Cash in too soon and you will lose the premium
I’ve always recommended to ask for the money you rightfully earned for the work you did. I mean you shouldn’t be afraid to ask the payment, even if you closed the sale with one of your friends or relatives.
And now, I tell you something different. Cash in too soon, and you will lose the premium. Let me tell you a little story that explains what I want to say.
Early this year, I’ve asked an architect I know to draw some plans for the restoration of my old vacation house I’ve got near the mountains. The architect was from the close network of people I get in contact once in a while – so definitely a person I know.
Ok, so he did 2 plans, from which one was what I was looking for. He was always placing himself as providing services to a friend – and I don’t understand by that working for free, but going that extra mile he wouldn’t normally go for a regular customer. The thing is that after we’ve put everything on paper, I have decided that the moment to start the work on the real construction should be a little postponed until next year and I let the architect know that we haven’t decided yet and we are not yet ready to go. His feedback on this situation was quite neutral for about 2 months, until the moment we’ve got to meet and surprise: he was actually very angry we haven’t paid him for the work he did. He was cashing in the money he rightfully earned. Right. Angrily. And that was a mistake.
First, he never made a statement on the amounts he considered we should pay him. He didn’t make a contract and he never said he wants to be paid even if we never get further than planning. So I got surprised by the amount, by the discussion tone and by the timing. And mostly because the project was only postponed and not canceled.
Yes, of course he earned the money. But he lost the chance of doing more money during the construction times next year (the premium) he lost the portfolio and he lost the customer. Staying with me during the construction would have brought him more money that the plans did. He failed to see that.
I’m amazed by the number of sales a small company could lose by not having sales persons. He was an architect and didn’t know very well how to handle sales. Here it is a better approach:
– first, do not work without a contract or at least without stating very clearly what are your expectations
– pricing is important. Let your customer know what are your prices and when do you expect to be paid
– if the project gets postponed, try to find out why. In my case the reason was mostly about funding. In this days you can sell better by assuming a consultative role. The architect could have helped me out with some advice about loans and stuff. It doesn’t cost him anything but would have helped me and be a value added service.
– if you really need to cash the money, do it nicely. Customers can understand that, and the tone makes the difference.
– propose some options for the payment. Pay now, or later if it brings more sales
– let a sale person do the talking
– ask if there is more business to be done