We’ve all had ‘that’ client who either decides they’re not going to pay or that they’ll pay on their schedule vs your deadlines. But the fact is the boundary that you set or let slip – today – will make or break your business tomorrow.
In this episode, I give you the lowdown on how you can make sure that you get paid on time / every time without feeling like you’re threatening legal action from the word go!
Listen on the player above or read the blog below.
How to get your clients to pay your worth
We have had clients lately who have had issues with payments. It can be more prevalent and tricky in the B2C world as it can be based on opinions when people should be paying. Within corporations, there are rules and boundaries. This is something you can use on a consumer level where you set rules and boundaries from the outset rather than have a tricky conversation further down the line.
Everyone makes mistakes
It is important to know that everyone makes mistakes. I have been one of those clients where I have had a card expire and not realise. It does happen and it is part of running a business. You can outsource this part of the business. Outsourcing can help to take some of the emotion out of the payments.
You can look at the retail world and pull across expectations from there. You wouldn’t take a pair of trainers back to a shop because you’ve only worn them once. There are rules around this that is set by retailers.
The reason that payments are problematic is because you are a nice person. You want to be understanding and avoid confrontation. You just want people to pay on time when you ask them to. There is also a fear of damaging a client relationship. It may be a new client where you don’t want to scare them off with the Ts and Cs or that it’s a long-serving client where you have let things slide. Therefore, you don’t want to put new boundaries in with an existing client in case you lose them.
What happens is you put your head in the sand and it does not go away. It turns into resentment. This does not do the client any good, especially if you are working closely with them. The only person to blame is you. You are not taking control and setting boundaries. This is not the client’s fault. You need to make sure the working relationship works really well.
Firstly, you need to give the client the benefit of the doubt. You can let them know that they’ve missed a payment. Send them a notification and let them know that they’ve missed a payment. It’s a nice and kind way to rectify the situation then you can lay a boundary. On the whole, most people will be apologetic.
Make sure your client is using your product or programme
I hear a lot about people signing up to a client’s product or programme and then simply not using the service or disengaging. One of the things you can do is to reengage them. You will get people who buy a product but do not show up and do the work. In those times, it can be harder to deal with these situations. And it can leave you feeling bad because they are not making use of it but you are asking for payment.
This is not your problem.
The customer has to make the decision whether or not it is the right buying decision for them. This is why you have to be respectful and transparent at the selling stage that you are clear on whether it is the right programme and they are committed.
If selling a course or self-study where you don’t necessarily have a sales call, your customers will need to make their own judgement call. Should they decide not to do the work, that is their decision.
Please note: I am not a legal expert and this should be in no way taken as legal advice. What I can do is help you view these kinds of situations differently.
You do need to take emotion out of this and stop feeling sorry for people. Everyone will buy something they regret but that is the buyer’s lookout.
Set boundaries
Ask yourself: what is the boundary you are going to put in place today that will serve you moving forward?
It is a lot of energy to follow up with late and missed payments, so outsourcing is a good action. Are you going to let it slide? There are circumstances where there need to be exceptions to the rule. You may have things happening in your life where letting things slide is better for your health. But you do not want to make this a habit.
You need to set a boundary across the entire business that will work for everyone. This is a common issue that you will come across again. You can make exceptions like serious illness and this comes down to your values. It comes down to how you want to run your business. But remember that none of this is your problem as a business owner and you cannot be sympathetic to every situation. You need boundaries in place.
In my own contracts, when you sign up to my programmes, you are taking a space that someone else could have. When you sign up, you take full financial responsibility for paying it, whether or not you decide to continue to use it and engage. It is important to have these terms in your contract to protect your business and set expectations.
It becomes harder when you have to set boundaries in retrospect. You can set boundaries after the fact. Yet, you will have a harder time doing this after the fact. Setting expectations helps the working relationship. People then understand what they are signing up to and when you have to have those conversations, it is not new. Make sure you use terms and conditions and contracts. It is an integral part of your business.
You can use Suzanne Dibble and Rocket Lawyer to help you get these things in place.
Agreements and payment dates
Getting a new client to pay from the word go needs you to have an agreement with them. If you are speaking to them, let them know you will be sending them an invoice and it will need to be paid X amount of days before work starts or on a specific date. You can always give them a consequence, that the start date is not secure until payment has been made.
I use the support of my team all the time. They take care of my diary and sort out financial issues. For example, if I say a date is not secure and get another client who wants that spot, they will try and accommodate, but the client who is paid up will get first refusal.
If you are talking about existing clients, let them know that their dates are not secure. Let them know what the consequences are of not paying on time. Otherwise, you are leaving it up to your client to decide when they pay you.
Use your team
If you are resetting a boundary with your client, use your team. It can be helpful to let your calendar do the talking. Or to say ‘my team’ as this can help remove the emotion. It is saying how you business works and what you processes are. It removes the personal from the conversation.
If someone has fallen on hard times, you can do payment plans to make it easier for them. And there is a difference between one person doing it and many clients doing this. It can happen so you need to think about how you will handle exceptions to the rule each time.
Be consistent
Letting people off and making exceptions is also a reflection of you. It can be about whether you feel unworthy or guilty. Guilt can be positive but in most circumstances, it is forced guilt. It is a kind of imposter syndrome where you can feel guilty about their issues, that they have not done the work. Again, this is not your problem.
If your programme has given great results to many other people, there is no reason it cannot give great results to them if they use it. Quit feeling guilty and think about your business, being a leader and dealing with things in the right way. Think about how you can be consistent.
You can be a good human and still have boundaries.
If the client says no, it is up to you whether you take legal action. But do not let it slide. Set your boundaries on what you expect to happen. In some circumstances, it is worth taking legal action. Sometimes it is worth it from a principled point of view.
You can reset the boundaries
If you have repeat late-payers you can go to them and make a suggestion on how they remedy this. I suggest an automatic payment plan if you are experiencing this. So many people avoid this because it often involves using Stripe or Paypal where they take a cut of the money. It is part and parcel of a business and factor it into your pricing.
You are paying for the benefit of their automatic payment systems which means you can set it up with the client and forget about it. When I have to pay for stuff manually, I hate it. I know that I will forget. Why not set up automatic payments if you know you will be taking payments on a monthly basis? Take the cut and put it into your pricing.
If your client likes doing it manually, then let them know it needs to be paid by a certain date else the sessions will be removed. Get their buy-in. If it is not okay then it might be time to sack them as a client.
It is more detrimental to them than to you if they do not pay on time. You need to lead them with what is fair and right.
This is one of the many things I help with on my Elevate programme. It is a combination of 1-1 support and a mastermind. You Elevate your marketing and the workings of your business as well so that when you scale, you do so to your full potential.
Book your call with me here.