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Tom Pawelek

December 22, 2013

About the Author:

Long time SEO enthusiast, IT & Billing director of FrostSEO UK, involved in dynamic web design since 1996, published in popular magazines across Europe. Huge fan of Star Talk & Burn Notice. Follow at @tmpkn

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Once the invoices for your services become overdue, it’s very easy to loose your temper and rush for the quickest resolution. In this case, haste is the worst advocate, and you have to play it carefully not to fall for its temptations. Smartly executed collections can be beneficial for both you and your customers in the long run.

In my previous article – Preventing the Debts – I mentioned the four most common reasons that can put your customers accounts in bad standing. As far as prevention goes, there is only so much you can do to protect yourself. But even if you play it by the book, the day will come when you have to pick up the phone and make your first collection call.

From the way any company – not necessarily an SEO agency – handles its collections, one can learn a lot about the nature of their business. How valuable of an asset is a single account for them? Are they more focused on quantity or quality of their deals? And most importantly – how much effort have they put into preventing this situation in the first place?

Before we look into the consequences of various collection techniques on the SEO company’s image, let’s start with what is the most pressing matter here – settling the outstanding debt. As I’ve already mentioned in the previous part, overdue invoices cause a lot of headache for the agency, as it has to decide whether to continue providing the service or put it on hold to prevent the costs from growing even further.

One thing you have to realize as an Search Engine Optimization provider is that your service – and therefore your bill – is not considered critical by most people. If you stop running the campaign, no lights will go dark and no websites will go offline. You might not like what I’m saying here, but that is the fact which you need to accept in order to understand your debtor’s situation. Surely, for most online venues an SEO is their to-be-or-not-to-be, but that’s only true if you look at things from a big enough perspective. If a web business owner has to choose between paying an online campaign bill versus paying their datacenter electricity, or employees wages, the choice seems rather obvious.

Realizing this simple truth puts some service providers into sheer panic. The fact that they have no leverage over their debtors scares them into poor decision making. They would stop the service immediately and fire off countless intimidating calls and emails, to make sure they get their monies ASAP. Little do they realize, that by doing so they effectively kill any chance for future relationship with their customer.

I remember using one of the discount courier companies (they get you very sweet deals in dealing with DHL/UPC/Fedex etc.) to ship some heavy VoIP equipment between the UK and mainland Europe. I was using their service for around 6 months, when all of a sudden I received three emails and one letter threatening to take me to court over an outstanding payment of around £6. As it turned out, one of the packages I had dispatched 2 months before, had wrong weight declared, which caused the final price of transportation to be higher than what I was originally charged. By the time I received the letter, I already had the difference covered in my next shipment payment. I called the company and asked them about the logic of trying to scare me off, even though they have my regular payments for services on file. The person I spoke to failed to notice any flaws in this procedure and neither did his manager. Therefore, I decided to move my business to a different company, offering similar services. In this terrible attempt to recover £6 they lost an account worth around one thousand times more.

Then, there is the other side of the coin. Most IT freelancers, from graphics artists, through web designers to SEO specialists, have had the experience of working with someone who planned to plunder their services in exchange for countless promises of payments, shares in new exciting enterprises, and other exotic assets. Once you realize that is the type of person you’re dealing with, all bets are off. If you were played from day one, the chances for peaceful resolution are weak at best.

But here’s the catch: usually you don’t know there is a trickster on the other side of the keyboard until it’s too late. Your job is to balance between the slack you cut your customer and the borders which cannot be crossed, to secure that little amount of play you have left.

So what are the rules of successful collections? Let me gather my personal experience of dealing with IT customers from both EU and the US into the following list of do’s and don’ts.

DOs

  1. If you already have an ongoing relationship with the customer, i.e. this is their first payment that’s overdue, you can offer payment in installments. The key here is to make sure that the whole outstanding debt is settled before the next monthly payment is due. If that cannot be achieved, look at the next tip.
  2. For long-standing accounts you should agree on offering a payment vacation, while putting the service on hold. You have to ensure that reducing the SEO effort (to cut your cost during this period) won’t harm your previous efforts. Typically 1-2 months should be enough for the client to catch up on his finances, while still leaving the window open for you to pick up where you left off.
  3. Remind your customer about the perks that come from keeping his account in good standing. Perhaps he signed up for a combined offer, like one of our SEO Packages, and simply missed those elements when evaluating his bills to pay. Be sure not to turn it into a threat, as mentioned below.
  4. Rather than completely letting go of the income, push for smaller, but regular payments (like the installments mentioned before). If your customer is struggling with his finances, it will be easier for him to deal with small (even symbolic) outlays over a period of time rather than coming up with the whole amount at the end of the period.
  5. Be consistent and stick to your agreed arrangements. Make sure your Customer Service team makes a note of every scheduled repayment and gets in touch with your client a day before to remind him of his commitment.
  6. If the worst comes to the worst, and your client simply goes bankrupt, your job is to stay professional. First, look at the complete history of his account and do a final balance. Then, plan your communication depending on the customer type. If it’s an enterprise, there is a high chance there are already local laws in place, which determine how you can proceed to recover your debts. If it’s an individual or a small business, your approach should be determined by the quality of your past relationship with them. Bear in mind, there is usually a reason for people who used to pay on time to stop all of a sudden. If you’ve had no previous issues with the client, giving them a helping hand and providing a long-term payment plan does not only raise your chances of successful collection, but also gives you some good press amongst his friends and business partners.
  7. Search Engine Optimization is not a science, like maths, but more like art combined with advertising. In other words – it’s very nondeterministic and its outcome cannot be predicted with 100% certainty. Sometimes, no matter how hard both parties try, a campaign does not bear the fruits we were all hoping for. You have to make sure you introduce your customer to risks involved in SEO prior to signing the contract – more on this subject in my other article about Guaranteed SEO. When things don’t go as planned, just recall that conversation.

DON’Ts

  1. Never, ever, under any circumstances, make your dispute with the customer a public affair. SEO clients value secrecy above all and by publishing anyone’s information – no matter if they’re in debt with you or not – you would compromise your name for years to come. Avoid it at all cost.
  2. Do not turn the perks your client might have picked up with his SEO Package into a threat. Firstly, the point of adding an extra value to your offer is to attract more customers, not hold your existing ones hostage. Secondly, the word will go out and those perks will turn against you. Thirdly, you need to be better than that – if you followed all the precautions from my previous article, you should have enough arguments on your side.
  3. Do not involve third parties unless absolutely necessary, and only in certain cases: for example when dealing with an enterprise or institutional account. Using collection agencies with individual customers will drag your name through the mud, and any potential gains will be reduced to a minimum by lawyers fees and other fine print charges.
  4. Do not be careless and do not mistake being customer-friendly with being weak. The fact you don’t involve law in your individual collections doesn’t mean your agreements don’t need to stand up. Make sure all your legal paperwork is in order prior to signing your first account.
  5. Forgive me for stating the obvious but do not lie. Do not try to fix your situation by providing fabricated statistics or other manipulative data. These days everything can be double-checked and once you’re caught, your career is over.

Search Engine Optimization will become more profitable for both sides of the deal the longer a campaign remains active. For the SEO supplier, it’s the initial outlay that bears the highest risk. For the client – it usually takes around 1-2 months to experience an increased number of leads along with the benefits. In any case, it is in no one’s interest to interrupt the operation once it has gained its initial momentum.

I hope my personal experience will help you keep your customers accounts in good standing for as long as it takes to conclude their campaigns. At the end of the day, we all benefit from high quality SEO.

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