Lessons From Failure: Part Two
In Lessons from Failure: Part 1 we talked about lessons that helped DayCreative grow by finding our unique quality as a company and setting parameters for money matters. This time, we’ll delve into some different lessons we learned from mistakes.
Lesson 3: Sometimes You Fire the Client
It may seem counterintuitive; the whole point of business is that you make money. Getting clients is good, so you should do anything to keep them, “The Customer is Always Right”, etc.
Sometimes you need to fire clients. Disclaimer; in the almost eight years we’ve been in business, this has only happened twice. 85% of our clients are still with us. We have satisfied customers most of the time and we prefer to have a model based on sustained clients, not just one-time customers. But there have been two cases where it was just better for everyone if the client went elsewhere.
The first instance was a client who had a corporate background, and seemed certain that he knew how long media company projects should take and how much it should cost. (Instead of believing what we, the actual media company, told him it would cost and how long it would take.)
On more than one occasion we would tell him up front the time expectation and cost, and he would repeatedly become impatient before the deadline, or question the price. This conversation happened over and over, until once we were working on a project that was more substantial. It kind of slowed down, due to some matters on his end, and to his credit, he came to us and said, “Hey, I’ve gotten bogged down, I know this has stalled, if you want to just bill me for the time you have in it so far, I’ll pay you and we’ll shut it down.” So we did.
It was double what he thought it should be and he wasn’t happy. This was the most dramatic instance, but it made me realize that it stressed me out to deal with him. I felt anxious, it was crazy-making, so basically I fired him. I told him I appreciated the business he had given us, but he always seemed to be upset. His expectations didn’t match the reality of what our business does and was capable of doing for him.
Since then I’ve done it one other time and that time…I did it sooner in the journey than I did the first time. Every once in a while, it’s necessary. Your productivity is enhanced by peace. You might think you can’t put a price tag on it, but you probably can. And it’s probably not as profitable as you think to have stressful clients.
Lesson 4: It’s Okay to Lose Winning Strategies
I started DayCreative in the fall of 2012, and six months to a year in I got involved with Henry Dumas, a business coach. (An all around great guy. We’ll talk more about Henry and business coaches in general in another post soon.) I told him I wanted to grow. I was hitting a ceiling, and needed to hire people to grow, but needed money to hire those people.
We came up with a plan to get clients on retainer, paying us regularly for a variety of services so that we could project our future finances. So I did just that, I performed a variety of services for clients, on a retainer model and…I hated it.
I had a developer working with me, but it was just me at the time. What I found was that people were willing to pay retainers, and it provided regular, dependable income, but it was for doing things I hated, things I wasn’t good at. I didn’t like it, but I thought, If I don’t do this, how will I grow?
During a coaching session with Henry, when I was complaining about this, he said, “Well, what if you just do what you’re best at?” He redirected me and we worked out an alternative route, and even though we weren’t doing traditional retainer work, we ended up getting repeat business for the things that I did want to do. The things I did best. That led to the same outcome I wanted before; reliable income.
We came to know that we could put this client or that down for this amount on an annual recurring basis, and that gave us the financial ability to build a team to do the things that I wasn’t great at. Once we offered those services, done by skilled professionals, in addition to what I did best…we grew even more.
Sometimes a practice makes sense financially, and allows for growth, but the real power of a successful business is people loving what they do, and being good at it. That should be the ultimate goal, and if a strategy works on paper but takes energy away from everyone doing the things they do best, it won’t be a winning game plan long term.
And the best strategy isn’t just the one that wins, it’s the one that allows you to keep winning.