Archive for the ‘Client management’ Category

Some real-life thoughts about firing customers

Firing your customers can be the most freeing and profitable decision you ever make. If you haven’t seen some of the real life comments in "Have you ever fired a client?", take a look now.

According to a comment from Bob the Builder (cute nickname, Bob):

You can usually tell at the outset who’s going to drive you crazy. You should just go with your gut. The people who seem picky and annoying are the ones who always end up being picky and annoying. I’ve been a construction consultant for a while now and it never fails.

The customer isn’t always right. Pick and choose your battles. Sometimes, it makes sense to go out of your way for a customer. In other cases, it’s a waste of time. You’re in business to make money. Remember to consider your long-term profitability.

When a client doesn’t pay

Consultants rarely get paid 100% upfront. In most cases, consultants take a small deposit, then invoice at key milestones. But what do you do if a client doesn’t pay?

Tips for managing deadbeat clients

  • Send the invoice again with a reminder. It’s possible someone lost track of it.
  • Charge interest on overdue accounts — for best results, mention that in your contract.
  • Refuse to deliver further work until you’re paid.
  • Send a demand letter, giving the client a chance to pay. Note that you’ll take further action if the invoice is not paid.
  • If the demand letter is ignored, file in small claims court. It’s inexpensive and relatively simple.

Remember that, regardless of whether they want to use your work, the client still needs to pay you.

Field report: what one consultant has learned

For all the tips on how to become a consultant, there’s nothing,quite like a story from someone who’s actually made the leap. Dan Lockton has a field report from his recent time in the trenches as a consultant in industrial design.  

In his report, he notes a key reason that many clients turn to an independent consultant, as opposed to a bigger consultancy:

Unless the client genuinely thinks you are wonderful, or are likely to come up with stunning insights or innovation which someone else wouldn’t, the reason is probably because you’re cheap, or the client thinks you’ll be cheap.

That’s often true. Clients often assume independents will charge lower consulting fees because they have lower overhead. No admin staff, fancy office equipment, corner offices or the like. However, if you aim to carve out a niche, you can push clients to hire you because they think you’re wonderful. And then you can command market prices. Still, if you haven’t niche-marketed yourself, you may see clients come to you in search of lower fees. Then again, if you’re happy with what you’re charging and the client is happy to pay, everybody’s happy.

Give clients deadlines,even when you don’t need to

Yesterday, I mentioned that keeping on task is easier when you have something to motivate you. Another trick you can use is artificial deadlines. Even when you have your month stretching out before you, put deadlines in your proposals. Tell clients when they can expect work from you. This helps in two ways. First, it ensures that you finish work by the deadline, so you can collect those precious consulting fees. Second, it makes you look a lot more professional. Would you want to drop off your clothes at the drycleaners’ if they said they had no idea when they’d be ready? Would you stand in line at the movie theatre if you had no idea when the movie would start? Would you pay money for anything without any indication of when it might arrive? Probably not. So respect your clients (and yourself) and include deadlines in your proposals.

Negotiating without turning into a jerk

Following this week’s posts on negotiating, I stumbled across a post from Tom Chandler, at the Copywriter Underground. He wrote about how to negotiate your freelance fees without turning into a jerk. (Okay, he didn’t say jerk, but I don’t want some of my more conservative readers to give up at the headline.)

Of all the points in the post, #5 is my favourite:

Never Give Up Anything Without Getting Something

If you’re not getting something out of the negotiation process, you’re just submitting to pressure. Don’t give up when you’re negotiating.

See also consulting fee negotiation.

Negotiating vs. giving up

Negotiating makes up one of the most essential skills in consulting. If you hone your negotiation skills, you may actually wind up with a more successful practice than someone who’s brilliant in their work. Consulting fee negotiation may be the most obvious (and financially rewarding) skill to pick up, but it’s far from the only thing you can negotiate.

As a consultant, you may be negotiating every time you talk to a client. Typical candidates include:

  • project deadline changes
  • scope creep
  • credit terms
  • revisions
  • project details
  • requests for information (from either side)
  • responses to phone calls and email messages
  • your availability (especially when you get calls from clients at night or on weekends and don’t want to talk)

Some of these points can be handled up front, through consulting contracts. The more you put in writing at the start, the less you’ll need to negotiate later. Of course, putting together a contract involves as lot of negotiation too. But there may be less pressure at that point.

Offending your clients

Via Daniel Miessler’s blog, I found this humorous story about how he once offended a client (link expired):

I was at a client recently who’s (sic) business is providing electricity to a local city. We were trying to figure out what caused a piece of hardware to fail and as I was going over options in my head I asked him, “Hmm…perhaps a power surge?”

Ouch. Clients don’t like to be told that their core business may have flaws. But I can see how Daniel got into that situation. I’ve put my foot in my mouth a few too many times. You see, I was always one of those “shoot from the hip” people — that’s how my old boss used to describe me. I always told it straight, although I did try to use some padding to soften what I said. When I was starting out, I thought people were paying me to tell them what was wrong and how to fix it. It took me a few years to realize that sometimes it’s better to get your clients to tell you what’s wrong and then propose a solution. Sometimes, you can make that solution address some of the problems they still don’t want to talk about!


Choosing a CRM for small business (and consultants

Choosing a CRM (customer relationship management system) for a small business can be a daunting task. Small business CRM systems can be off-the-shelf, customized, hosted or hybrid.

 Mid-market companies tend to choose hosted CRM systems so they can get best-of-breed systems at an affordable price, without the tech support headaches. But, for smaller businesses, such systems may be too expensive.

 Off-the-shelf shrinkwrapped CRM packages may be tempting. Simply install a package, set up the licenses and you’re ready to go….or so it seems. Suddenly, you and your users are faced with a new technology, no real direction and lots of different approaches to using the system. Before you know it, you may have a nightmare on your hands.

 Fearing the worst, some companies hire a technical consultant to do a custom CRM implementation. The techie takes care of all the IT details and integrates the system with existing systems and applications. This consultant may also train staff and help set up business processes. But an IT consultant may not provide a complete solution either.

 What’s really important for small businesses setting up CRMs is that they start with the end in mind. Put together a plan before you buy an application or hire a consultant. You can work with a CRM implementation consultant, if you want, but, even then, it’s helpful to have thought through the CRM process. With careful planning, you can make your CRM work – whether you do it yourself with an off-the-shelf solution, opt for a hosted solution or get a consultant to customize a package for you.

 Some questions to answer before you choose a CRM:

  • Why are you doing this? What do envision a CRM doing for you?
  • What business processes do you want your CRM to manage?
  • What contacts and relationships do you want your CRM to look after?
  • Who will provide tech support? An outsourced consultant, an in-house resource or someone else?
  • Who will use this CRM? What abilities do they have?
  • What’s your budget? Include both initial and ongoing budgets.
  • How will this CRM fit into your overall IT strategy and infrastructure?

Those are just a few questions to get you started. Choosing a CRM for small business is a multistep process. If you find it overwhelming, consider turning to a CRM consultant to help you with both the business and IT issues.

This article was originally published on Suite101 by Andrea Coutu of Become a Consultant at ConsultantJournal.com.

Turning down a job

Like anyone else, I have some flaws. And one of my biggest consulting flaws is my struggle with turning down work. Even when I’m buried in projects, I have a hard time saying no to more work.

Why it’s hard to turn down work:

  • Consultants tend to run through feast or famine work cycles. Since it’s hard to predict what your earnings will be for the rest of the year, it’s hard to say no to jobs, even when you’re flush with projects.
  • Finding new clients takes work. When you’ve gone to all that trouble to find a new client, it’s hard to turn them away.
  • Although hanging out at Starbucks in your off time is fun, it can be exhilerating to be managing several projects.
  • Money is nice. When someone calls or emails with a project that will earn me $2,000 for a few hours of work, it’s pretty darn hard to resist.

How to turn away work

  • Be polite. Don’t brush off someone who’s gone to the trouble to contact you.
  • Ask about scheduling. The client may be able to wait a week or two. I once had a client who waited three months.
  • Note the positive side of being busy. I regularly point out to prospective clients that consultants who can take them on immediately may not have much of a track record.
  • Network. I’ve built relationships with other people who can take on projects when I’m busy. And they send me work, too. One sent me work for an entire year, while she was on maternity leave.
  • Hire someone. Find someone who can take on all or part of the job. (My Consulting Fees Guide discusses this in the section on making more without raising your rates.)
  • Relax. If this client found you, it means your marketing and past performance are good.

"Turning down a job" from Become a Consultant at ConsultantJournal.com.

Featured article: managing client behavior

Ready for New Year’s Eve yet? I’m still taking a break. To help next year get off to the right start, take a look at my post on managing client behavior.

Also check out my posts on starting your own consulting business and why you should become a consultant.

"Featured article: managing client behavior" from Become a Consultant at ConsultantJournal.com.