
Never Be a Customer's Doormat - bdfh42
http://www.inc.com/geoffrey-james/never-be-a-customers-doormat.html?cid=sf01001
======
incision
Anecdotally, from the inside of some larger organizations I've never seen a
request for such leeway from a smaller company used legitimately.

It has either been simple ego or a sort of test to gauge just how far the
small company is willing to compromise itself.

 _> "The small company marshals all its resources to create a detailed
proposal (requirements, SWOT, etc.) which, when completed, ends up as an RFP
that goes out to a dozen vendors, or maybe just to threaten their existing
vendor with some fake competition."_

Yep, this is Procurement 101. I've seen folks who are too lazy to bother doing
a cursory search and replace to clean up the vendor name and logos.

~~~
malandrew
I wonder if there is a way to create standard documents like PDFs and
Powerpoints that phone home quietly so you know when the document has been
altered for reuse as an RFP.

There should be some technological way to determine if your copyrighted work
is being used honestly.

~~~
AlisdairSH
I think the point made above was that you shouldn't care if they use your
proposal/design as an RFP because you ALREADY billed them for just the
proposal/design.

When I worked as a consultant doing software customisations, they were always
done in (at least) two statges. Proposal and design work was a separate
contract from implementation. It was made clear to the client they could go
elsewhere for implementation. They rarely did.

------
mathattack
There's a VERY fine line between helping a client through a bind, and being
abused by an individual with a tight budget.

The former may stay with you for life. The latter will use you until you say
no.

It is very rare that it's a large company who needs the largesse of a small
entrepreneur to stay in business, though.

I see this in treatment of individuals as well as costs. Many clients assume
they can bully and abuse consultants. "We're your biggest account, so please
work the next few weekends and we'll help you get the next project." You can't
earn a trusted relationship without a first project, and the slippery slope
starts.

The key for any small business is actively screening your prospects. It's hard
to turn away any business, but if you screen for "How is this person to do
business with" it can save aggravation along the way.

~~~
stevoski
In _some_ cases, standing up to client pressure and saying, "Sorry, but I
don't work on weekends" can earn a client's respect.

~~~
mathattack
True. And if you always roll over when you have explicitly said you won't,
you'll lose respect. (Or lost appreciation for standing up)

The key is you have to deliver on what you say will. Then you can earn the
respect.

------
kephra
I'm using two ways to make my customers pay:

1st, I offer 2% sconto (discount/allowance), if they pay within 7 days.
Customers who can count, and have no cash flow problem normally use this 2%
discount.

2nd, I'm using a factoring bank, for those customers who payed late the first
time. The bank will pay me immediate and has good attorneys to get the money
from the bad customer. Factoring will charge a margin comparable to 3 month
EURIBOR.

Normally a customer who has been contacted by my factoring bank phones back
within a few days, claiming that they will pay next invoice immediate to get
rid of the shame of a factoring bank registering a bill debt.

I'll then try the next (3rd) invoice in normal way. And if they dont use the
discont and pay within 7 day, I'll stop doing business with them, regardless
how much they beg me to complete the project.

My time is to valuable to fight bad customers.

See:
[http://en.wikipedia.org/wiki/Factoring_%28finance%29](http://en.wikipedia.org/wiki/Factoring_%28finance%29)

and:
[http://en.wikipedia.org/wiki/Discounts_and_allowances](http://en.wikipedia.org/wiki/Discounts_and_allowances)

~~~
csomar
Can you expand more on the factoring bank? Which bank are you using, and
what's the process?

~~~
kephra
I'm using deutsche-factoring.de because its located in Bremen, my home town. A
factoring bank buys the invoice, pays me immediate, and bills the customer.
They will file a Schufa record. The schufa record will tell every bank and and
everybody else who wants to know it, that the customer has the habit of paying
late. Thats something no company wants on file.

This of course only works, if you have a real contract with the customer. So
getting the paperwork right is always the zero step.

[http://de.wikipedia.org/wiki/Schufa](http://de.wikipedia.org/wiki/Schufa)

------
capex
For long overdue accounts, here is a short sample email that I came across a
while ago:

"A quick note to say that I am really disappointed that you have still not
paid me the [..] that I'm owed for the work I did for you. In the grand scheme
of things, it's not a lot of money, but actually I think that this is more a
matter of respect.

I have always been there at the drop of a hat to sort out any problems you
might have. I love working with you and have always taken our relationship as
more than just client/supplier. But if I can't rely on you paying promptly or
it takes several attempts and reminders to get my money, that's not good
business.

I'm not saying that I don't want to work with you, I do. But if I don't
receive what I am owed within the next couple of days, I will have to think
twice about helping you in the future."

Never hesitate to ask what's rightfully yours.

~~~
tptacek
I think this is a little silly, and an understanding of why will help you with
your business, so here goes:

If the late payment decision comes from the project stakeholder, the person
who deliberately engaged you, your contact at the client, then really your
relationship is over when they decide to mess with you. Do a standard
collections process with them, then terminate the relationship.

If the late payment decision comes from a procurements or payables department,
as is often the case, then they don't care about any of the emotional appeals
in your letter; in fact, they don't even care about threats of reduced
availability or flexibility. People in those departments are compensated for
deferring and reducing payments; they aren't measured by how well they
maintain the actual customer relationship. Do a standard collections process
with them.

You might consider informing your client contact of the dysfunctional payments
department, but I haven't seen that produce reliable results (again: the
incentives of the procurements or payables people aren't aligned with those of
your client contact).

It's important to understand why you aren't getting paid. Here's another fun
thing to know: like it or not, sometimes its your fault; if you're working
with a company with a formal payments process and you don't follow that
process to the 't', you're going to get paid late no matter what you tell
them.

~~~
cromulent
Yep - this is excellent advice.

Toyota (a company that generally has its act in order) once paid my consulting
bill twice, and then next month paid late. Both times I brought it to their
attention and it was rectified immediately. Both times the project stakeholder
had no idea, he had just approved them. Left hand doesn't know what the right
hand is doing.

Incentives are everything in economics.

~~~
csomar
Exactly. Happened with me too. Got paid twice. Told the project manager and he
said he'll tell the Accounting department. A year later, and still nothing
happened.

------
lsc
The thing I see is that the customers who are most likely to ask aggressively
for things are the customers I want the least. It burns out your support
resources, and running a support organization is /hard/ \- and it's really,
really important.

Running a support organization is hard because people who have both social
skills and technical skills are... well, they are very, very valuable, and
quickly price themselves out of what you usually pay support. Most people
focus on one or the other (the technical or the social) - so usually you end
up hiring either socially optimized folk and try to automate (or teach) the
technical side, or take the technically optimized, and try to put a level one
'shield'(of folks with social skills) in front of them)

You also get huge levels of burn-out in support. I think this gets worse the
more you try to stick with policy (as opposed to "just help the customer") -
at least for me, it's really rough when I'm supposed to just get the guy off
the phone, rather than solve a problem. Even in the best of times, doing
support is rough; everyone you encounter has a problem with your service. The
phone support desks for larger services are usually places people go to become
cynical.

My /goal/ (and I don't achieve this goal very often) is to go out of my way
for customers who ask in a way that is easy for me to deal with on a
logistical/emotional level (yeah, emotions are important here; I have...
limited support resources) - and then to be more "well, this is policy" for
the more aggressive, harder to deal with customers.

The hard part is that the customers who are best of all... those who don't ask
for any extra attention at all, are the hardest to give something 'extra' to.

(now, I can identify about 10 ways that I'm failing those customers right
now... I'm just saying, it's harder to know what people want when they are not
aggressive about it... but those are the folks who burn the least customer
service resources, both in the 'use' and 'burn out' senses.)

------
ebauman
Good advice. The only issue I have is in the first anecdote - absolving their
debt based on a promise of future work? That's not letting a client push you
around - that's being a downright idiot.

------
DanBC
I was working for a small (50-100 employees) manf firm. We out-sourced some
difficult, technical work to a local specialist. We had tight unusual
requirements, we weren't paying much, and we wanted a very tight delivery
schedule.

The guy did wonders - worked really hard and delivered excellent product, on
time.

He issued us with an invoice.

We didn't pay.

He followed up - asked why we hadn't paid.

We hadn't paid because his paperwork didn't conform to "what we needed" in
some obscure bureaucratic way.

It took him a few weeks of back-and-forth to get his payment.

Needless to say, he declined all our other offers of work, and we got worse
quality product, from less flexible suppliers, at greater cost in future.

Payment departments can harm your company.

------
at-fates-hands
When I worked for a wealthy business owner (he had one business and about 50
employees) he would always give me advice about dealing with larger companies.
Here's some of the better stuff he shared:

1) Never back down to a larger company. As soon as you give in and give them a
break, you're going to be a doormat. Always be the squeaky wheel.

2) Always get everything in writing. They offer you a verbal deal? Say not
until we both sign it and its on paper. Both companies and sales people will
always balk at having something you can show a judge in a small claims court
if its just an empty promise. Then you have something to hold their feet to
the fire if it doesn't work out.

3) Always, always, always be willing to walk away from a deal. It's a big
account? You could save yourself hours of frustration and use that energy to
find several smaller companies. Or you could fine another larger company who
will treat you better. Nothing is worth being someone else's patsy, nothing.

~~~
skrebbel
> _" 2\. Always get everything in writing."_

I work at a mid-size software consultancy. In our region, the company's
reputation is that of a trustworthy and flexible partner, with good engineers.

Our customers are mostly large companies (5k+ employees). It is not uncommon
that, for a new project, we already start working for them before anything is
on paper (more specifically, before an official purchase order was prepared by
the customer). Middle management at the customers love this, because they
usually hire consultants for urgent problems, but their internal bureaucracy
prevents them from getting a purchase order out fast enough.

So, if your reputation is strong and customers _will_ want to get back to you,
I believe that point 2 becomes less important.

I once asked one of our managers why he didn't immediately get a particular
verbal agreement on paper. He said "we have to work on trust anyway. We really
don't want to get caught in a lawsuit, since it'll cost us a lot of money and
energy - if there's a lawsuit, we already lost. So, we simply only work for
customers that we trust".

The only case that I know of where we didn't get paid was when a customer went
bankrupt. No amount of paper would've saved us there.

~~~
speeder
That still probably requires some comparable power between companies.

I have a friend, that was hired by a large media company to do some 3D models
that the media company was hired to create to Siemens.

He never bothered in making all the proper papers, and just worked away.

Now Siemens got the 3D work, and ran away with the money... And how you can
sue Siemens? They are so huge that if you attempt that they will make you go
bankrupt in lawyer costs only.

~~~
edoloughlin
You might want to redact the company name from your comment in case any of
their expensive lawyers notice it...

~~~
speeder
I know, but right now they have more issues (ie: it was found out they were
bribing the governor of the state where I live to be allowed to build
trains... this probably is one of the factors in their recent leadership
change)

------
mrkurt
Twitter has made this a potential problem with _all_ customers, not just
larger customers who want to throw their weight around. The threat (explicit
or imagined) of a Twitter PR nightmare can get companies into the same
position with customers, even "free" ones if a company does that sort of
thing.

------
kposehn
So true. So very, very true.

I had an experience that went much further than the "pay us what you owe now
or else" stage. At some point I want to write that up so that people can see
how to pursue a debtor past that point and what pitfalls to look out for.

Funny thing is, word gets around real fast that you go after people who try to
play you - and you get better customers because of it.

------
speeder
My parents own a shop that sells nuts, bolts, clamps, and some other stuff for
industrial fixation.

One of our clients is a huge company (it is a conglomerate, that in several
areas it has the first place in market share), and it works by making a price
contract with you, and while the contract is in force, you must sell for the
price set on the contract start.

My mother got good in negotiating those contracts, and not allowing the client
to push us around, and this resulted into a profitable relationship, but we
know that this big client left several of our competitors utterly destroyed,
it leaves a wake of company destruction...

It is because many companies, several bigger than my parents (my parents
company have no employees, and sell small amounts of stuff used mostly for
emergency repairs stock), believe they are too small, and that such big client
is awesome and they must then take their first term of the contract at loss to
attract the client...

The problem is that after the contract expire, the client just refuse to raise
the contract much above inflation, thus if you accepted a past contract at
loss, you have suddenly to play hardball to Chuck Norris level to get
profitable again, since the person let themselves get pushed around in first
place to get the client, they usually don't negotiate enough, and of course,
get abused in the way that the client repeteadly orders lots of stuff from
them until the losses are too big and they fail.

We learned better, we made clear to that conglomerate, that we won't sell at
loss, we prefer to not sell at all, than selling at loss.

~~~
rmc
_we prefer to not sell at all, than selling at loss._

It's crazy that one has to actually put this down, but that's perfect sense.
Selling nothing is more profitable than selling at a loss.

------
niuzeta
sometimes losing a big client in such way may actually be a way to sell
yourself. i.e., marketing yourself (or the company) as the hard-nosed
professional whose pride is in the work but will not be pushed over.

Sometimes, such reputation does most of weeding-out of clients with the
intention of empty promises. Setting your market value too high isn't
recommendable, but setting it high is definitely important.

------
marincounty
I think the Ten Commandments should be read everytime the board of directors
sit down! Before the Stanford MBA pontificates on how to screw the existing
customer base?

------
6d0debc071
Reminds me of a speech by Mike Monteiro:

[http://vimeo.com/22053820](http://vimeo.com/22053820)

(Skip to 1 minute in to skip intro.)

To wit: "Fuck you. Pay me."

------
amerika_blog
Never be anyone's doormat! We have a word for that type of relationship:
abusive.

