calls and says he wants to get the website started now! And was adamant about it. But, now he "doesn't want" a website re-design, he only wants the "add-on features." What a scam I thought! He already tried to widdle me down. Then wanted the discount price of the add-ons I reduced because he was getting a full website. And now he just wants to buy the "add-ons" for the discount price! Scam, scam, scam.....
So you know what I did.....I told him I couldn't start the project until after our mutual event. And after the event he hound me by emails and phone calls to get a new proposal.
How did it end? I simply emailed him and told him I got another project that will take up a majority of my next few months. And found another local company and told him to contact them for help. In my hopes that he will see how he "lost a good deal" and see how much "real work" costs and/or let someone else deal with that headache!
Sometimes you have to walk away from money. Its hard but you do.
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