The other week – and for only the second time in 10 years – a customer declined to pay an invoice. I’m not going to go into the reasons – it wasn’t an especially acrimonious discussion, and it boiled down to a mis-understanding more than anything else, but still – it burnt for a little bit. But, in my new spirit of positivity and productivity I swiftly (enough) decided to see what lessons I could draw from it.
1. My business is very much dependent on the trust I build up
Over 10 years I’ve built up a lot of credit in the ‘trust’ department. People trust me to do a good job, to do it on time, and to do it for a price commensurate with the value I provide. In turn, I trust them to pay me. I also trust them to recommend me to their networks, I trust them to speak well of me because word of mouth is probably my biggest single marketing channel.
But the relationship between that trust and my income is too closely linked. Everything is based on a one to one level. I earn the trust of one company or individual, and one company or individual repays that trust (financially and socially).
I’m wondering if there’s a way to introduce a multiplier here – a way to leverage that trust relationship so that the benefits are far greater than one to one.
2. I am still largely trading time for money
Most of the work I do trades time for money – I put in a number of hours, and I get paid in more or less direct proportion to those hours. I’ve talked (to myself, to colleagues, to friends and family) a lot in the past about breaking that relationship, about charging more on value than on time – but it’s always easier to talk than to do (although this short, free, e-book: Breaking the Time Barrier would help anyone looking to do that), and, apart from a few notable exceptions, I haven’t been particularly successful with that.
I’ve also started making money from the by-products of my business – and have done that with some success, both with the website hosting I offer my clients and with the email marketing. And those work well.
But if I want to achieve some of the financial goals I’ve set, then I need to make a greater break from that time:money relationship. That means some different ways of monetising my services – whether that’s through better application of the ‘charging by value provided’ idea, or by packaging my knowledge in more saleable chunks – like with the For Website Owners book I’m writing.
The change is coming – it’s just figuring out how best to make it.
3. What kind of customer do I want?
I’ve often wondered whether it’s better to have a small number of high-paying clients, or a large number of low-paying customers. Swings and roundabouts. My business is entirely built around a small number of clients. I typically prefer this – fewer relationships to manage, I feel like I know each of my clients personally, and even the ones whom I’ve never met, feel like good friends. (Often, especially the ones I haven’t met!)
If you’re selling products or services to many thousands of people, what different issues arise? Well, customer ‘hate’ is inevitable – you’re always going to get people taking advantage of the anonymity provided by the internet to dump on you, your services, your family, whatever. But there’s also a degree of anonymity afforded the product creator – a remove from the day to day interactions, the meeting and greeting, that go hand in hand with a client business.
I know many web designers who have moved into building web apps – wanting to get away from the client cycle of agency or freelance work. They’re then surprised that trading a few customers for many, many customers hasn’t solved their problems.
So the lesson here, I think, is to figure out who the customers are that I want, and build something for them. Whether that’s one of me to a few customers, or one to many, whether it’s one really big thing, or many many smaller things. You’re going to have a better experience working with the customers you want to work with than with the customers who you’ve fallen into working with.
I’m only just beginning – but I’m working on ways in which this business, the business of web design with TickTock, can be more enjoyable for everyone involved. Hurrah!