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Asking Clients for Full Payment Upfront [AQfG]

As part of my A Question for Graham series [AQfG], Chris from PixelHatch, emailed me a follow-up question with regards to an earlier post of mine on the topic of asking clients for the full payment upfront, opposed to the more usual deposit/balance format.

"I read your blog post on charging 100% up front and this is something I'd like to do in the future. In my mind it doesn't make any sense to work on a deposit since it's always possible for the client to just not pay you at the end and there's not really much you can do about it.  

My only concern is that because the idea of a deposit and payment on completion is so accepted in the industry I'm scared of putting clients off. Do you have a particular way that you explain this to new clients without scaring them away? Would be very grateful for any advice."

There's no denying that asking for full payment upfront for a logo design, or any graphic design for that matter, often has this perception of being a rather 'cheeky, and/or taking the piss' method of cash collection. Alternatively, when asking for full payment is not appropriate, I tend to stick with my Deposit & Progress Payment Strategy.

I can only really go on my own personal experience of charging the full whack up front, and hope that this might offer up something useful for other designers who feel this is worth considering.

For context, in my early days, I was simply ripped off too many times by clients not paying the final invoice after I had delivered my end of the deal. A lot of that was a result my own inexperience of being self-employed, but also I had a tendency to over-trust people. What a personal failing, I know…

I tried, over a few years, various methods to protect myself against non-paying clients, but it's simply impossible to do 100% of the time due to the sheer vulnerability of 'putting your idea out there' before securing some, or all of your money. Once you show that logo design idea it simply leaves each and every one of us super vulnerable to being cast aside.

On one hand: some clients feel untrusting towards a designer to pay the full amount upfront (even a heft deposit!), and equally a designer may be untrusting of a client to pay the final balance when it is due.

Where is the trust

My feeling is that if a client approaches you to do them a logo design, then it's simply up to them to find the trust to place in you, not the other way around. Maybe you have a great portfolio, loads of testimonials, a regular and transparent social networking presence, various communication methods etc: all of these things ought to provide comfort to a possible client. If they still have trust issues that you will not deliver, then I wouldn't personally want to work with them in the first place.

Assuming that both parties have done their due diligence with each other: client checking out the designer, and the designer asking the right questions and providing adequate information, then there should be no reason why a client will not consider paying the full amount up front. Other than the obvious: not having that sort of cash laying around, but if that's the case who's to say they will have it 4-8 weeks down the line? If they don't have it all now, who's to say they'll have it a few weeks later, and I do think many clients end up in this problem of hiring a logo designer, paying the deposit but simply unable. or unwilling, to then pay the rest.

Just look at how our society ends up in constant debt by buying things they can't afford with credit and overdrafts, all the time having the noble awareness and intent of settling that debt at the end of the month. If some of us struggle to pay off that card for a new car we have just purchased, then I also slightly worry about the importance placed on paying up for a logo design once it's been done. After all, once it's been done, the designer has shown it to you, the novelty sort of wears off, and you are then faced with the reality of forking up more money. OK, so that's a somewhat cynical view, but it's also not really all that far from reality.

As a materialistic society, once we have what we want and have not yet fully paid for it, then trouble is just around the corner when we are faced with that final invoice/credit card statement etc. I have seen this, been a victim of clients simply not having the funds when the time came, and I just got royally brassed off about it.

Hence the full payment up-front seems to actually prevent more problems than more common methods.

Clients DO like paying all up front

And, do you know what? Since I offered this on my initial proposals easily over 80% of all my past clients have offered to pay the full amount, rather than the traditional 2-part deposit/balance approach. Oftentimes we are talking about a client finding, and happily paying between £1000-£8000 before they have even talked to me on the phone!

Now that is what reinvigorated my sense of trust in people. I have been continually bowled over by the continued, and seemingly lack of distrust, that all my past clients have exhibited towards me. So, if I have worked with clients that have, historically, shown no apprehension whatsoever to pay the full amount up front then it surely shouldn't be such a taboo subject to raise?

Just want to make it clear that I don't DEMAND full payment, although I did go through a period of a few months when this was the case. I provide two options of payment, but with a nice little incentive for a client to pay the full amount. Don't underestimate the hassle some larger companies have when it comes to paying, or having to arrange with their finance department, their own invoices etc. It's been explained to me by more than one client that it was simply case of, paying the full amount up front that is, being easier to arrange than two staggered payments. Plus, of course, they go get a genuine reduction, which the bigger the budget, the more it makes sense.

Advice

So my main chunk of advice, if you are worried about asking clients to pay all up front, especially if the project is going to take a few months, then at least offer both options. When doing so provide ample reasons and incentives for them to pay the full amount up front, but don't box them into a corner.

Once you get your first client accepting full payment, then you'll find more confidence to ask the next time round and so on and so on, which was pretty much the case for me. I certainly did feel cheeky asking for the full amount the first few times, but once the first few clients happily obliged, it became routine.

The other way to try is to simply have a FAQ page that gives fair warning to a client about your payment options before they might even get in contact. They are not forced into using you, or accepting your terms, but they are your terms and your business, and if they want you as a designer then they'll need to seriously think about trusting you. It's mostly as simple at that.

Sometimes my gut tells my I need to tread cautiously with a particular client, so in these cases I might just offer up the Full Payment Upfront, and no 2-part option. Obviously always a risk they'll move on and find another client, but I've learnt to trust my gut and also not sweat it if a client gets narky about your payment options.

I probably have three or so proposal templates, and tailor each one depending on the vibes I get back from the potential client, as well as taking into consideration the budget, scope and length of time I expect to be on it. If it's going to be closer to two months on one logo design project, then I'll make sure I'll either get the full payment up front, or at least ensure I have a staggered Progress Payment in play.

My current proposal layout

I'm continually changing the layouts of my proposals, but the current version shows you how I typically will present the full payment option to the client. You can see that I first offer up the total cost, in this case £3800. Then I choose to provide a standard 2-part Deposit and Balance method with the Full Payment option underneath with a nice little discount as an incentive.

Screenshot 2014-01-02 13.43.48








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Posted By: The Logo Smith: Freelance Logo & Brand Identity Designer.

    


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