Pop Goes The Client

For the last month or so, I’ve been working with two particularly great prospects from our sales pipeline. Both potential clients are right in our target market and need substantial amounts of lucrative services, so we’ve been motivated to get them signed.

We had the usual exchange of e-mails, phone calls, and questions with both clients but in the end we signed one of the clients and decided to pass on the other. Simply put, one of the clients began to look less and less attractive as negotiations unfolded while the other proved to be easy to deal with in just about every way.

Both ‘Client A’ and ‘Client B’ both started out as strong prospects – established, substantial companies with good credit and lots of work. When we first sent out the contract, however, the differences became apparent.

Client A asked for some small and routine changes to the contract, mostly over the arbitration rules and some non-disclosure language. The changes were very reasonable so we were happy to comply. Meanwhile, Client B accepted all the terms of the contract but suddenly asked for a reduction on the hourly rate! This was a real shocker because the client had reacted positively to the exact same rate two weeks earlier. Not a good sign, and we respectfully refused the reduction.

Client A then asked us if we could assign them a dedicated QA manager out of our India group. We explained that this doesn’t fit our resource model, but Client A was persistent and we finally agreed that they would have a dedicated QA manager if, and only if, they maintained a minimum monthly spend on QA. This turned out to be a win-win for everyone, and we got on the phone to hash out any remaining points. Client A remained respectful and positive throughout, and we soon had a signed contract between our two companies.

If only Client B had such a good attitude. They became frustrated at our unwillingness to reduce the rate, despite the fact that we offered to throw in everything from hosting to more favorable payment terms. To make matters worse, our main contact at Client B suddenly handed us over to the President of the company who explained that our rate was ‘just too high’. It was quite clear that his intent was to use his executive skill to negotiate the deal, but all it really did was show me how rude and unsavvy he is. Client B was worth twice as much as Client A, but I was getting annoyed with them and we hadn’t even started working together– not a good sign.

Then came the moment when it was clear that our relationship with Client B was not to be: The President of Client B told me that he ‘might consider’ our rate if only our design work ‘popped off the page’ as much as his previous vendor. When I hear a client say that they need it to ‘pop’, I usually run for the door. Just for fun, I asked him what happened to that vendor and he said that they weren’t a good ‘fit’ anymore. I bet he’s been through a lot of vendors this year!

I respectfully explained that we probably wasn’t a ‘good fit’ either and thanked him for his time. What a relief! If there is a lesson here (besides to avoid clients who say ‘pop’) it’s that you get back what you give, and that good business is based on good, respectful relationships.

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  • http://www.realityedge.com.au mrsmiley

    So by giving Client A a dedicated QA manager, does that mean they cant oversea any QA projects for any other client of yours while the minimum spend is in effect or just if you have two projects to pick from, then they are obligated to complete Client A’s project first? How is Client A looking to enforce this with you? Unless the client is based in India and looking over their shoulder, I’d imagine it impossible for them to verify this.

    Seems a little pointless to me unless there is a dedicated QA team that comes with the QA manager, otherwise you have a chief with potentially no indians. Without you having stipulated how dedicated the development resources are, what exactly would the client hope to acheive with a dedicated testing manager that say an account/project manager wouldn’t solve?

    In terms of lessons learnt from Client B, is it possible that you might have picked the wrong contact in the organisation to deal with from the start? If they didn’t balk at the price up front, sounds like the contact might overstepped his authorisation boundaries unless that’s simply how they do business there.

  • http://diigital.com cranial-bore

    mrsmiley – I understood “dedicated” to mean that the QA manager would be in the know for all of Client A’s work; meaning Client A would only have to contact this individual to get information about their projects. I could have misinterpreted though, but I thought the idea was for Client A to have one point of contact.

    And yes, Client B do sound as though they would have been difficult to work with. Even if they had agreed to your rates the reluctance would persist through the whole relationship. I suspect if you had worked with them they would often be bringing up the high hourly rate to scheme free work and favours. Popping sounds like the words of someone who will never be satisfied with the design work.

  • DigitAlex

    For some of the non native english speaking people, could you please exactly explain what the president of the company B meant by “design popping off the page” ? Thanks !

  • ugadarnell

    I think “design popping off the page” doesn’t mean much more to native speakers than it does to a non-native speaker. It’s supposed to mean that the design is really good. But this is the kind of talk someone uses when they don’t understand what’s going on enough to give specifics as to what they want. And it’s definitely a warning sign, because at any point the client can claim you aren’t living up to your end of the bargain, because “pop” is such an ambiguous term and impossible to quantify.

    When someone uses this kind of talk, it’s best to let them know you don’t understand exactly what they want quite yet so you can get some specifics.

  • Lola_Designa

    When I first started out, I would have thought this was crazy-”Turn down work?? What?!”, but fast forward a few years and I agree with you. Some projects aren’t worth the pay. I have had situations where a client hired me for a project and I found myself half way in wishing I could just cut them off completely because of their unrealistic demands, complete wishy washiness, poor attitude or a combination of all 3. When they came back for future projects, I had to respectfully decline the job….and it felt soooo good : )

  • Sidereal

    I had a client that set off the same kind of warning bells, but I took him because business was slow. When it got to the point he wanted all the colons and semicolons to be in a different font because he didn’t think they stood out enough I gave him a full refund and told him to go away.

  • buildakicker

    That’s so true! Thanks for a great explaination.

  • http://www.eric-shmookler.com Eric Shmookler

    Agreed. Client selection is extremely important.

  • fordy

    I am so glad this kind of thing happens to everyone else and not just me.

    I have a client at the moment who is a life long friend of mine. He has changed the brief many times, which i billed for. But then the last change i did for nothing due to a few errors at our end. This was the biggest mistake i have ever made in my life and i am kicking and cursing myself hard for it. It has been a typical, “give them an inch and they’ll take a mile”. Now i am finding it hard to state where the line is. Now his boss is calling me up spouting the same kind of rubbish. I wish i could cut the project but i am too far into it.

    Choose you clients carefully, especially when you are starting out. I certainly will be from now on.

  • stevebaty

    I come across the type of behaviour displayed by Client B on a regular basis during contract negotiations with large clients/corporations. For some people, trying to push you down on pricing is simply something they have to do – it’s a power thing, or an ego thing, or a process thing – I can’t say for sure.

    I only ever agree to discounted rates under two conditions:
    i) as part of payment terms (i.e if you pay early I’ll knock 3% off the invoice total); or
    ii) in exchange for a contra deal of some description – cheaper rates on purchasing their products, or seats at sporting events etc etc negotiated as part payment of the invoice.

    But the hourly rates are always, always fixed at our normal rates. Any client who doesn’t think your standard rates are reasonable is not a client you want to have. If you desperately need the work, discount the rates in advance – but I would never agree to a rate cut as part of negotiations.

    Dave, I think you definitely did the right thing cutting them loose at the beginning, and I’d recommend anyone to do the same. Experience tells me that if a client feels like they may be painful at the start of the relationship, chances are they’re going to be painful by the bucket load once you get started working with them.