The Digital Tool Factory Blog

Monster-men © by MShades

Have you ever said something similar to

• “If only I had more time to work on that cool record store site before the deadline”.
• “If only I had thought of that function before the client decided to buy that new software”.
• “If only I hadn’t made all those stupid mistakes after working on that project for 20 consecutive hours”.

What causes all of these “If only” moments?  Bad clients.  How?  By taking up all of your energy so you can’t spend it on your good clients.

It’s a lack of energy, not time

You only have a limited amount of time per day –  24 hours worth per day.  You should be billing for your time, and you probably are.

You also only have a limited amount of energy per day – far less than 24 hours worth per day.   Probably far less than 8 hours worth per day (It is not easy to bill for your energy – if you have a good method, please leave it in the comments).

Happily no one needs to be “on” for eight or more hours a day.  All of us go through our working lives in  peaks and valley of mental exertion and that is the way it should be.  The real question is – how are you spending your peak energy?

Are you using that energy to produce something?  Or are you using it to stay awake while the client tells the story of his childhood trip to Michigan?  Or are you using your peak energy to create that new ticket ordering system or new logo?  Or are you using your energy to hold your tongue while the client goes on yet another political rant?

Here’s a hint – if you are expending energy for a client and you produce something, you have a good client.  If you expend energy for any other reason you have a bad client.

Warning signs of bad clients

You have a bad client if they

• Yell, scream and throw things (No, this is not a myth, I’ve seen it)
• Try to renegotiate the contract midway through project for no reason (it’s a unbillable use of energy to deal with)
• Are eager to talk about religion or politics while at work
• Answer every request for details by telling you how important the project is
• Respond to every question over a period of weeks while not actually answering your question
• Disparage and praise your predecessor in the same meeting.
• Ignore the chain of command and lean on your subordinates directly
• Have a methodology they created at their last job that they just assumed was an industry standard (and tell you about at the last minute)
• And many others (please put them in the comments)

The above items are but a small sample, but even if (and you should be) getting paid for the experience of them, they still consume energy that you could spend making something wonderful.

An Example

My last real job had many talented designers.  The one who did the best work was not the most talented, but rather a designer who had a somewhat inflated but fanatically held belief in her creative prowess.  She carried herself as a breed apart, and above the corporate fray.

No one bothered her with excessive emails, distractions or temper tantrums because they knew they would not affect her, because she was so “creative”.  As a consequence, she could spend all of her energy doing great work, which she did.  The rest of them had to endure endless meetings, change orders and “branding discussions”.

I did not recognize the brilliance of this strategy at the time, but I do now.

How bad clients drive out the good clients

If you are spending all of your energy on unproductive work for your bad clients, what do you have left for your good clients?  Bupkus, that’s what.  It’s a horrifying investment of time.  Sadly they go away and find other vendors, leaving you stuck with the bad clients.

In economics, this is known as Gresham’s Law – where bad money drives out good money.  The same principles apply (broadly speaking).

This is part one of the series, the next will be on how to quantify bad clients.

PS – I love my existing clients,  I have had bad clients, and I have gotten rid of them over the years.  My current client base is small, but good.

Editor’s Note

This blog post originally appeared on the Profit Awareness Blog – as that app is up for sale, it has been consolidated into the main Digital Tool Factory blog.

As part of my series on simple business metrics, here is an elaboration on metric #2 – which client has the highest hourly rate.  Calculating this seems simple, and for the most part it is.  You just have to make sure to include all time involved with the project.  It’s easy to omit non-billable time, hopefully you are including practicing  time tracking with some automated software.  You can only raise your hourly rate if you know what your rate truly is.  When calculating the rate, make sure to include all of your non-billable tasks.

Over the years, I’ve found non-billable tasks often include:

1. Meetings
2. Travel to meetings
3. Phone calls
4. Meeting prep (no one ever remembers to account for this)
5. Pitch rehearsal
6. Task disruption – on average, I have found it takes 15 minutes minimum to get back into psychological flow after a phone call or “urgent” email.
7. Project research
8. Client Research
9. New software evaluation (ideally this should be spread out over several clients)
10. Writing contracts and proposals
11. Negotiating prices and contracts
12. Consulting with outsiders (lawyers and advisers) about contracts
13. Status emails

Have I missed anything?

Update: Bill From Coding Out Loud suggested the following points (which I have reworded slightly)

1. Contract review and legal overhead
2. Collections
3. “Goodwill” support, i.e. items outside of the contract but needed to maintain the relationship (like when a client asks for the same file for the third time.).

Editor’s Note

This blog post originally appeared on the Profit Awareness Blog – as that app is up for sale, it has been consolidated into the main Digital Tool Factory blog.