When Bad Times Happen to Good Clients: Maintaining Client Accounts During a Recession

It doesn’t feel very good to have your client call you up and break the news that they’re cutting back.   But since we are well into what appears to be an ever deepening recession, it’s something you’ll probably experience this year if you haven’t already.

It happened to me a few months ago. One of my clients relies heavily on government funding; about $31 million or so worth of it.  By and large, their programming dollars come mostly from one government agency.  Our city government, like many others around the country, is facing the prospect of furloughs, so millions are getting trimmed from the operating budget.  Naturally, my client’s twice-removed $31 million program ended up on the chopping block.

I knew something was up when I could never reach my  contact directly. When I finally did get her on the phone, she informed me that my invoices were being held up by the funding agency for further review. The funders wanted more details about what I was doing (that hard to define PR work), etc. At the same time, the agency’s financial woes had been leaked to the papers and were all over Internet. I’m no dummy.  I knew where this was going.

My contract, which was actually up for renewal, was put on hold.  One of my specialties is multi-month, multi-year, multi-tier communications and marketing programming, so I couldn’t stop working cold turkey without letting a lot of time and effort go to waste.  Pulling the plug meant that quite a few irons I had in the fire would not only cool, but go cold all together.  A few projects that had stretched out over several months were finally nearing completion. But I was no longer receiving payment, so what was I to do?

I got my answer when a reporter from the Washington Post called me up one afternoon.  I’d pitched my client to her about 8 months before, and had continued to follow up with her every month or so since.  She was calling because she wanted to get my client’s input for a special end-of-year story. Awesome! Just one problem: I technically wasn’t the media contact anymore.

But I refused to let that detail stop me from seeing the process through.   I’d planted the seeds of this coverage so I naturally wanted to take part in the harvest.  So I communicated with the reporter, set up the interview and even prepped my nervous client.  The interview was a success.  My client hit the ball out the park: she gave a great interview, was quoted extensively and came across just as I’d hoped—as her industry’s local expert on this complicated issue.  Everyone at her organization was more than pleased.  And with all of the negative press swirling around the program’s money troubles, receiving this degree of positive coverage was a welcome reprieve.

Then a curious thing happened.  A couple weeks later, I got a proposal from this client to do some consulting for another branch of the organization that wasn’t funded by this city government.   This project wasn’t as lucrative as my original gig, but it also wouldn’t require as much work.  It would tide me over until they got back on their feet.

My client did not have to do this.  I read between the lines.   It was more than apparent that she was finding work for me (and in the process, making more work for herself).  But the unspoken nod to my work ethic was there: she recognized that when push came to shove, I was a professional.  I represented her to the best of my ability with no guarantee of payment. And in the end that professionalism was duly rewarded.

These kinds of situations require that you remain flexible and use your best judgment. Obviously you can’t forego payment every time a client goes through hard times.  But with more and more companies folding or making cuts, the hard times are pretty much guaranteed.  So maybe you should figure out how you will navigate should you find yourself where I did.

Look at the entire situation and ask yourself “Is this a good client?”  If the answer is “Yes,” be flexible.  So I did a little work without guarantee of payment, but in the end it worked out. I was reimbursed and I’m still working with this client. It’s in an abbreviated capacity, but a capacity all the same. And in an economic environment like this one, salvaging the client relationship is sometimes all we can ask.

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