Ok, ill keep this in a nutshell.
I have a pretty large client that hired me to build them a company website, i built it at a major discount…no problems and they have been happy with the work. There was a contract in place for that.
Since its been completed they have asked for additions, edits and what not. Ive been doing them at an hourly rate not under any sort of a contract. They were giving me their changes and such via email, i do them and send off their invoice. I do usually get my payment from them within a week or so.
I do this for a handful other clients as well and a few of them have been regularly late with payments. That said, ive adopted a policy where im now asking for a retainer to do any regular, time sensitive edits on websites etc. If someone needs an edit or change NOW to make them more money…why should i have to wait to be paid for it?
Im asking from the client described at the top a small retainer, 10 hours worth of ‘payment’. This is peanuts, they pull in about 5 million a year in revenue…as from the owners mouth. Anyways, my client has told me that he feels ‘OFFENDED’ that i asked him for a retainer and how in 35 years of business nobodys ever asked him for a retainer (lawyers accountants etc). Here is the email cut and pasted. He had also agreed to my retainer in a previous email.
“Good morning Joe; After careful consideration of your request for a retainer, I found myself slightly offended. I have been in business well over 35 years and no one has ever ask me for a retainer. That includes my Lawyers, accounts and so forth. We exceed well over 3 million dollars a year in gross revenue and have some vendors we pay well over $100,000.00 a month. And I might also say we pay on time every time. So for you to be worried about your tiny bills you send us and full well you know you are paid ASAP everytime. I feel this is more than sufficient.”
Should i just tell this client goodbye? Hes been quite rude.
Funny, soon as i post this i get an email from the guy asking to send my contract back over to him.
I responded with a ‘I would like to do this in person’.
Why would you ask this from them if they always pay perfectly on time? I can see for the other clients [that don’t always pay on time], but for this one I find it a bit of an odd move.
I want it from everybody, both payers on time and non payers on time now and in the future. Its been no problem for anyone except the one with the most cashflow. Im not a fan of doing 1 hour of work twice a week, having to prepare the invoices, travel to the post office to send it out, wait, travel to post office to pick up the small check and travel to bank to deposit it. And for them…its time sensitive work that needs to be done NOW so they can make more money.
I left out the part here where i dropped $15 dollars an hour to change over to a retainer payment system.
Ive learned that playing favorites when it comes to income is not wise…
Did you also explain the client all that? Now that you explain all your traveling time etc it makes all the sense in the world. From your post I just gathered ‘I want them to pay on time’ and nothing more. I would be offended from that too if I were your client, but that post you just made is very reasonable and I would have no problem with it if I were your client.
As mentioned, it seems this is more of a misunderstanding and perhaps bad wording when presenting this for the client from your side.
Having your customers on a monthly retainer is quite normal, some even have the customers setup for a own retainer just for server/website down etc emergencies. I.e. they can only use said hours for that, and not for text updates or new features.
From the customer side, being on a monthly retainer would have specific benefits, as increased response time, hours to use on X, and so on. Basically anything that can be an advantage for your clients can be listed here.
In your specific case, I do not feel that your client was specifically rude. At least not from the part of his response that you posted here.
My suggestion to you, would be to disregard your emotions and when you meet with the client to apologize for the misunderstanding and that you did not mean to imply that he/they were bad payers. Then explain that this is a new company rule/structure and you are implementing this for all of your customers.
If you do this, I am certain that your client will feel better about this and that he will no longer feel offended. Even if you feel this is the wrong thing to do, do it anyway. In the long run it will benefit you to put your personal emotions aside and consider what will benefit the company.
No matter how much a client drives you crazy, you never show this when talking with said client. If it becomes too bad you will just politely reject their project and point them in the direction of another developer.
I totally agree with Red Devil and I think the problem may have stemmed from your presentation. From your post, it looks like you suggested a retainer from your point of view and not your client’s.
If he is doing as much business as you say he is, it probably is a PITA for him to write several tiny checks when he could opt to write just one per month. If you show him how a retainer can benefit both of you, then he will probably come around to your way of thinking.
I have a long-term client on monthly retainer as well. I guarantee him a certain number of hours of work per month on spec and on time. Like you, I have also offered him a discount for this monthly income. I invoice monthly and he knows that any work over the guarantee is billed at my regular hourly rate.
My benefit is that I have a steady monthly cash flow. His benefits are that he can count on service when he needs it at a discounted rate. I also indicated in my retainer proposal that a retainer for long-term work is just part of my policy to treat all clients the same – rich or poor, on-time payers and late payers (although not in those words!).
He thinks this retainer thing is the best thing since sliced bread and I am a hero (heroine?) instead of a villain. If you present it right, you can be a hero, too!
Not all clients want to be put on retainer, no matter how you sell it - however it is worth presenting them with that option to see how they feel about it. In the case of your client, he’s always paid on time so you know he’s trustworthy - I really cannot believe you want to drop this client, as I think his response was quite reasonable. It is your response that seems a bit too emotional IMO.
Whenever you get a client making big money, you should be as flexible as possible, especially when they always tend to pay you within a week - most big clients tend to be the worse payers, sometimes holding back payment for 2 or 3 months and requiring constant chasing up, so to get a big client like this who pays quickly, is gold dust.
If the client isn’t interested in a retainer it sounds like you should perhaps adjust your working methods a little. You shouldn’t be sending invoices for every little update you do - instead, let it build up to a threshold amount - say £250, then invoice. Obviously only for clients you trust to pay up - like this client.
Im not a fan of doing 1 hour of work twice a week, having to prepare the invoices, travel to the post office to send it out, wait, travel to post office to pick up the small check and travel to bank to deposit it
Why are you dealing with post and cheques in this day and age? Send the client a pdf invoice via email and tell them to pay you via bank transfer. I’m sure they’d prefer this as well.
Ive learned that playing favorites when it comes to income is not wise…
That sends terribly inflexible - I assume you’ve been burnt on something in the past, but my experience is the opposite. I am quite happy to play favourites with a client who sends me lots of work and pays on time (30 days is normal BTW, so a week is fantastic) - that’s really the best way to build a business. You don’t penalise good clients just because you want to keep the bad clients in check - instead, drop the bad clients so you can spend more time working with the good ones and making even more money from them
I really don’t think this client will take too kindly to you lumping him in with your client-wide plan - it sounds like he, quite reasonably, feels he’s a more special client and as such requires unique treatment.
The better the relationship you build with this client, the more work they will send you and the more people they will refer to you.