We are getting the impression that a client we have been bending over backwards to please is thinking of leaving us-they aren't very profitable, but have the potential to become a very regular and steady job. We've been doing a lot of work for free/reduced rates to help with pitches they have to make for some very large projects, and I worry that this has contributed to a mutual lack of respect. Are there any wiser heads out there who have any insight on whether its worth trying to save a client you think may be leaving, or is it best to focus your energy on your other, better paying and less demanding ones?
Let's see.... they aren't very profitable, you're bending over backwards for them... even doing FREE work. Hmmmmm....
I guess it all depends on what you actually think that "regular and steady" work could be. If it could turn into a real cash cow, then it might be worth sticking in there. BUT... keep in mind that you've already set the bar... they already know they can apparently say "jump" and the response is "how high?"... and they already know you're willing to work for reduced rates or even free. That doesn't sound like a client who is going to be too happy when you stop that extreme backwards-bending, or actually send them a regular-rate invoice. My opinion is that they are seriously taking advantage of you, and letting them go would be no loss. You'll have to weigh the unknown financial possibilities yourself, though.
Through the years we've lost a few clients, like any business has. With only maybe one or two exceptions, though, I don't think we've ever really lost any that I wasn't actually happy to see go. Some of them that left actually did so only because they beat us to the punch and got out before we got around to firing them.
I think that this is potentially one of those cases... where losing is actually winning.
Fantastic Plastic Entertainment, Inc.
Precisely what I wanted to hear Todd. Thank you.
I think I have known it all along-even though they have paid invoices, they have been for relatively small amounts and we have kept cramming work in because....well, I'm not sure now, other than the nice feeling of being insanely busy.
You have an excellent opportunity to turn lemons into lemonade. Anytime you have a fundamental disagreement with a longterm customer, or with anyone with whom you have a longterm relationship, if you can leave pride and ego out of the equation, you might be able to restructure your deal with that entity if you try. It doesn't always work, but the alternative is always going to be lemons, and never lemonade.
David Roth Weiss
Sales | Integration | Support
David is a Creative COW contributing editor and a forum host of the Apple Final Cut Pro forum.
People are funny in how they value things. Do a job for free, and they don't think much of it.
Do the SAME job, billed at full rate, they think the work is marvelous, they show it off.
Do the same job, bill full rate, then tell them you're giving them a 100 percent discount, and they will treat that project like it was a recording of Jesus Himself.
I think part of the distinction is that in two of those cases, you are dictating the terms; you are in control of the rate and how or when it is applied. The client feels they got exceptional value out of the last two examples, but may feel you're a chump they took advantage of in the first case.
Do you stick with them? It sounds like you can't afford them at the current rate of payback, so I'd agree with David that it may be time to re-negotiate. Enter that negotiation, knowing you may have to walk away or that they will finally stop stringing you along. As long as you break up on good terms, there's a fair chance they will come back if they find out you were indeed the best deal around. When they do come back, that's the clean slate you need to establish the new working relationship and terms.
To me, they sound like grinders: polite grinders, but grinders, nevertheless. Make the new terms worth the extra effort and stress these guys provide, or why do it? You could spend that energy developing another client, or on retaining and developing (up-selling) the ones you still have.
Evaluate all your clients over the past year, and fire the worst one. Spend your time finding new, profitable, clients, not dwelling on those who have proven to be of no value to your business. Being "insanely busy" is not valuable unless you are also "insanely profitable" you are better off prospecting for new work than doing unprofitable work, just to "feel busy." My $0.02