How To Handle Clients Who Won’t Pay, Part 1

Clients Who Don't Pay Pt. 1, Bespoke Hogaboom

One thing I often say: if you’re often getting shortchanged, ghosted, or have clients perennially late in paying you: then you have something wrong with your marketing, messaging, client avatar, operations, Policies, or price point(s).

I don’t say this to shame you, because this is actually good news!

If you tighten up whatever’s leaky in that list up there – well then, clients who don’t pay will soon be a lot less of a problem.

There is literally no exception to this. It’s no good saying, “You don’t understand my industry though!” Because what I will guarantee is, in your industry there are names that are respected and businesses that are healthy (whatever their gross profits), and they’ve either lucked into or as is more likely, worked hard to figure that stuff out. They have a better pay cycle, and they’ve learned through trial and error, or through hiring a business mentor (hi!) who helped them out of being stuck.

Whether your services and/or products are high price point or low, you can tighten up your sales cycle and customer care model.

You can also (and this is just as important), change your target audience – or re-acclimate a current audience!

Think about it: I live in a town where you can buy a hoodie at Walmart for nine dollars. (I am not kidding – I just checked)! And yet half my clients are local working class: they line up on my waitlist to for a custom hoodie at a price point thirty times higher!

Of course, my hoodies are nothing like Walmart’s. 

But in a sense, they are!

They’re BOTH hoodies. So why can mine fetch such a high price?

How did I ever acclimate the local audience to accepting such a massive price jump? 

If I can do this: you can do this.

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But! This post is not a pricing strategy post. (You should take me on as a mentor, if you haven’t figured that out yet!)

Because I want to tell you something very important:

Even when you’ve got your pricing right, your audience primed, and a pretty smart operations set up –

You still get those people who pay late, or forget to pay, or “forget” to pay.

And even if you take one hundred percent payment up front before you lift a finger (which I highly recommend), you’ll still get those goofs: the client’s automatic bank withdrawal bounces or their check doesn’t clear, or whatever.

Because: it happens.

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Next week I want to go into some detail about how I handle this sort of thing. But here’s something important to say, first of all:

People who pay late or who skip out or back out of a contract almost always underestimate how much of a pain they are.

It’s a pain for our bookkeeping. It’s a pain to have to go in and edit or update an invoice. It’s a pain because we turned other work away, to work for them – now they’re not settling up. It’s a pain to run a financial report and see someone’s ass in the wind in the A/R aging column.

But let’s get real:

The real deal is, it hurts.

It strips the dignity of our work, our efforts.

It’s like: come on, man. When I was designing for you or building you a piece or teaching you your course, I was focussed on you. I thought about you. I sourced the best materials, skills, the most professional service I could. I researched, I swatched, I bought samples. I fucked up and started over again. I worked very hard – and gladly!

I met my end of the bargain!

When you don’t meet yours, it feels terrible.

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So this post and the next one only apply if the shirker, late-payer or whatever is a rare event!

If it’s happening a lot – and I can’t stress this enough – you have bigger problems.

But!

If it’s only happening a little, it still matters very much how you deal with this. It’s important we handle this person just as carefully as any other client.

I feel like our shit experiences – the bad reviews, the iffy clients, the mistakes, the overbookings, the underbookings – 

those experiences are what forge our character (and lest we forget: cement our reputation).

It’s easy to handle things when business goes swimmingly. It’s how we handle adversity – especially the kind of adversity that kicks us in the tender ego spot! – that separates us into an exemplary business.

So: next week!

I’ll talk about handling that rare fish, when he’s not paying.

(I’ve got one of those clients right now! For website services).

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