What should you do if you think you have wrapped up a deal with a client for a certain amount, but then the client asks for a series of extras - usually over a period of time rather than all at once? This is why it's called a nibble, because it's like take a series of small bites of something. Real estate people frequently encounter such a client, when they think they are about to close on a sale. The client starts asking for add-ons, such as can the owner fix the roof; can the owner cover the cost of a paint-job; can the owner leave the bookcases in the den? And so on and on, and often owners agree rather than stop a sale of several hundred thousand dollars over a few thousand dollars more in extras given to the owner.
Such nibbles go on all the time in business, whether you are selling a property or business to your providing professional services. Clients seek to get as much as they can for as little money as possible, and may keep on asking even after you reach what you think is an agreement. They still ask for more, often over a few days or weeks, as add-ons to a hoped for sale, and frequently sellers or service providers give in, thinking this will close the current sale as well as encourage more business in the future. But is that something you really want to do?
That's what happened to Frank, who helped clients in writing their books. He made arrangements with one client, Nathan, which turned into something of a nightmare, because Nathan was co-writing the book with another person who was paying the bills. So at one point, Nathan had trouble getting his partner to pay in a timely manner, so he asked Frank if he could keep writing to make their deadline. Because the book was on a timely subject in the news, Frank made an exception to getting payment upfront for work to do, since Nathan kept assuring him they had a contract and he would be paid. So Frank caved, concerned the project would end and he wouldn't get paid at all. Eventually, he was paid, but there was a three month delay, and in the meantime, Nathan kept adding in some extra services, such as a last minute chapter of about 25 pages beyond the original contract word. Also, Nathan asked Frank to write up information from some online articles and to meet with him to do some interviews for the book. As a result of these requests, Frank spent about 30 hours more than estimated to complete the project. And, of course, Nathan didn't pay anymore.
Then, Nathan contacted Frank about another book. This time he promised to pay all in advance and pay more if the word count went over, plus he added in a few thousand dollars for editing. So Frank agreed on the amount and terms. But soon after Nathan advised Frank that he would be sending a substantial payment up front in a few weeks, he explained how he would also send Frank topics to research for the chapters he would be writing. Further, he said he planned to come to Frank's city for a couple of days, so they could do some interviews. Oh, and then the editing would be for about 25,000 words that Nathan had written himself, whereas Frank had understood this fee for editing for what he had already written to polish it up. Thus, even though Nathan had corrected for previous problems and an extra word count, now Frank felt that Nathan was asking more still extra work, though the particular type of work was different.
So what should Fred do, and what should you do in a similar situation with a client who asks for more and more regardless of your industry?
1. Remember that no written agreement is binding until all parties sign it, and you can always void or change an informal agreement to be followed up by a written agreement. Just don't take any money for an agreement until you are sure you want to do it.
2. Remind yourself that it can be better not to take on a project if you will be making substantially less than your usual per hourly rate, after you figure out the number of hours you are likely to spend for that income, and include any of your costs, such as for travel.
3. Factor in the amount of time or any costs involved in doing any extra work that the client is requesting, and assess how much that extra work will impact your earnings for doing the project. Also, consider the likelihood of getting one or more other clients to replace the work for this client and how much you need the income from that client, even if less than your usual hourly earnings.
4. Based on your assessment of likely earnings, likely alternate clients, and your need for income now, decide on whether you want to accept what the client is requesting. If not, ask for more money or doing less of the extra work requested. In other words, be prepared to accept the agreement as is, negotiate, or say no to any extras.
5. Diplomatically explain to the client how what he or she is asking goes beyond the original scope of the project. Then, discuss various alternatives - the client can pay more; the client can ask for less based on prioritizing what is more or less important; or the client can propose other possibilities.
6. If the client is reasonable and realistic, you can generally work out an understanding. But be prepared if the client is unwilling to make any changes in what he or she is demanding. If so, it may be best to indicate that you can't take on the project, because it will involve too much extra work without compensation; and be ready to walk away. Sometimes this ultimatum may be enough to get the client to agree to your last proposed terms or even come back with a reasonable counter-offer. If not, explain you regretfully can't take on this project at this time and walk away.
In short, recognize when a client is trying to nibble you down to get more for less - and be ready to negotiate for more. Then, turn down an unacceptable arrangement, unless you need to make an exception because you are experiencing a slow-down, and really need the income though it's less than you would normally make for doing that work.
Future posts on this subject will deal with other stories of problems with clients. I invite readers to send in their stories, which I can post and comment on in future blogs.
Gini Graham Scott, PhD, writes frequently about social trends and everyday life. She is the author of over 50 books with major publishers and has published 30 books through her company Changemakers Publishing and Writing. She writes books and proposals for clients and has written and produced over 50 short videos through Changemakers Productions and is a partner in a service that connects writers to publishers, agents, and the film industry. Her latest books include: Resolving Conflict and Lies and Liars: How and Why Sociopaths Lie and How to Detect and Deal With Them.
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Source: Elder Care Huffington Post