it starts with us.

[This is a long one. I debated sharing it, but I believe it takes a village. Bookmark and come back if you’re in a hurry. Or during Sunday NFL commercials 😉]

Do you get a pit in your stomach when a client says their payment terms are Net-60, or even gasp Net-90?

Let me share this little story…

A client of mine this 2021 year spent over 250K working with my team (not paid directly to us, but in total for the initiative).

When we first put together our agreement in early 2021, the terms I provided were Net-30. All my clients are either PIF in advance or Net-30. Sadly, this was a no-go for them as their company terms are Net-60 (read: large conglomerate with a lot of red tape).

I reallllly wanted the client so proposed 50% on start (Net-60) and 50% on completion per project outlined (Net-60). Plus a +10% interest fee on the total. We agreed and proceeded.

Over the course of the year, they turned out to be one of the highest paying clients. Our recommendations were based off true benchmarks and realistic ideas. But the client pushed to do more, and with the paychecks coming in, it was hard to say no. I’d guess the client blew 50K of that 250K total spend due to unnecessary requests.

Fast forward to last week. The client, his finance guy, and my colleague all hopped on Zoom as we needed approval on our 2022 rates. The client wanted me to go line by line and explain each increase or decrease. I stopped him at the pass.

ME: “Naturally, some things went up due to demand and inflation. We haven’t raised our rates in a few years. Ironically some things went down, too. But I have to ensure my team is compensated for their time and value.

*the things that went down we’re actually things that their team did the most of. So I would have never thought there’d be a problem. It was pretty much a wash. 🙃

CLIENT: “I see… “

FINANCE GUY: “Also I want to add that no other vendor is bothered by the Net-60, it’s pretty standard. And the +10% addition wouldn’t fly again in 2022.”

Gulp. Long pause.

ME: “What are you proposing?”

FINANCE GUY: “To add to that, we also only do payments PIF Net-60 upon completion. Never 50% upon commencement.”

I said nothing.

Then he backtracked a bit.

ME: “I understand this is a fundamental difference of process, but we can not be any company’s bank or lender. We’re a small team that’s stellar at what we do. We understand if it’s a total deal breaker and can’t proceed – no harm no foul.”

Both teams continued to discuss how the payment terms were the elephant in the room that needed to be addressed before engaging further. So I shared that after the call, we’d discuss internally and find a way to meet in the middle.

After an internal regroup, here’s where we landed. Below is a copy of my email (with names removed to protect the innocent). Feel free to steal any language for yourself. And between me and you, I think this counter was generous:

Hi [main contact] and team! Thanks for today’s regroup call.

To get settled up on the elephant in the room (re: rate card & terms), I spoke with the team and here’s where we’re at...

We understand that Net-60 is non-negotiable with your team. We also understand that the 10% add on per project due to the delayed payment is not favored per [company]’s accounting. However, as a small team, we can not be any company’s lender. We’re too small to do so.

To meet in the middle, we’ve accepted the Net-60 terms with 50% upon start, 50% upon completion & baked in 5% into the fees (rather than being an additional line item at 10%).

See [company]’s 2021-22 revised rate card attached. Please let me know if you have any questions.

We’re confident that if you trust our initial recommendations and we get in a good flow of getting the work in advance, budget won’t be an issue. [insert detailed example of how they blew money]. We pride ourselves on being selective.

If this is approved, kindly sign and return.

We’re ready to get rolling as the projects come through and hope that this middle ground proves fruitful for both teams in the New Year.

Thank you!
-Ashley

The reponse? Don’t know yet. 😆

But what I do know is that us small creative folks, shops, and teams can’t sit wayside and let the big dogs (who need us!) dictate how we work.

And if the client doesn’t come back for 2022, that’s OK. We just opened up more space for clients who value our pricing/recommendations. I wrote about “welcoming space” previously here.

Silver lining: 1 client this week (who is a dream to work with) is upping their renewal as we speak. And 2 brand new clients are in the process of onboarding. 🙏

🔑Remember friends…we’re not lenders. We’re not a bank. We’re strategists, creatives, and heros without a cape, providing a service that matters. It’s up to US to draw the line on what’s acceptable and stand by what we deserve.

Here’s to sticking to your guns!
-Ashley

🔥UPDATE 12/14/21: Client accepted the counter-offer 😉