March 12, 2018 All
Negotiating like an American to Make Sure Everyone Comes Out Ahead
Congratulations! You’ve followed our proposal process, and the client has selected you as their future digital marketing agency! It’s been a long process full of proposals and presentations, and interviews, and winning the client is a great sign that your process is working and you’re on the right track. But don’t celebrate just yet! You still need to negotiate the contract and finalize the deal.
What Terms Still Need to Be Worked Out?
You might be thinking “Come on! We’ve already talked about pricing, and we know the scope of work they want and what they’re looking for. What could go wrong?” Well…A lot could. You may have already worked out monthly pricing and scope of work, but what about contingencies for added work? What happens if you create something for a client (a blog post or an ad) and they don’t like it? Is the revision free? What if the scope of work (say with PR) requires the creation of an article for a media publication in your client’s industry. Is that article included in the PR budget? Or is it separate? What happens if the client decides to change their paid ad budget? Does your fee increase/decrease accordingly, or is it fixed no matter what? Can your client reduce the scope of work, or do you have a minimum monthly fee?
All of this should be specified in the contract. In general, most businesses in the US are very customer service oriented, especially high-value, high-price businesses. Your client will expect things to work out in their favor if there is a disagreement. If you negatively surprise your client with an extra fee they weren’t expecting, they will feel like they are being taken advantage of, and your client relationship will suffer. At the first sign of trouble, they will use it as an excuse to leave your company, and will be sure to tell all their friends about what bad business practices you use.
Don’t let this happen. Do not negatively surprise your clients! Lay out any additional fees and all contingencies in your contract to avoid this.
Terms you need to specify in advance
The terms you need to specify will depend on what services you’re offering, the size of your client, and some other factors. This is by no means a complete list, but these are some things to look out for as you draw up your contract.
Pricing & Payment
- How much will the services cost?
- How often will payments be made?
- Will payments be made before the services are performed, or after?
- What happens if a payment is late?
- How will additional services requested by the client be handled?
- What if the client wants to reduce services?
- Is there a minimum dollar value of services per payment period?
- Is payment results-based, or a fixed cost?
Duration of Contract
- How long will the contract period last?
- Can it be cancelled at any time?
- How can the client/the agency cancel services?
- How much advance notice needs to be given to cancel?
- What if the client wants to put the contract on ‘hold’ for some reason?
- Does the client get revisions of blog posts and ads? If so, are they included in the original price?
- What if the client doesn’t like a blog post or ad that has already been agreed upon and produced? Who pays the extra charge?
- How many created ads does the client get? If you run their adwords account, can they ask you to create hundreds of ads to test them all? Is there a limit to how many campaigns you will create within the scope of services?
- If you miss a deadline, what happens? Does the client get some kind of credit in return? (hint: client’s will love it if you offer this, because it’s a great incentive for you not to miss deadlines. And remember, time is money in the US!)
Scope of Work
- What work will you provide? What does this work include? What deliverables will you promise the client?
- Can the client increase/reduce the scope of work as needed?
These are just some of the things you need to consider when drawing up a contract. You should cover as much as possible, and also include a clause for what happens when things that aren’t covered explicitly in the contract come up.
I made a mistake. I forgot to put something in the contract, and it should be an extra charge. The client doesn’t agree. What should I do?
You can’t predict everything. If there is a disagreement with the client over extra work, an extra fee, or anything else, remember, if you didn’t specify the extra fee explicitly in the contract, it is your fault, not theirs. Otherwise, they’ll be mad, and you’ll lose a customer.
When this situation arises, just do the following:
“I understand we haven’t talked about this situation before. We do need to charge an extra fee for this service for our clients, as it takes a lot of time and effort to complete. However, since we clearly had a miscommunication, in this case, we’ll perform the service free of charge. I will have to ask you to pay if this comes up again in the future though.”
This is an easy way to make the client happy. They get a free service that they would usually have to pay for, and you get the understanding that in the future they’ll pay for it, and they’ll still be happy with your agency. It’s a win-win.
Send Your Client A Professional Contract
Remember, if English isn’t your first language (and even if it is) get an editor or English speaking lawyer to look over your contract for you (hint: Writesaver does a great job). Small mistakes can make a huge difference! We’ve seen contracts where small word choice errors lead to big misunderstandings. And clients hate misunderstandings.
Keep this article in mind as you negotiate the terms and write the contract, and you’ll be setting yourself up for a successful and long-lasting client relationship.
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