Seriously, if you ever felt alone with this problem: You are not. Look at the people over here on reddit, they all struggle with it.
Fortunately, there are quite a few ways to tackle that problem and retain a healthy cash flow in your business.
Making Your Client Pay Up-Front
This may sound obvious, but one way to get rid of this problem is to make your clients pay before you start to work on their project or implementing a retainer fee.
This is easier to establish with existing clients as they know the quality of your work and you have established trust with them.
However, it is a bit more tricky with new clients. They have never experienced your quality and they don't yet trust you. They will have objections to paying you up-front and you need to overcome those objections.
There are a few common methods to counter these objections:
- a money-back guarantee; plain and simple: If your client is not happy with the work you delivered, you refund their money. We have a 60-day money-back guarantee here at LinksSpy
- Testimonials: a testimonial that speaks directly to the objection is an incredibly effective way to counter it
- Establish rapport: The best way to counter any objection is to establish rapport with your prospects and get them to trust you.
These three methods will carry you a long way in winning over new clients. Here are a few more tactics for each of them.
Tactics for Money-Back Guarantees
I know that money-back guarantees can look scary, they certainly did to me at first. But believe me when I say: I have NEVER been asked for a refund because someone was unhappy with the results I delivered.
Not. a. single. time.
I have it on good authority from my friends that most customers do not ask for a refund. Certainly less than 1%.
Those 1% are meaningless compared to the uptick in conversions(read: new clients) you will get from this.
Think about it this way: If you could get twice as much money rolling in the door, how happily would you refund 1% of that? The correct answer is: "very".
To give your future clients that extra bit piece of mind, you can even refund them 150% or 200% of their investment. This sounds insane, but remember: You're refunding less than 1% of your clients and this won't break the bank.
Personally, I don't offer a >100% refund, but I have heard it working wonders for others.
Another fantastic way to counter objections is to employ testimonials.
The key to success here is to be very intentional about the testimonials you use. You don't want the typical run-of-the-mill testimonial saying "Peter is a fun guy to work with and can drink more beer than fits on a table", you want specific testimonials that speak directly to your customers and counter their objections.
You want them saying something like "After just two months of working with Peter our ROI was 387% and it keeps getting better".
The testimonial needs to stomp the objection into the ground. Then it picks the objection up and slaps it around the room some more for good measure.
To get a testimonial like this, you can't just sit around and wait for it to come your way. You have to ask your clients for a testimonial and you have to craft it for them.
Don't rely on them to come up with something useful. Send them a draft. This helps twofold: a) you get the testimonial you desire, b) it makes it easier for them to give you a testimonial.
Take a look at the testimonials on the LinksSpy homepage! All of them were drafted by me. They are designed to counter objections. Dave's testimonial speaks to the "There's no ROI in this" objection; Anders' testimonial counters the "This will take forever to have any ROI" objection. Both are working magic for me.
If you put testimonials on your website, put in the effort and be intentional about them.
Establishing Rapport With Your Future Clients
The third and probably most effective technique to help your future clients overcome their fear of working with you, is to establish rapport with them.
Give them time to get to know, like and trust you.
Establishing rapport is a long-term effort. You need to make multiple (the common lore tells us: 7) contacts with someone before they will be ready to buy from you. Not only will you need contact them, you need to deliver value.
Before you can start a conversation with someone, you need a way to contact her. The usual way for that is through email, so you should try to get the email address of your website visitors as soon as possible.
For LinksSpy I do exactly that with the little widget you can see in the bottom right corner. The widget offers you a free email course on advanced link building techniques, of course I need your email address to send it to you.
Once you have their email address you can start sending them emails and deliver value.
One way to deliver value is to teach people something new. Remember that your clients don't know a whole lot of SEO – if they knew, they wouldn't see a need to hire you. So start by teaching them the very basics of SEO. Don't try to sell them right from the start, they still don't trust you. Deliver value, establish rapport; everything will work out fine.
The beauty of emails is that they can be easily automated. Once people sign up for your list they will start to receive your drip emails – provided you use a special software for that.
I use Drip to implement this whole process for LinksSpy. Drip allows me to easily add the widget to every page, it manages my list (subscribes, confirmations and unsubscribes) and it also delivers the drip email campaign automatically.
I could write an article about drip email campaigns alone, but I will leave it at that for the moment.
Get Their Credit Card and Automatically Collect Payments
If you are using retainers in your business – which you should because recurring revenue rocks -, there is another way to get rid of late payments. You can simply ask your clients for their credit card and charge them automatically each month. You want access to their credit card, not their credit card details – I'll get to that in a minute.
This depends a bit on the amount of the retainer, because it might go over your client's credit card budget. Try to work with your client, maybe ask them for their limit. Bonus tip: if they show you their black AMEX, you probably shouldn't worry about the limit 😉
Never Store Credit Card Data
There's one thing you have to remember: NEVER store credit card data. The risks of a security breach and someone leaking your client's credit card data is very real.
There is a lot of compliance around storing that data and – depending on your jurisdiction – a multitude of laws to follow.
You are not set up for this and it is not your core business. Leave that work to companies like Stripe.
It is very easy to setup your own payment system with Stripe, if you are a programmer. But I would advice against it if you just want to collect payments from your clients. There is a great service called Plasso that allows you to setup the necessary infrastructure with just a few clicks.
Plasso's pricing starts at $0/mo + 3% of the transaction amount. That means you'll pay 30 cents + 5.9% after you include Stripe's fees. That is quite a hefty percentage, but you can reduce Plasso's transaction fee by paying a fixed monthly fee.
Stop Delivering When They Fail to Pay On-Time
You need to openly communicate this up-front. Don't assume this goes without saying, you'd be surprised.
It should be absolutely clear to everyone involved that you do not work without payments. After all you need to pay your own bills. Your family needs to eat, the rent has to be paid. There's no way around this simple fact.
If someone stops paying you, you go and work for someone who is paying her bills.
There is no shame in asking for upfront payments after someone has let slip a bill. You don't need to feel sorry about that, you have every right to demand it.
This may seem totally unrelated, but the more you charge the less troubles you'll experience with late payments – and your clients in general.
The more you charge, the more you will be valued by your clients. They will interfere less with your work and focus more on your results.
How much they can afford to pay you is also a good indicator of how much they have their stuff together. If they pay you a lot, they usually have an accountant who pays their bills on time.
I have had the same experience while running LinksSpy. People on the higher plans send me less emails and they churn at a much lower rate.
Give it a try and be surprised.
If you have any other ideas how one can get their clients to pay on time, I am eager to discuss them in the comments.