Global crisis. Companies shuttered. Your clients hunkered down at home.
How do you deal with billing clients now?
This question (shared with permission) came in from list member Philip Fulton who was wondering what to do about his April invoices: “Knowing some of my clients/members will be feeling cash flow challenges, should my April invoices somehow reflect this reality?”
While in this case, we’re talking about a retainer where you’re billing your client the same amount each month, it’s a valid question for sending out any invoice right now.
There are multiple forces at play here—so let’s take a look at each one in turn.
Know thy client. The single most important thing is to understand each client’s situation (membership fees are a different animal which I’ll tackle below). This is the time to have an actual conversation with each of them.
Set up a call (email isn’t personal enough unless you know they are crazy busy with the crisis). Find out what’s going on for them personally—their headspace will tell you a lot about how they’re viewing the world right now. What’s happening inside their organizations? How might that impact your client’s situation?
There is no one-size-fits-all solution. If you’re focused on the hospitality or travel niche, they may still be in shock, uncertain how to move forward. If your clients are in healthcare, they may be busier than ever because of the crisis and need you exponentially more.
Find out how they’re feeling and start thinking about how you can help.
Discuss if/how your work should change. Once you know the lay of the land, you’re better able to discuss options on how your work should proceed and whether changes might make sense.
If you’ve been reading my stuff for a while, you know how I feel about reducing price without reducing scope: just don’t. Avoid adding automatic COVID-19 discounts to your invoices—you are not hawking goods, you’re providing professional services. You’re not on sale.
But that doesn’t mean you can’t offer carefully considered options to specific clients to help them over a hump. Maybe you delay a piece of your work or restructure the scope to reduce fees (provided you can still reach the agreed-upon goal).
If you know they’re in a severe struggle, you might give them some additional time to pay—you’ll have to wait longer for your fees, but you will ultimately get paid.
Get clear on your value. One of Philip’s concerns was that coaches, consultants and other advisors may be considered “soft” services that are easily cancellable in times of financial stress on the business.
If ever there was a time to have 100% clarity on the value you deliver, it’s right now. If you can’t demonstrate your impact on the bottom line of your clients’ business, you’ll never have long-term staying power. Why wouldn’t they cut off your services at any time they fail to see value delivered?
If your service is funded by someone other than who you’re serving (like an executive coach retained through the HR function), no question you’re vulnerable and not just because of COVID-19.
But here’s the thing: cutting your price won’t make you more valuable to HR. It won’t endear you to your client who probably doesn’t see your fees anyway. All it does is signal that you’re nervous about being retained vs. a serious professional.
What if instead you put that energy into defining a deep enough expertise—and the corresponding relationships—that make you irreplaceable?
I get that that doesn’t happen overnight. But if there is a gift in this mess, it’s that you can rise from being seen as “soft” to being a necessary part of your client’s business and key contributor to their bottom line.
Membership fees. Membership fees are a tad different. Listening is still the right starting point because so much depends on who you’re serving. Be proactive and ask what’s happening in their world right now.
Say your program targets independent real estate agents. Obviously the next few months will be financially depressed for a hefty majority. But maybe you’re teaching core selling skills that help them sell on-line more efficiently—this just might be boom time for your product and cutting your pricing sends the wrong message.
Instead, you might offer extra value—a special COVID-19 video series or downloads on how to communicate with potential clients during the downturn. Increase the value you give and leave the price alone.
Ultimately, you want to compare the price of your membership to the outcome members are receiving. If they’re not getting something at least as valuable as your price tag, there is simply no way to retain them until the two are aligned.
So…is some income better than none? If you can’t put food on the table, you know the answer.
But a far better solution when you’re able is to deal from strength, which means you don’t discount fees. Because you know that in time you’ll be hired by right-fit clients who value you and what you deliver.
In the meantime, work for solutions that enable both parties to feel good about the transaction while building your mutual relationships and businesses.
Related: 18 Ways To Keep Moving Forward