Ask HN: Time to drop a client? | Hacker News Reader

Ask HN: Time to drop a client?

10 pointstogasystems10 comments

I have a client who I first picked up over four years ago. As it was one of my first consulting gigs, the hourly was low, $25 an hour. Since then I have gained many higher paying customers. I brought up the idea of raising the price and it was quietly swept under the rug. They are now nitpicking at a minimum of one hour billed for one-off projects. They also are expecting unrealistic lead times (i.e. requesting work to be done within the next two hours at 7pm)

Should I drop them? Any advice would be appreciated.

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One of the odd things about many businesses that involve providing expert services is that clients partly evaluate quality by assuming that high-price providers must have better quality. That may or may not be true, but if you are dedicated to developing your craft, you can learn how to provide high-quality services. Then you should make sure to bill for those high-quality services, to get proper return from your investment in developing your skills.

My wife is a solo-practice businesswoman (a piano teacher). From the beginning, I have advised her always to set her rates as high as those she hears about from other teachers in town. I know enough about her musicianship and her thoroughness as a teacher to know that she is worth as much as any piano teacher in town, and every minute that she contracts for at a lower price is a minute she could have contracted for at a higher price. Over the years, she has had quite a few long-term clients, and she has become quite busy. She is very grateful, of course, to clients she had when she was still building up her portfolio of clients. But whenever she adjusts her rates or her terms, she eventually sends out notifications of the new rates and terms to ALL clients, and the clients she wants to keep stick with her lessons. She has been sufficiently busy for a few years now that if a client balks at terms or conditions, she thanks them for their previous business and moves on. There is no need to keep a bothersome client in a world full of clients who are looking for the work to be done well and are willing to pay for that. Just make clear what terms properly reward you for your skill, and keep your life from being too bothersome, and serve the clients who meet those terms.

>I brought up the idea of raising the price and it was quietly swept under the rug.

You don't "bring up" the new rates, you "inform them" of the new rates so they can plan accordingly. Cheap clients are just not worth it.

You should also add other pre-requisites to your agreements, e.g. 7 day lead time on all work, otherwise rate is 2X standard rate if you are available at all (since you'd need to move existing work to make yourself available for them)

Inform them of these changes in a formal way, and give them an implementation date: As of Feb 1, these are my new terms.

They are now nitpicking at a minimum of one hour billed for one-off projects

For no other reason that this, I would drop them. I do not like having to justify my time after the fact. They hired me because I am the expert, as such if it takes 5 hours to complete, they should have an issue with that up front not after the work has been preformed. If a client tries to negotiate hours after they have been performed, it is the last time I work for that client. The issue is, what if they have a huge emergency that required a good portion of hours, if they nit pick over a few, there is a good possibility in this situation, they will have buyers remorse after the crisis is over, potential stiffing you with a lot of hours, worse yet a lot of hours at a sub par bill rate. There is a high potential for you to get stuck holding the bag with a client like this.

I don't know what kind of work you are doing but $25 is low even if it was a full-time gig, for doing just small tasks its absurdly low, I think you're right to drop them, that they would even expect you to be available for tasks less than 1 hour and then to nickel and dime you on that is ridiculous, you only get that kind of privilege when you're employing someone full time.

Loyalty is a two way street. Many of us have 'preferred' clients who were there during the earlier days, but you need to remember that you were still working hard providing a service to them before and now. As a business, it's up to both sides to ensure and maintain a worthwhile business relationship, unless you're desperate for the money and are willing to compromise.

A few more points to consider:

* As others have mentioned, $25 is very low for consulting. Try shooting for at least hourly salary * 1.5.

* Think of what rate they would pay your replacement given today's market rates.

* You've likely grown in skill and experience from 4 years ago, so your rate should show it.

* There are other ways to show loyalty, such as market rate with 10% discount or providing a value added service.

* The nitpicking and increased expectations comes naturally when you're taken for granted. At this point there's very little you can do to win.

* Opportunity cost. The time you're investing doing work you feel is inadequate can be found looking for and doing better gigs.

Increase your rate. Let them know that 2012 is a new year and every year, at some point early in the year, you increase your rates to reflect the growing cost of living, but more importantly, the growing value of the skills you've acquired during the preceding year. There is no reason you can't double your rates if you have enough clients who are willing to pay at those rates. If they don't value your work at your proposed rate, they'll drop themselves.

I think you should give them a chance to get in line with your other clients. 80/20 principle and all, Get rid if they take up a disproportionate amount of your time vs the revenue they bring in.

Drop them a mail, inform them that your rates have changed, new working conditions, expectations, turnaround time etc details should be attached also. Clearly outline the working process should they wish to keep working with you.

If they can't agree to the new conditions you'll be happy to refer them to other consultants.

You might be surprised that they start to be easier to deal with. I guess it all depends on how much you want to keep them.

You could always find someone with suitable skills to freelance for you. Pass off these clients to? So you keep them, but you don't actually handle their project. Of course you will have to state this to them.

The first thing I recommend you do is increase your self esteem. Respect yourself and the hard work you've put into your craft a little more, and you will never ask this question again.

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