How To Identify Good Clients (and Avoid Bad Ones)

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Peter Drucker is one of the most influential business writers of the last century. His ideas have shaped the ways we conduct business today. One of Drucker’s main ideas was the notion that without a customer, there is no business. Furthermore, customer satisfaction is the key to the success of any business, or in his words: “The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer.”

To that, I say amen. Here’s the tricky part, though: satisfying all of your customers is simply not feasible unless you choose the right ones and let go of the rest. How do you do that? First, you have to set principles for identifying good customers. Then, evaluate potential customers against those principles, and bid farewell to those who don’t measure up… yes, even if you currently work with them.

Crafting Your Principles

The quest for good customers starts early on. It starts with deciding who your ideal customer is. Different companies have different ideals and cultures, and a variety of parameters are important for making this decision.

Here are the parameters to consider:

  • Size
    What sizes are the companies you have enjoyed working with? Do you prefer to work with small family businesses or large corporations?
  • Budget
    What is your minimum project budget? Will you take on a project with a tight budget if the customer is strategic?
  • Payment schedule
    Would you agree to receiving the full payment at the end of the project? If not, what’s the minimum up front that you require? This is often a pain point for small businesses and freelancers, and I strongly recommend following a harsh rule here with no exceptions.
  • Technical knowledge
    Are you willing to work with a customer who has minimal technical knowledge? How might this affect the outcome of the project?
  • Project dynamics
    Are you looking for a customer who will just give you the requirements and then wait for the deliverables, or would you prefer a more engaged client? On projects in which you collaborated with the client daily, were the results better or worse than those of projects with less interaction?
  • Length of relationship
    Are you interested in one-time gigs or a long-term working relationship? If you are thinking long term, estimate whether a particular customer would have enough projects to sustain that.
  • Personality fit
    What kind of people do you like to work with? Check with other companies that have worked with your prospective customer to find out whether there were any personality clashes during their projects.

Qualification Is Crucial

If you get this right, you will gradually see your customer relationships improve. More importantly, you will be less likely to wake up asking yourself why you are working on your current project.

To keep it simple, I’d recommend a total of four to five principles; but as with everything, tailor it to your own business. One effective method I have found is to set your principles in a spreadsheet, rank them, and then decide on a cut-off average for qualification. This is a great tool for identifying deals with higher average scores or for deciding between two potential deals. We’ve prepared an example of such a spreadsheet1 (Excel Spreadsheet).

A simple and efficient way to determine whether you’ve ranked your principles correctly is to look at past projects and make sure they align with your cut-off average. Specifically, make sure that past projects that really sucked get a low score, so that you avoid taking on similar projects in future.

Don’t be afraid to share your principles with potential customers. Some might show flexibility. A few years ago, when I approached a freelancer for a potential design project, he made it clear to me that he would charge 50% up front and 50% upon completion of the project. I told him we couldn’t accept such payment terms. He immediately wished me luck. You know what? I was so impressed by his confidence that I called him back and hired him anyway.

Self-Qualification

The qualification principles are important because they can also be a great time-saver. I call this self-qualification. The idea is simple. Now that you know what matters most in your relationships with customers, you can signal that on your website, filtering customers who you would never want to work with.

For instance, you can be clear about the prices you charge and the projects you’ll take on. Read this beautifully crafted message from Forty2:

“We try to avoid very small projects (under $10k) because our process doesn’t work well at that scale. Likewise, we also pass on very large projects (over $300k) because they’re just not much fun to work on.”

Screenshot3

You can be sure that Forty is saving a lot of time by not dealing with customers who want a plain WordPress skin for $500. The company also subtly hints that the big guys needn’t call it either. It has decided that it doesn’t enjoy big lengthy projects, which are usually initiated by big messy corporations. To make sure prospective customers get the picture, Forty specifies its hourly cost straightforwardly: “Our base rate is $145/hour.”

Another beautiful thing to notice is that personality comes through the text on the website. You can be sure that anyone who takes themselves too seriously won’t be contacting the company. And that’s perfect! It helps the agency focus on the right set of customers.

We see the same approach with Blue Flavor4: clear, detailed pricing accompanied by a clear message, setting the stage for the initial communication:

Screenshot5

Nclud6 takes a different approach by including a drop-down form in which the customer can indicate their budget. This again makes clear the range of projects the company is willing to take on:

Screenshot7

Ngen8 uses the same “trick.” The difference in the messages that these two menus send is interesting. Judging from the budget ranges, Nclud probably handles bigger projects:

Screenshot9

Never Too Late To Say Goodbye

Assuming you’re passionate about your profession, let’s make one thing clear: you should enjoy the work that you do. If you don’t enjoy your work, that means you’ve taken on a frustrating project or, worse, a frustrating customer.

That can happen. In fact, it happens a lot. And even if you employ the principles mentioned above, it will still happen. But that doesn’t mean you have to continue suffering. No matter how many hours you have invested, if a project doesn’t work, it will continue not to work, and you will only experience more grief. Kill it as early as possible. That would be best for both you and the customer.

So, why would you fire a customer? Let’s look at five reasons:

  1. The customer is abusive.
    This is an easy one. You should be treated with respect and dignity, and you should not tolerate any kind of abusive language or behavior. Period.
  2. You don’t get paid on time.
    You are not a bank. Be willing to bend over backwards for your clients, but they must pay you on time. A customer who doesn’t understand this will hurt your cash flow and, eventually, your business.
  3. You get phone calls at nights or on weekends, even though you insisted otherwise.
    People have to respect your time and not act as though they own it. You are selling your professional services, not yourself.
  4. The scope of the project perpetually increases, but the customer refuses to increase the budget.
    This happens a lot. You start a logo, and then the client asks you to throw in a website. The responsibility for setting expectations is yours, but if you do that, and the customer still pushes for more without being willing to increase the budget, then you’ll end up with an unprofitable business.
  5. The customer doesn’t respect you professionally and ignores your recommendations.
    To stop caring and just take orders from the customer takes all the fun out of a project. It kills your productivity, erodes your portfolio and stunts your skills.

Obviously, an important question is whether you can afford to fire your client. This is a valid concern, and it depends on the circumstances. This goes back to what you value in customers, and so this will vary from company to company.

If you have many projects waiting on deck, you could probably fire a customer without hurting your revenue. In fact, by working with someone who don’t fit your business values, you are probably giving up on great customers who could take your company to the next level. Take all of these factors into consideration when deciding.

If you do decide to fire a customer, you should seriously consider how to go about it without hurting your relationship with them and without risking your reputation.

Some ways are better than others. The fact that you didn’t get along with this person doesn’t make them bad. It simply means that your values or personalities do not match. More often than not, you will be the one who has to pick up the phone. Follow these steps:

  1. Prepare for the call. Look hard again at your decision to make sure it is the right one.
  2. In the call, explain the reasons for your decision, and point out that it was a business decision, not a personal one.
  3. Help the customer find someone else who would be willing to work with them. Other firms or professionals would likely be happy to get the opportunity.
  4. Bill what you deserve.
  5. Note what you learned from the relationship, and add it to your qualification process.
  6. Most importantly, move on.

At the end of the day, the Pareto effect applies to some degree: 20% of your customers are profitable, fun to work with and contribute to 80% of your growth. The ideas explored above could help you increase that 20% to 30, 50 or even 90%.

In Conclusion

Working with the wrong customers has ramifications. Designer David Thorne relates one email exchange10 of his that serves as a funny yet unfortunate reminder of this. It didn’t matter to David that he had already spent hours working for that customer; he understood that the relationship was not for him, so he ended it.

If you are disciplined and follow this simple process, you will see an increase in successful projects. And your life will be better, too.

Related Posts

You could be interested in the following related posts:

(al, vf)

Footnotes

  1. 1 http://www.smashingmagazine.com/wp-content/uploads/2011/01/qualify.xls
  2. 2 http://www.fortyagency.com/work/pricing-and-billing
  3. 3 http://www.fortyagency.com/work/pricing-and-billing
  4. 4 http://blueflavor.com/about/pricing-guide/
  5. 5 http://blueflavor.com/about/pricing-guide/
  6. 6 http://nclud.com/rfp
  7. 7 http://nclud.com/rfp
  8. 8 http://www.ngenworks.com/contact/survey
  9. 9 http://www.ngenworks.com/contact/survey
  10. 10 http://www.27bslash6.com/p2p.html
  11. 11 http://www.smashingmagazine.com/2010/09/24/common-client-difficulties-or-turning-all-clients-into-dream-clients/
  12. 12 http://www.smashingmagazine.com/2010/09/29/breaking-down-doors-promoting-yourself-to-dream-clients/
  13. 13 http://www.smashingmagazine.com/2010/07/08/renegotiating-the-contract-and-other-tales-of-horror/
  14. 14 http://www.smashingmagazine.com/2010/06/07/how-to-spot-a-sketchy-client-plus-a-contract-template/
  15. 15 http://www.smashingmagazine.com/2010/04/09/dealing-with-clients-who-refuse-to-pay/

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Uzi Shmilovici, the founder of PipeJump, a simple CRM for small businesses, and Future Simple, a company focused on creating simple and intuitive online software.

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  1. 1

    Excellent article! Love David’s email, I think many many designers can relate to this! A friend told me at Christmas that he picks out 10% of clients each year who take up 90% of his time (not paying, nitpicking etc.) and axes them, it sounded radicle but made a lot of sense….

    9
  2. 2

    I really wish more people would read this! Save alot of time and hassle. Only problem I can foresee is how do you charge a client for a non completed project? Is that something that should be in the contract? Do you bill them for the percentage of work you have done and hand them the code / files?
    I’m not a freelancer myself.
    Interested to see what others have to say on these ideas! =]

    1
    • 3

      It’s quite simple and called a “Kill Fee.” A lot of standard design contracts include them. Here’s the clause we use: “a. Contractor will charge a ‘kill fee’ for work completed should the contract be terminated. It is equal to any additional expenses and labor incurred above and beyond the deposit amount, prior to any incremental payments agreed upon (see Section 3. ‘Payment for Services & Timeline’).”

      0
    • 4

      “Progress payment” sounds nice. The contract should state that you require payment for your progress. You will invoice at particular ‘landmarks’ upon approval to continue; and if at any stage should the project be canceled you will charge for the work completed to-date and hand over as much of the deliverables/work that has been paid for. Because after all you’ve done the work and deserve the money, but they’ve paid so they deserve what you’ve completed so far, all’s fair… That’s how i see it.

      As for “Kill Fee” i’d rename it to “cancellation fee” sounds far less scary and makes a bit more up front sense.

      3
  3. 5

    Depressing article from my perspective. Particularly “are you willing to work with a customer with minimal technical knowledge”. I’m one of those ill-informed customers who is undergoing a painful education in learning about the website design business. I don’t feel sorry for any web design service that is struggling, particulary those who expect someone who wants their first website to know the specific vocabulary and minutae of this business. I now know that some designers are married to a limited number of templates and that some designers have no artistic sense whatsoever. Before I started this journey, I had no idea that most web design services don’t want to waste their valuable time on you unless you are spending $2500 minimum. I blew $1000 down payment on a service that I finally had to drop because they couldn’t put together anything usable. I’m now ready to consider one of those services from India simply because their sites are very educational and straightforward. So yes, it would be a good idea to put price ranges on your landing page so that people like me don’t waste time trying to figure out if you can help me.

    -32
    • 6

      Sorry you have had a bad experience with the designer you’re dealing with. It’s not true that most designers have a 2500 minimum. One of the advantages of dealing with a freelancer is that they don’t have the overhead of a large company so their rates could be less. Of course you have to be careful to make sure they are legit. Before you go to India why don’t you check out BeantownDesign.com, my freelance business. :)

      -40
    • 8

      You usually get what you pay for when going to India. Our company has had to go back and “re-do” websites from India because they were basically just slapped together with poor code.

      There’s a lot of options available and extremely reasonable pricing with good freelancers. Word of mouth is powerful. Ask around and support local designers before going with some overseas business whose bottom line is to get something out the door as quickly as possible so they can still make a profit off of you.

      12
    • 9

      Thing is, going cheap means you’ll definitely get a template it most cases. Not that it’s always a bad thing. I wonder what you mean by “unusable?” It doesn’t work in IE6? Or maybe the interface has some elements that are too over-the-top for your site’s audience?

      There’s lots of good web designers out there. Of course the going rate starts at $2k, but many people misunderstand how much work goes into a fully custom, ground-up website. There’s not just graphic design and some HTML… you also have to figure in consultation, research, programming in JavaScript and/or PHP (a good WordPress template requires some PHP work), cross-browser bug squashing, setting your site up for you, dealing with possible server issues for clients (is GoDaddy’s service DESIGNED to be problematic?), etc. As a new designer to the game, I’ve had to learn about all this the hard way.

      Sorry your company expects you to be an expert. I think though that within companies that have large budgets over 10k, they’d better all know what they’re buying! Just makes good business sense.

      4
      • 10

        Hi:
        Why do you need to go to India when there are a lot of talented and professional designers here, at home? It is easier to deal with them and supports our creeping economy as well.

        In the past I was involved in dealing with development team in China – I was spending A LOT of time emailing them and trying to explain what should be done and how. In the end of the day it was very frustrating.

        Cheers,
        Olga

        4
        • 11

          Well, that is the problem. Why do you guys choose people in India and China only? I mean, you don’t have to go with the higher price (USA) or the lowest price (ASIA). Try to go with the best quality instead, which also brings you the best value for your money, right in between the two choices above (Europe).

          We do excellent work for our clients in USA, Europe, Australia and Asia, and we’re located in Romania & Spain. I bet we do better work than most of the USA companies (I know we do), and charge less as well, as the living expenses are smaller here.

          We’re always looking for business, so search Vuzum if you plan to have your work done properly, and be on the same cultural page with your team.

          -1
  4. 12

    I don’t know where you’re living but when I read that a typical website redesign is charged $40000, I’m really amazed because we couldn’t ask more than $10000 for such a task in most european countries and I suppose you could have it for $3000 with an offshore company.

    14
    • 13

      it all depends on the clientele you bring in. my company works on $110k+ sites all the time. we shy away from $10,000 websites – those small fish are always the hardest to deal with.

      -9
  5. 14

    @ Park Firebaugh – I guess you don’t go and buy yourself a car without taking the driving lessons or (at least) read few reviews about that car. I don’t think so =) Approach your next website the same way.

    And why do you think that spending lousy 1000USD on product that will serve you at least 5 years and should earn you much more is right? How long do you think does it take to create an entirely unique website?

    If you can’t get over this, I guess it’s better for all of us if you go and buy some stolen website from some Indian looser, who will live from your 1000USD for next year… Think of this as a sort of charity and go for it =D

    -5
  6. 15

    @ Doh! – Seems like US to me. You should consider their GDP and overall expenses before such comparision…

    -1
  7. 16

    A brilliant article. I can completely relate to the problems caused by clients who are not right for your business. As the head of a Web / Branding Design agency, I made a difficult decision back in 2007; after an endless string of problems caused by “low budget” clients, expecting a premium level of service.

    “Feature Creep” was by far the biggest issue we faced. Clients (usually with very little technical knowledge) were asking us to add new features to their sites a week before the deadline, with no time or budget extension. Of course, being young and naive, we usually agreed to add the new features before the deadline, and ended-up working through the night to get it finished. At one point, in 2006, we had this happen with three of our clients all at the same time, all with deadlines within a week of each other (bad planning, I know) – It got so bad, that I even considered shutting the business down entirely.

    Now, we are more experienced. We only take on one “Medium/Large Budget” project at any one time. It was a difficult decision because, I felt like I was literally shutting the door on much needed cash. However, on reflection, it was the best decision I ever made. Focusing on just one large(er) project at a time allows us to offer the premium service our clients expect, with less pressure… throughout the duration of the project, we are 100% focused on that particular client. And my staff are much happier as well; No longer having to work through the night and at weekends. What’s more, we quite literally have clients queuing outside our door, wanting to work with us because of the level of service that we offer. They know what we expect from them; as well as what they can expect from us.

    We are always upfront with what we expect from our clients during a project and I’d say, on average, we end-up taking-on one out of every 10 projects that come to us. It’s not always us that turn the clients away either; sometimes they decide that we aren’t the right agency for them.

    *Interesting that you referenced David Thorne’s e-mail exchanges with Simon Edhouse… when I first that article at the start of 2010, I thought it could have been me and any handful of my clients I worked with between 2004/2006.

    Thank you Uzi for writing such an important and relevant article.

    17
    • 17

      Can I ask how do your company or other companies in general get new clients ?

      Do you contact them?
      Is there a special place where you find these clients?
      Or is it strictly word of mouth?

      How did you start out getting clients?

      For me i know i have the skill and knowledge to do well with my company, but im having a really hard time just finding clients, I can find a lot of listings for jobs at other agencies but im really inexperienced in finding clients.

      2
  8. 18

    It is interesting to see the prices for US projects. We are profesional webdesign, graphic, ppc, seo, social, marketing … company with more then 100 satisfied customers from central europe (Czech Republic, Slovakia …) and focus mostly on middle size companies and 95% of our contracts are between 2 and 5 k $. Even e.g. the development of eshop for the biggest european maps publisher was for about 7 000 $, the biggest project with a half year work was for about 25 k$.

    I see we should start to make projects for US market ;-)

    -9
    • 19

      It’s easy to say, “I see we should start to make projects for US market,” but the truth is that web design for most companies (and people) is culturally specific. US customers respond to different visual cues as dictated by culture than Central European customers, and there are different best business practices and norms to follow. Furthermore, as James says below, there is a gigantic range of possible web design services… The only difference between a $5,000 site and a $100,000 site will NOT be price, regardless of the design firm’s location.

      6
  9. 20

    James Archer from Forty

    January 14, 2011 7:54 am

    Hey guys, James from Forty (one of the companies mentioned above) here. Just wanted to jump in to let everyone know that putting pricing on our website has worked out really well for us over the years. It’s gone through various incarnations, but each time it has helped us get to the right clients.

    A number of people have also commented that they felt good about the fact that we were willing to actually put our pricing on the website, when most agencies make you call and jump through hoops to even get a very general rate.

    Uzi makes some great points in this article, and I just wanted to vouch for the fact that this really *is* the right way to do it. Set some standards for yourself, and then don’t be afraid to stick to them.

    14
  10. 21

    James Archer from Forty

    January 14, 2011 8:00 am

    Also, regarding some of the comments about how much a website costs:

    There is a *huge* range in the features, functionality, implementation, design detail, and additional services involved in building websites, so there’s a huge range in the pricing as well. We’ve done websites in the $75-100k range, but they were very extensive projects, and the end result was worth every penny.

    Don’t feel like you need to charge low rates just because someone else will do it for a fraction of the price. Charge what you’re worth, and make sure they know why you’re worth it.

    27
  11. 23

    Very interesting, eye opening. I learnt a lot from this particular article. Hope to implement some of the discussion at my own environment.

    0
  12. 24

    Excellent article! I had to fire a client this year for reasons 4 & 5 which had been made even more frustrating than they normally would have been as I had (stupidly, I now realize) discounted the job. I liked the client and wanted to help them out so I gave them a slimmed down scope-of-work and reduced the project cost. It turned into a completely frustrating time-suck of a job and I wasn’t even making my rate on it. Killing the project was the best solution. I only wish I’d done it a month earlier.

    3
  13. 25

    Great article! There are some really good points made here. While we’ve all been hungry at one time or another for that “less than desirable” client project, they usually end up costing us more than they’re worth in dollars, sanity and degradation of your own brand.

    To James at Forty I say, “Bravo!” and thanks for validating your business decision and showing its value. Great website and I’m perusing your SEO Booklet now…

    Thanks!

    1
  14. 26

    Clients can be so tricky, I like to work on recommendations…

    0
  15. 27

    Yep, I’m going to fire a customer. Abusive and does not respect my professional opinions. Then again, I might not have to, because every time I email them it takes them a month and a half to get back, and they never answer my questions. I’ll just keep responding with one liners and a question.

    3
    • 28

      Overly long response time is one of the most common issues that I’ve seen working with website development clients. The problem seems benign on the surface–if they aren’t responding then you aren’t working–but it really isn’t. Clients that take too long to respond, to answer questions, to send notes and critiques, to approve final mockups, etc. are the cause of two major issues in my experience:

      1) It becomes increasingly difficult to manage time and resources when there are more and more unresponsive clients. Often, when these clients do awaken from their slumbers, they expect work to be done for them immediately. Meanwhile, the developers have already busied themselves with other projects from more responsive clients. This rarely goes well.

      2) Almost every time a project takes longer than expected, the client blames the developers, even when the client knowingly caused the delay through unresponsiveness. If a project were projected to take three months at the onset and you reach month five, it is very common for the client to say, “We’ve already taken two months longer than you said it would take!” A response of, “Well, it did take several weeks to get design approval from you on a few occasions…” is often treated as a lame excuse.

      It’s tough to deal with this problem and I’ve considered ending the relationship simply because a client is too erratic or untimely with responses. To use a real-world analogy, you can’t take an hour to answer a waiter when he asks if you have decided on an appetizer. Eventually, you’ll simply be asked to leave the restaurant.

      I’d add this to the six reasons to fire a client, although, to be honest, I’ve only very rarely ever practiced what I’m now preaching. It’s never an easy thing to do.

      2
  16. 29

    Park Firebaugh and James Archer have raised the best points, ones that I have agreed with for quite some time. Whether we are in the design industry or not, clear and consistent pricing is so important especially in this day and age where the economy is recovering too slowly and the job market looks meagre at best. A lot of people aren’t willing to splash out on services that come up to four-figures and even if they wanted to, in reality it may not be feasible for them. I know I certainly wouldn’t even if the designer was great. If a potential client can’t even find the most basic, expected and vital information on your website (and I consider pricing to fit under those categories), to make an informed decision on whether to hire you or not, then they are likely to move on to a designer/service that does. I know I would.

    0
  17. 30

    I wish the drop down menu for Nclud had the age-old pitch option, “this will be an opportunity for exposure!” or “if you do this for us at a discount, there will be future work in it for you!”
    ;)

    2
  18. 31

    Im glad there was a multitude of points addressed in this post. All the way from how much the potential project could cost down to the social aspects such as abuse coming from the client.

    Some of these points I had never even given the slightest thought to until reading and looking back some previous experiences could have definitely been prevented had I read this beforehand. Thanks a ton!

    0
  19. 32

    Great article! But pricing is main difference between freelancer and company.

    1
  20. 33

    Excellent article – thanks.

    The firing of a client brings up how important it is to have an SOW that covers your ass. It’s not if you’re going to need an exit plan, it’s when you’re going to need an exit plan. The bottom line is that challenging clients are hard money. At my company, we define “hard money” as any client who doesn’t allow us to make a deadline, move onto other projects, and keep the cash flowing. We’re like the restaurant business in this way – we need to turn our tables a set number of times per night to make a profit.

    A good exit plan should cover you for when clients push out a phase, and payment – which can kill cash flow. In the past we’ve included penalty clauses for delays, but it’s hard to enforce. Having this simple yet elegant line in our SOW, “If any phase of this project is delayed longer than 10 days, we will bill for work completed to date,” has been a lifesaver for us when it comes to keeping customers on point and our cash flow positive. Most businesses do not go under because they’re not profitable – they go under because they run out of cash.

    4
  21. 34

    this error is shown in blue theme find out the solution

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    help me out

    -17
  22. 35

    What a valuable article, and comments too. Thankyou. It’s food for thought and I’m looking at my own business in a very different light as a result of it.

    It will sound insane but I’ve never issued a client with a contract (and yes, I’ve had reasons to regret this approach!!) But what I wonder is, for a company like mine who mostly deal with clients over the web, coming face to face with them rarely if ever, how can they sign the contract?

    0
    • 36

      I’m not sure about other countries; but certainly here in the UK, a contract does not require any signatures for it to be valid and legally binding. All that is required is written confirmation that your client accepts the terms of the agreement. (An e-mail is acceptable)

      Although most of our clients are UK-based companies. Many of our projects have been for their overseas branches… so we often face the issue of not being able to realistically obtain a signed contract from the client. So what we do is, send the contract in .pdf format as an attachment to an e-mail and ask them to reply confirming that they have read and agree to the terms. (make sure they quote the contract reference number in their reply) and then we print out a copy of the contract along with the e-mail conversation and file them away together (we also archive a digital copy). Our legal team have assured me that this process is sufficient should we ever need to take any legal action.

      You should ALWAYS have a contract in place before you start any new project. We never start working on a project until we have received confirmation from the client that they accept the terms and conditions. Yes it can be frustrating for both parties at times, but in the long run it is the best solution.

      Don’t let your clients be put off by legal documents, they are there to protect them as well as you!

      Hope that helps!

      1
      • 37

        Thanks redrock, just what I was looking for. I appreciate the guidance.

        0
      • 38

        I agree a fantastic point. I don’t know how legal systems of other countries work but another fact to remember is that in the UK only persons aged 18 and over can sign a contract so it might sound like its never going to happen but be safe and make sure they are the right age too!

        -1
  23. 39

    Cool article and comments! All the same here in Hungary… but I was shocked at the prices. The price range here is about 500$-5000$ as freelancer, and companys work for 5000$-20000$. Almost every customer (small companies) thinks that a website is max 1000$…

    3
  24. 40

    Just brilliant, I’ve always wanted to lay it right out on the table what size / price projects I want and this gives me lots of nice ideas how to finally do it!

    0
  25. 41

    Good article, think a lot of people who work for small companies will be shocked at the prices some agencies charge on here. Its tough out there at the moment and any man and his dog seem to be creating website these days.

    0
  26. 42

    Great, great article! Love the specifics. We have “fired” clients several times in the past and have always found that it was the right decision for us even if it was difficult to let go of the income. It is always better to go with your gut and if you know things are not right to end it on the right terms.

    0
  27. 43

    GraphicDesignBoss

    January 16, 2011 4:22 am

    Really interesting article Uzi,

    Talking about price upfront is also a clever positioning statement. It says ‘we are expensive and therefore we are good’

    Being your own graphic design boss and having bad clients isn’t always a negative. It can be a great learning experience in terms of future management of clients, you can use your experience to help you next time a difficult situation arises with a client in the future.

    My old boss gave me an absolute gem when I was learning the ropes. She said that your worst client can be your best teacher.

    0
  28. 44

    We’re a digital agency that builds web and mobile applications and our project prices and rates are directly in line with some of the others in this article and comments. We have spent the last year distilling and articulating our core values and tending to our own company culture. We completely subscribe to the ‘right fit’ concept for our clients – it’s best for both our staff and the clients we care about. Even though it’s difficult and frightening, we’ve had to fire clients and pass on work because our experience has shown that certain projects and clients will end in tears. Since we’re not married to the cash flow of any one client, this gives us the creative and financial freedom to not worry about abusive relationships or educating uninformed people about the very basics of technology or how to work with creative agencies. We field several calls a week from people who have an idea, but a tiny, almost non-existent budget. I try to refer them out to some of the universities around our area because I don’t want any of our professional peers getting stuck with a bad client and the students can get paid a little to build out their portfolios.

    Three things that have dramatically cut down on potentially unprofitable clients are 1) We’ve make it very clear up front that we don’t ‘partner’ with clients (essentially, they want you to work for free for a cut of the future revenue but they don’t act like partners when you make suggestions). 2) We charge for our Discovery because the deliverable result is a functional blueprint for their project and a very specific Statement of Work. 3) We ask them to to talk to other similar shops so that they know that we are well within the range of acceptable prices and performance parameters.

    One last word on setting client expectations: if a potential client tells you they already know what they want and just need you to build it cheaply, we tell them that we are architects and craftsmen, not day laborers and we charge accordingly.

    Marc Nathan

    2
  29. 45

    Great article!

    0
  30. 46

    It’s really interesting to see the prices displayed above.

    Clearly these prices are for strong branded companies. Companies that a: make a lot of money, and b: have money to spend, and c: are after a very high end product.

    Most freelancers are working on smaller sites. I run a design studio in Australia, and our average price for a static ‘brochure’ site runs around $3k. Add in a custom CMS for editing their content and adding news for an extra $1k. For a fully blown database driven content site with articles, news, blog, photos etc, around $6k.

    Thing is, many of our clients just aren’t even prepared for that $3k. I have had clients hesitate at anything over $2000. Most clients, particularly in non large metropolitan areas, just don’t understand the value of high quality web design/development.

    If I put a drop down on my web site with the minimum price starting at $10k, I wouldn’t get any work – and that’s not because I can’t get bigger clients, but because most of the clients in my area simply couldn’t afford it.

    1
    • 47

      totally agree…
      there is bigger world out there that has multitude of projects that just don’t have massive budgets… sure, some companies might have few bigger clients, but i havent come across that many developers that constantly land those projects all the time. anyways.. awesome to hear that some can do it… you must know something that I don’t.

      0
  31. 48

    Very interesting article with (many) sensible approaches to qualifying clients. However . . . it’s also one of the most noteworthy examples I’ve yet seen of the disease of “entitlement” that is becoming far too commonplace in the web design business.

    Perhaps you could walk a mile or two in the client’s shoes before so crassly treating them as a nothing more than a meal ticket. You would quickly come to understand their difficulty finding a trustworthy site designer who isn’t going to overcharge (or underdeliver) for the work.

    In my case as a consultant for a medium-size non-profit, I conducted a thorough 6-month search for a suitable firm to take on a complete redesign with a maximum budget of $25,000. Yet, we received quotes starting at $27,000 up to $50,000 for a clearly defined set of limited requirements. I live in a government town where income expectations are somewhat inflated, so I expected higher pricing. What a joke! And when did web design deserve higher billings than print? There are way less consumables and studio overhead for which to account.

    Web designers should climb down from their high and mighty places and attempt to better understand how the little people live. And designers wonder why WordPress is so popular! Get used to it.

    -2
    • 49

      You make a fair point regarding a client’s difficulty when choosing a reliable Web Design studio; There are literally thousands of us to choose from. Often I am asked “what makes your studio better than studio XYZ down the road?” and it’s a difficult question to answer when, to the average client, we offer the same end-product at a higher price.

      I often use the common analogy with the Automobile market… to someone who doesn’t know very much about cars (My Mum for example) a Ferrari does exactly the same job as a Ford Focus. They are both vehicle’s that can get you from A to B, they both take the same (or similar) fuel, they are both operated in exactly the same way, they both have four wheels etc… Yet the price differences between the two are astronomical! Why?

      - Most people don’t have a problem understanding why a Ferrari is more expensive than a Ford Focus (except for my Mum). So why do they have a problem understanding that a large, fully featured, custom designed website that will maximize your profits costs more than your average WordPress template? The end-products are not the same.

      **Disclaimer; I am in no way suggesting that my design studio is the “Ferrari” of the web design world. I just referenced it for comparative purposes.

      Secondly, to address your statement;

      “And when did web design deserve higher billings than print?”

      You are absolutely right; the overheads for Print a far higher than those for web, but not at the studio level. It is the client that ends-up with the huge overheads!!

      For example; we have just completed an online Catalogue website for a client. The website features 25,000+ unique products, which are changing price and model numbers all the time. Prior to coming to us, the client would distribute 100,000 copies of a printed catalogue annually. Each catalogue was roughly 1,500 pages of A4 – Their print design agency (not us) would take-on the design work only for a modest £25,000 for 3 months work, to produce the catalogue in high quality .pdf format.

      Then our client would take the completed design to the printers… I don’t know the exact costs, but lets assume it was another £25,000 for printing 100,000 copies of a 1,500 page catalogue. Then once the printing had been done; the client would then need to distribute the catalogue to 100,000 businesses across the UK… he told me that distribution cost them about £50,000 every year.

      So lets look at the total cost for one year:
      Design Agency: £25,000 – 3 months
      Printing: £25,000 (approx) – 1 month
      Distribution: £50,000 – 1 month
      Total: £100,000 GBP per year – 5 months

      Now compare that with the website we built for them;

      It was a 4 month project and cost the client £60,000 GBP in total (including training of their saff)
      + £300.00 per year for hosting and domain management

      They can update this site as often as they like at any time throughout the year; there are no printing or distribution costs, no limitations on the amount of images/content they can share with their customers and they are not restricted to just 100,00 businesses, they have a far greater customer reach. We hope the site will last them at least 5 years before updates are required. So, comparatively that’s a saving of £440,000 GBP over five years.

      You get the idea.

      That is why websites cost more upfront than printed media; They are a more efficient marketing tool over a long period of time. i.e. Equal or higher return for less cost.

      P.S. I know that there are other aspects that I haven’t addressed here, i.e. online marketing strategies, new staff to manage the website, and increased profits due to further reach etc.. but overall, the costs of producing and maintaining online media is far cheaper for the client than printed media.

      4
    • 50

      wordpress is what will drive the competition down… i can see that…
      development process for small to medium sites and even super large sites (New York Times, CNN anyone.) can be a lot more streamlined and there is a great deal of knowledge and resources to modulate anything you put your mind to.

      0
    • 51

      In addition to what Redrock said, there’s also other conditions that print media doesn’t have to deal with, such as medium size and cross-media capabilities.

      Print has it easy in this area, because they’re generally stuck with standard sizes, or at least predictable sizes. A design will only ever be on 9×12, for example, and if that ever changes, the designer will know in advance what that will change to.

      Web, on the other hand, ranges from 3″x3″ to 60″ TVs and beyond, some portrait, some landscape, and no one wants the horizontal scroll bar, nor do they appreciate foot-wide gutters. Web designers and developers are expected to support an increasingly large number of devices and screen sizes/resolutions, most of which we’ll never even know the sizes for.

      And don’t get me started with differences in browser capability, especially if the user expects IE6 compatibility (or even worse, NS4, AOL9, or other ancient browsers).

      1
  32. 52

    Excellent article!

    Thanks for the reasons that are respectful to express we could not continue working along. Nice to know I should search for someone else to enjoy with the project.

    0
  33. 53

    Uzi, I think it’s amazing to write from this perspective. Usually we designers are so busy trying to snag clients that we sacrifice our own priorities in the process. Thanks for giving me a reminder! I had one such client like this, but thankfully he never called back after halfway working on a project.

    0
  34. 54

    Great article indeed!

    I lost lots of money/time to many clients, because of no contract … got a lesson here, surely.

    0
  35. 55

    Great article to read! I’ve made some big decisions on accepting/firing clients in the last few weeks and have to say thay all had to do with the “Five reasons to fire a client” mentioned above.

    0
  36. 56

    In this time you can afford to choose clients?!
    Not on the planet where I live.

    Recycling recycled, and again and again…
    Give us some fresh topics.

    0
    • 57

      Considering the most difficult of clients can actually lose you money? You bet I can afford to be picky.

      1
  37. 58

    Great article! As an architect I will copy and use these principles at my office!
    They say that architects are like whores; as long as they pay, you will do whatever they want. I myself feels like I have been rape.. not a good feeling!

    0
  38. 59

    I work for a small web design company that is facing most of the issues addressed on this article. We have been coming up with solutions that directly align with what Uzi outlines.

    I understand that there are people out there that need a website, but are not the most “Tech Savvy” when it comes to terms and format. But the resources out there are limitless. It’s not a good Idea to hire someone internally to maintain your website when they have no previous experience doing so. Keeping up with the times is not the designers responsibility.

    I would never go into a car dealership, put 40k down on a beautiful new car, and then ask the dealership to teach me how to drive it.

    Okay, maybe that’s a little extreme, but hopefully you get my point.

    0
  39. 60

    This is a great article. Satisfying a Client and your self is complicated. However refining your skills in effectively communicating with your client can smooth the process. Knowing your Client and their goals can strengthen your relationship with them as well establishing realistic goals that also involve your Payment Schedule. One crucial topic I learned from this article is that you should not be a slave of the project, considering dropping the agreement when the customer is abusive or disrespects your personal time, even if you loose earnings.

    0
  40. 61

    This is great advice. So much stress can be avoided by choosing your clients carefully and if things aren’t working out – know when to say goodbye.

    1
  41. 62

    Choosing clients becomes tricky if your company is too big or too wannabe concidering it’s operating circle and location. I work in an advertising agency with 13 other people in a finnish coastal town of 80 000 people. We rent an old stone building right in downtown (expensive), we have a car of our own (expensive, not needed), we own our server (expensive, we’d be better off renting it, we pay expensive data insurance), we own all our computers and worstations instead of leasing them (which is why they are out of date), etc. In other words: we are broke, and we need every penny from every client, no matter how difficult the client.

    Could it be, that if our company was more downscaled and cut some costs, we wouldn’t need all the bad customers and we could focus on the good ones?

    This is a great article which I enjoyed reading, but I hoped maybe some underlying reasons for a company being tied to bad customers would have been discussed too.

    0
  42. 63

    Great article, especially at the start of a new year. I agree with Simon J. that choosing can be tough if you’re trying to grow quickly or have a lot of overhead that isn’t accounted for, especially in these times. Every agency really needs to have a big pile of “f-u” money to allow it to fire the bad clients and spend more time on the good ones.

    Of course, that’s far easier said than done- especially when you’re trying to grow your agency.

    1
  43. 64

    On the client vs designer debate, one cannot really win. Arguing who’s right and who’s wrong is like debating which is better—coffee or tea. Just as there are ‘unacceptable’ (by whichever definition you choose to use) clients, there are also unacceptable designers.

    One of the most important aspects of any relationship is compatibility. So if you’re a client with a budget of $2000 and the designer you’ve been put in touch with charges between $10000 and $20000, do both yourselves a favour and move on. The same applies to designers who meet clients with a ‘different’ expectation/attitude/etc than one’s own.

    Don’t walk into a BMW showroom and lament that Toyota prices are cheaper. Take it or leave it. Work with someone/something compatible and enjoyable to both parties.

    Don’t date a tall woman/man if you really prefer a shorter one. Ya dig?

    2
  44. 65

    I have to agree with Scott Richardson. We are a small UK based company and we charge anything from £1000 (about $1600) for small static sites to about 5 or £6K ($9.5K) on custom built CMS sites. I think the largest project we ever quoted on was 25K ($40K) but that was more than the client could afford and the biggest job we have actually taken on was £8K ($13K). This is all we can charge where we are based. If I put a drop down on our site saying : How much have you got, 10-20K, 20-40K etc not only would our company go bust but we would be the laughing stock for it. About 50% of the clients that we do not win over are those that simply cannot afford us, and they end up going to our much cheaper competition that work on templates and hire low skilled people from overseas.

    We are based in a small city. We are actually the most popular web design company in this city but those prices are way out of anything anyone here can afford. I know in London design companies charge more than double what we do, in fact in some cases triple and much of our work comes from the fact that many companies in London city can’t afford the frankly ridiculous 30-50K per website that some people charge. This is not a con or a game people, we are practising a craft as do doctors, artists, technicians, architects and the like. I didn’t choose this career to make lots of money, I chose it because I am passionate about it.

    Blue Flavor’s pricing guide above is just plain crazy. A small set of html/css templates: $6K! Content migration: $5-15K! WTF? A Minimum of $5K for some copy and pasting probably done by a small team in India!

    Lets just make numbers up shall we. My next client conversation will go as follows:

    Client: So you have read the spec for our 5 page site, what do you think? How much?
    Me: Million.
    Client: Pardon?
    Me: Million pounds.

    4
    • 66

      Ciprian Borodescu

      January 26, 2011 9:16 am

      Harry this is a realistic approach and I respect that because this was the situation for us too. But it comes a time when having similar Forty principles really pays off. And in the end it’s also a matter of economics: if you have smaller projects you’ll have scattered resources and this is not that efficient; if you have larger projects, you’ll need to hire new resources which again is not efficient as the overall outturn might decrease.

      0
  45. 67

    Great article. I like the self-qualification tips. Next time I use your tips.

    0
  46. 68

    I do agree that small fishes are the hardest to deal with.

    1
  47. 69

    Useful article but you never know when a good client turns into a nightmare.

    1
  48. 70

    $40k for a “typical” website redesign?!
    Are these people out of their mind? What a rip off.
    “Very small project” under $10k?!
    Rrrrright… these people need to calm down.
    USA in general and AUS on a smaller percentage, are the most ridiculous markets when it comes to web design… completely over priced and overrated.
    European web design is far better in quality and creativity, yet the prices are at least 50% less.
    That’s probably why Europe has the biggest and most productive design agencies. Of course you should refuse uninteresting or underpriced projects, but unless it’s something mind-blowing and exceptionally hand-crafted, a smart company (medium-large) will end up staying away from those markets and optimize their budget elsewhere.

    -1
    • 71

      Yog-

      You are correct, 40k IS a ripoff for a website redesign, but only if you are a small business like Bob’s flower shop down the street. You obviously are inexperienced or very young. Have you ever dealt with a “medium-large” client before (fortune 500 perhaps)? Since you probably live with your parents still and $10/hour is all you need to buy your video games or whatever, I can see how you would be surprised by that figure.

      I wish I could get the CMO of BMW on the horn so you can tell him how a “smart” large company wouldn’t dare pay anything over 40k for a website, and that he should fire his Ad Agency stat and hire a tiny web shop in Europe. Then he can allocate those millions in marketing dollars elsewhere. You seem to know much more about this new fangled internet thing than anyone else.

      Oh and also…European design is far better in quality and creativity? Europe has the most productive design agencies? Right, and also, women have smaller brains and all European men are homosexual. Non-fact based generalizations are a blast.

      5
    • 72

      There are all sorts of projects. :-)

      0
  49. 73

    I’m afraid if I do this, I will price myself right out of business. I’m just starting a business with another developer and we have two clients currently. One for $3500 and the other at $7500, not too bad but it’s nothing near this amount. I’d love to increase my prices but im just afraid that no one will want to use us for that amount of money. The $3500 client was complaining that $4k is too high! That and not enough people know about us. Any suggestions? Thanks.

    0
    • 74

      Austin, in the same boat, Ive been doing web design for 6-years, and still yet to get a client even over 3k for a site.!

      0
  50. 75

    I agree this article in every point , now I’d love to hear some advice about a customer who is bothering, just because I didn’t want to work with him tired of late payments, abusive requirements and everything discussed here, I have a document signed for him accepting the end of the working relashionship but he keeps on threathing me for things not related with my work but the new agency, which those guys are not so ethical.

    0
  51. 76

    Referencing David Thorne’s prank story in your conclusion without checking it’s authenticity, when David is a well known Troll and mischief maker was a bit lazy… David’s fake email exchange with me was 100% concocted by him, and purely designed to damage my repuation, and he continues to do it to others. Wise up, please.

    see:
    http://hburgnews.com/2011/03/0

    “OnJanuary 25 Thorne published what appears to be his email conversation with Ganev. On Thorne’s site, Ganev appears to insult Thorne, and Thorne one-ups him with witty comebacks.” – Thorne’s post went viral. It has been passed around Twitter and Facebook an untold number of times over the past month. (Thorne estimates his website receives around 140,000 unique visitors on days he publishes new stories.) – However, Ganev denied that Thorne’s account is even remotely accurate. “I never wrote any of those emails,” Ganev said.”

    0

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