If you have a service business, you have to develop techniques for keeping your clients happy. Without clients, you're out of business.
However, bending over backward for your clients may not be the best long-term strategy for growing your business. The nicer you are to your clients, the more they are tempted to take advantage of you — by paying slowly, becoming a time vampire or demanding additional services without charge.
Here are seven essential tips for keeping your clients in line.
Make Sure Your Contracts Are Airtight. Very often, when clients take advantage of you, it's because you allowed them to do that in your contract. Your client contracts should contain as little wiggle room as possible.
Every contract with your clients should contain at least the following:
—When your fees are due and payable (you would be amazed how many otherwise good contracts are silent on this point).
—A detailed description of your services.
—A provision requiring additional fees or a new contract if the client were to request services not detailed in the contract (what we call "project creep").
—The fees you will charge.
—An upfront retainer, part of which should be nonrefundable if the client were to terminate the relationship within a short time (30 to 60 days) after the contract is signed.
—A line that says, "Interest at 12 percent per annum will accrue on past due payments."
—A clause allowing you to terminate the contract if the client were to refuse to cooperate with your (reasonable) requests for documents, commentary or feedback.
Communicate Fee Estimates in Advance. If you have given your client an upfront fee estimate and something happens that causes you to exceed the estimate, don't keep working. Call the client immediately. Let them know what happened. Give them a revised estimate. And get their approval before performing additional work. Clients hate surprises, especially in their bills.
Get the Client to Buy in to a Difficult Decision. If you are not sure what your clients want, don't guess and hit them with something they may absolutely hate. Do that and they will invariably think you are an idiot, and the relationship will be unsalvageable.
Instead, present them with several alternatives, and get them to choose the direction in which you will take the project.
When a Client Refuses to Follow Your Advice, Get It in Writing. When negotiating contracts for my clients, I frequently want to take a strong position on a point that the client isn't really worried about. Even though I explain the potentially negative consequences of taking or not taking a certain action, the client will say something like "I'm not really worried about that; the other side is pretty reasonable, and I'm sure we will be able to work something out if it becomes a problem."
Whenever this happens, I always — always — send the client a short email in which I remind him of our discussion and point out that it was his decision not to pursue the issue. I make sure the client gets it (I often ask him to respond "is this right?"), and then print it out and keep the email in a file folder.
Why? Because if the issue becomes a problem for the client, he will inevitably blame you for not pursuing the matter in negotiations.
Bill Early and Often. I can't believe there are consultants and professionals out there who will work several months on a project without billing the client only to submit a huge bill to be paid on receipt when all the work is done.
Even the most financially sound clients sometimes have problems paying a huge bill that is poorly timed (say, right before the holidays). It is much easier for a client to pay a series of small bills than one gigantic bill. Send invoices out at least once a month. Pick a day and time; turn the outside world off; and grind them out.
Send Detailed Bills. I could never send a bill to a client saying that only says the words "for professional services rendered ... $5,000." Yet I see my consulting and contractor clients doing that all the time.
Your invoices should spell out exactly what you did each day on the client's project and how much time you spent. Yes, it takes longer to prepare the invoice, but it will reduce the likelihood of pushback from the client. It will also show you where you might actually have spent more time than you should have for which the client shouldn't be billed.
When Billing, Highlight the Bad Stuff. To avoid client pushback on an invoice, bill as much time as possible on the nastiest service you provided. Whenever I bill 20 minutes for a telephone conversation with a client, the client always objects to the amount of time spent. Whenever I bill five hours for drafting a difficult and thorny contract, however, the client seldom objects.
Sometimes I even get paid in advance.
Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at www.creators.com.