My biz friends and I laugh about the fact that being in business is just a series of potentially awkward and scary money conversations. Unfortunately, these very normal situations are just too much for some entrepreneurs. But don’t let any of them stop you from playing the game of business. Back to the snakes (chutes) and ladders analogy: this is the game!
Just like having people unsubscribe from your newsletter, having to talk to people about money is an inevitable and unavoidable rite of passage. Don’t be surprised when weird stuff happens. The truth is that people will make unreasonable requests all the time! Clients will be demanding and ask for exceptions to your policies. They’ll ask for discounts or freebies. Some will demand refunds and others will default on their commitments to you.
But it’s honestly no big deal and is just part of being in business. The rewards are worth a few awkward moments, and they’re why you need some business besties. Together, you can call or text each other, say ‘WTF!’ and laugh at the audacity of some people. Women often struggle with these money conversations because we believe we have ‘no choice’: we want to be accommodating and ‘nice,’ and we want people to like us. But nothing drains your energy faster than saying yes when you really want to shout no!
You don’t have to make exceptions, you don’t have to help everyone, and you don’t have to feel bad about it (even though the first few times you say no you’ll feel like a mean ole bitch!) It will make you feel better to know that it happens to everyone. I’ve experienced every single one of these scenarios multiple times, and I can tell you that it gets easier. The requests don’t stop; you’ll just get ‘gatekeepers’ who’ll stop you having to deal with it yourself, or you’ll just feel less bad about saying no.
Remember, what scares you today, won’t scare you tomorrow! I’m not a big fan of confrontation, but I’ve some really simple strategies for handling the difficult money conversations that I guarantee you’ll have to deal with too.
‘Balance is not better time management, but
better boundary management. Balance means
making choices and enjoying those choices.’
BETSY JACOBSON
When you’re starting out, it’s flattering to have people ask you for advice. Requests can range from a subtle, ‘Hey, what do you think of this?’ to a blatant, ‘Can you help me?’ These requests will come from friends, family, peers, competitors, and even random strangers. You’ll be shocked how entitled people can get when you start to make a name for yourself. This is where women with ‘go-to girl’ personalities can get stuck because we want to be helpful and solve problems. Any problems.
I used to be everyone’s agony aunt, travel agent, business coach, and general mini-Oprah. That started in school and continued into my working life. I just couldn’t say no to requests for help, and I couldn’t resist solving particularly tricky dilemmas, even if they weren’t my business specialty!
If you’re a go-to entrepreneur, this can quickly result in you giving away your genius for nothing. It’s pretty rare that back-and-forth emails giving free advice turn into paid work. In fact, it comes at a huge cost to you. Most of the time, you actually can’t solve people’s problems over email – at least not in a sustainable way. People need to invest in themselves and solve the problem with an expert – you. So, you’re doing them a disservice by enabling them to keep procrastinating or by putting a temporary bandage on the issue.
The tricky thing about social media now is that there are so many ways for people to contact you: it’s an introvert’s nightmare! These ‘brain picks’ might come in the comments on a social media post, a sneaky private message, or via email, and they can quickly get overwhelming. If a member of one of my paid programs wants extra information on a lesson, I generally say something like this:
Great to hear from you – and great question!
I can’t answer private questions about this course, but if you ask it publicly in our networking group and tag me, everyone can benefit from my answer, and you’ll get input from other members, too.
If the brain-picker isn’t in a paid program, I say I’ll answer the question in an upcoming blog post or, if it’s something that can be solved in one of my paid programs, I point them there. You. Don’t. Owe. People. Free. Information. Your time is valuable, but others will value it only if you do first. A straightforward way to deal with brain-pickers is to:
For example:
Thanks so much for your message. It sounds like you’re in a really challenging situation.
My program is perfectly designed for people in your circumstances and can help you in the following ways [list of benefits].
You’ll find all the details here: [link].
Your reply doesn’t have to be long or apologetic, because the logical next step for brain-pickers is to work with you! Assume that’s what they want in the first place. If you’re getting into long back-and-forths with people asking random questions, then you can create a FAQ on your website and point them to that.
What about people who want to meet for ‘coffee,’ but you know that actually means ‘free advice?’ I prefer to assume they want to be a client, so I send a similar message to the one above.
Great to hear from you, and thanks for your interest in my business.
My schedule can’t accommodate a meet-up, but I’d love to help you out. It sounds like my mentoring package might be the best option for you.
You’ll find details and scheduling here: [link].
If they write back and say, ‘Oh no, I just want to meet you for a casual coffee!’ or want free advice, you can elaborate and say something like:
Thanks for your interest in meeting with me. Unfortunately, I can’t meet because the time I don’t spend with clients is dedicated to my family.
But seriously, if you love meeting with people, do it. It can be a great way to make new friends. Just make sure you don’t coach or mentor them during the meet-up. That’s for your paying clients. Keep it light, and if they ask for specific business advice during the meet-up, you can say something like:
It’s difficult to give advice when I don’t know the whole situation, and I’m not your official coach. How about I send you information about my rates and packages when I’m back in the office?
It’s also okay to protect your time (and your Golden Goose) by saying no. Have you noticed that the people who demand the most free help are also the least gracious? I’ve given advice to people via email or coffee dates and never received an expression of gratitude in return, and often, I had to pay for my own coffee anyway!
Setting boundaries around offering free advice needs to become a practice. The first time you do it, you’ll probably feel mean, but put yourself in their shoes and consider what’s in their highest good. If you have an excellent solution for them, don’t get sucked into giving them a sub-par experience via email or in-person advice without accountability. Hold them to a better standard so they get better results.
I still have to be disciplined about not responding to brain-pickers’ requests. One came through as I was writing this chapter and I had to restrain myself from stopping work and sending them free advice. The truth is: people who want to take advantage of you will never go away. The only thing you can do to prevent yourself from dispensing free advice is to establish better boundaries and redirect brain-pickers to the paid service you offer.
Lastly, see if there’s a reason you’re attracting brain-pickers. Are you afraid to charge? Are you training people to get your valuable services for free by always being available and never saying no? You’re worth the money you’re charging!
Giving people advice for free isn’t in their best interest.
I was shopping recently and noticed something interesting: some brands never go on sale and don’t give discounts.
I found a tiny rack in fashion outlet Country Road marked ‘Last of the bestsellers’ with a discreet discount sticker on each item. The message was ‘This isn’t our crappy stuff, we’re almost out of our most popular stock, and this is your last chance to buy it.’ Then I noticed that on workout clothing brand lululemon’s website, there isn’t a ‘sale’ tab: instead, there’s a section called ‘We made too much.’ They don’t want to be perceived as a discount retailer – especially in their flagship stores – and they don’t want to train their customers to expect regular discounts or to wait until things go on sale.
Maybe you think this is just semantics; however, there’s an energy behind the way you frame discounts. Are you known for always offering a discount or are people happy to pay your full prices? It’s totally okay to say ‘I don’t offer discounts or scholarships’ without having to justify anything! I’m not saying you should never offer financial incentives for your customers, but the way you market them and the reason behind them are really important.
Here are some script ideas for you:
I don’t offer a discount, but if you purchase by [date], you can take advantage of my early bird offer.
I love rewarding action-takers, so I often give a financial incentive to people who buy on the first day, either by offering an actual discount (that’s okay in this case) or by offering a bonus. Here’s the thing: you have to be strict on this. If you don’t stick to your date or quantity policy, you’re sending the message that what you do isn’t worth full price, and you’re training people that deadlines don’t matter.
I don’t offer a discount, but if you purchase my [awesome name] package, you can get six sessions for the price of four. Packages are always my preferred recommendation, especially for service-based companies, because it’s way less work for you and better accountability for your clients. Even though my initial private coaching rate was low, I created packages of six because that gave the best results for my clients. Eventually, I took on only clients who would commit to six months or more. Packages are good for your clients. If you’re realistic and honest about what clients need to achieve excellent results, one session with you just isn’t going to cut it, right?
I don’t normally offer a discount, but because you’re a returning client, I’d be happy to book you at the old rate [or offer an additional bonus]. This offer expires on [date].
When you’ve worked with people before (and only if you liked working with them), you might want to offer a limited-time incentive or added value if they rebook with you. If your prices have increased since they originally booked, your incentive could be that they continue at their old rate – but only if they rebook within a specific timeframe. Bonuses are good too – just follow the win-win rule.
I’d love to offer you the special rate of [amount] if you book by [date] and pay in full.
I don’t mind offering payment plans, but I also love incentivizing people who want to pay in full by offering a slight discount (and some people love that), especially around tax time when they’re trying to maximize their business deductibles.
I don’t offer a discount on that service, but if you buy this package, you’ll save [amount] overall.
I’ve bundled some of my bestselling courses and offered a significant discount on the set. Some people just want all your stuff in one go, so give it to them! As before, boundaries are essential: be firm in your expectations of what people need to do to be eligible for special offers and incentives.
What about your first-ever course or program? Many women think they should offer a trial run or introductory price if they’re new or starting out. You might have heard this called a ‘beta price.’
I’m firmly against this. Why? Because the energy is all wrong. When you offer a beta price, the power dynamic is off. Your participants go into ‘review mode’ and aren’t fully experiencing the true transformation of being a paying client. They feel like they’re doing you a favor and can often be way more critical because they’re experiencing your program as a reviewer not a student. You’ve given them an energetic ‘out’ from doing the actual work.
You can, however, offer a ‘special introductory price,’ which is basically the same thing but energetically different. It feels celebratory, as if people are lucky to be the first participants. Be clear that future customers will have to pay a higher price and stick to it!
Reframe discounts into incentives!
I get asked this a lot, and you might not like my answer. I don’t love pay-what-you-want (PWYW) for services because most of the time, you’re just chickening out of actually setting a price. You might think you’re being generous and flexible, but often your customers spend a lot of time worrying if they are under- or overpaying.
Some people use PWYW as a way to gain approval or test their value to others, and then feel rejected and unvalued by what people choose to pay. With PWYW pricing, you’ll still need to get the offer out to lots of people and, if they don’t take you up on it, that, too, can feel like rejection.
As a customer, I never buy things on PWYW because it forces me to do the pricing work that others failed to do. That stresses me out: just tell me the price and I’ll pay it!
If you still feel drawn to it, here are a few guidelines:
Again, be genuinely unattached – you’ll get people who hardly pay anything and others who overpay. I’ve heard of people paying literally one cent, so go into this with your eyes wide open.
Make sure you’re not using PWYW because you’re chickening out of setting prices.
I wrote about this in Get Rich, Lucky Bitch, but want to reemphasize it: I’m firmly in the ‘no bartering’ camp. Why? Simply put, bartering has a detrimental impact on your ability to earn money, and it’s a trap that too many women fall into.
Bartering means swapping your products and services for somebody else’s without money ever changing hands. It seems like an excellent idea for women – especially at the start of your business, when you have little money. What could go wrong? Plenty! Have you fulfilled your end of the bargain and received something crappy in return? Or did the person you bartered with fail to fulfill the swap at all, leaving you feeling taken advantage of? It rarely works. Sometimes, you agree to a bartering arrangement out of obligation or guilt, even if you don’t need the service the other person is exchanging.
It sets up a weird power dynamic, which is particularly true if you’re both coaches and coach each other for free. Being both the expert and the client is hard and not particularly useful for either of you. If there’s someone you’d love to collaborate with, set up an informal mastermind or accountability group, rather than swapping your services. Respect each other.
The biggest reason I discourage bartering is the symbolism of it. I understand that bartering feels convenient, collaborative, and even ‘post-money.’ It feels warm, fuzzy, and generous to help each other without ‘dirty money’ polluting your relationship. But we live in a society in which women are already financially disadvantaged. Why continue to perpetuate an environment in which we don’t have actual, spendable money?
If you aspire to have a thriving business (and quit your day job), then bartering can stop the flow of money into your business. You’re not open for business literally or energetically. Bartering sends out a message that you’re willing to work for free, and that can cause you to attract clients who don’t respect your prices. It’s a highly symbolic milestone to receive money for what you do and to pay others in return. Trading money is much cleaner than bartering, even if it means you have to do bookkeeping and pay taxes.
You might think it’s more convenient to avoid those things by not ‘complicating’ transactions with payment, but that’s rarely true. Plus, do you see how you’re telling the universe that you’re not willing to create a ‘real’ business because you’re afraid of bookkeeping or paying taxes?
Even with the best intentions, bartering can get messy. For example, I once let one of my affiliates use her accrued commission toward coaching with me. That got complicated at tax time when she thought I owed her more money, forgetting that we had this partial payment arrangement. She should have paid me, and I should have paid her, so we had a proper record. We should have respected the transaction, even if it felt ‘easier’ to trade. Does that feel like an extra step? Maybe, but it can avoid practical problems later on.
If something is worth paying for, just pay for it. Respect the flow of money and each other’s talents, even if it means paying taxes on the income. After all, you’re in business to make money. Taxes are just an inevitable part of that and very symbolic for women.
When you draw a line in the sand and refuse to swap your services, exciting things start to happen. But first, you have to energetically close down free work and declare yourself open for business. Make that decision now. Even if it feels silly to, say this out loud: ‘I am no longer available physically and energetically for bartering arrangements. I declare myself open for business.’
You have to be resolute on this. No more. Not even one more time. Guess what will happen? I’m not psychic, but I’ve seen it hundreds of times. As soon as you make this decision, you’ll be tested on it. You’ll get a request for bartering within the next 24 hours, and a really good offer might even tempt you. This is just a test.
Saying no is a symbolic rite of passage for you in your business and will open up many avenues for you to receive actual money. Think of it as the final test of your apprenticeship. Are you ready to pass the test and graduate to being paid for your skills and talents?
How do you turn down a bartering request (especially a well-meaning or tempting one), and not feel like a bitch? You can say something like this:
It’s great to hear from you, and I appreciate your offer. I have a no-bartering policy because I’m focused on growing my business with paying clients. But I’ll be sure to check out your services!
Clients won’t suddenly rain in because you’ve passed this test, but you’ll feel an energetic shift because you’re really in business now. Barter offers usually come because people see the value in what you do. That’s the good news. The bad news is that, if you say yes, you’re not respecting your own value. When you put a price on your time and energy, you’re energetically aligned with paying clients. You’re symbolically open for business.
If you keep saying no, people will stop asking and, eventually, nobody will ask again. It’s been years since anybody asked me to make a barter arrangement because I’m no longer energetically aligned to that. But it started with me saying no and declaring myself open for business.
Saying no to bartering sends the right message –
both to potential clients and to the universe.
Should you offer what we call ‘mates rates’ in Australia to your friends and family? It depends. First of all, it’s a natural thing to want to help your loved ones, and it’s natural that they’ll want to support your business. As usual, it only becomes a problem if it’s causing you stress or keeping you from making money.
Offering discounts to friends and family can create a potentially awkward situation, but it doesn’t have to be that way if you put a few boundaries in place. The biggest problem arises when your friends and family don’t respect that your skills and talents are a commodity – especially if you’re a service-based business. It doesn’t appear to ‘cost’ you anything to do a ‘quick’ website for a friend or to proofread your sister’s blog, but it does. It’s time, energy, and expertise that you could be using for your own business, to put food on the table for your family, and to free you from your day job.
So, what should you charge them? It depends. What feels better: charging them full rates, discounted rates, or working for free? Check in with yourself and see how it feels. There’s no right or wrong, but it’s a useful exercise to see what objections come up in each of these scenarios.
Some of your friends will be amazing clients who will respect you, and even insist on paying your full rate. Or, if they are getting a discount, they’ll be appreciative, pay you on time, and be a dream to work with. I have friends who I go to for products and services, and I have friends who’ve joined my courses, and it’s entirely cool to pay each other’s full rate. We respect each other as professionals, and there’s no awkwardness.
That’s the best-case scenario. I’ve even told some of my friends not to give me a discount because I just wanted to feel like a proper client who had their full attention. On the other hand, some of your loved ones should never be your clients, even at full rates. They might be demanding, disrespectful, and someone you’d never choose as a client, no matter how much they paid you! (I’ve heard the stories.)
We want our family and friends to succeed, but we aren’t necessarily doing what’s in their best interest by working with them. A perfect example of this is coaching loved ones. You just don’t have the distance needed for that kind of relationship. They’re better off working with someone who can keep them accountable, with a clean, professional relationship. Just tell them that you’re too busy to help – which is true. Even if you don’t have paying clients, you should be spending your time trying to find them!
Friends and family aren’t always the best clients!
If they make you feel bad (and seriously, the audacity!) remind them that this is how you earn your money, feed your family, and pay your bills. Then remind yourself that not charging them will impact your ability to make money with actual clients. Your time, energy, skills, and experience are valuable and worth paying for. Send them the name of one of your competitors, a valued peer, or even a book or course that was helpful to you. But remember, this is your business. You decide whether you work with them or not.
I’m booked out for the next six months with paid client work, so I’m not going to be able to help you this time.
Or: I’d love to help, but I just don’t have the capacity right now.
Or: I have a strict no friends or family policy, but I can highly recommend [name of someone else].
If you do decide to go ahead, here are some guidelines:
Refund requests happen. There’s nothing you can do about it, and aiming for a zero refund rate is just unrealistic. Please, please, please don’t feel bad when you get asked for a refund. It’s just one of those things that happens, no matter how awesome you are, and it’s something to celebrate because it means you’ve reached a new achievement level!
Do you want a strong and steady business? Do you want a six-figure or million-dollar business? Then refund requests are going to happen, baby! Yes, it sucks and it’s unfair. It reminds you of when that kid in the playground said she didn’t want to play with you. But it’s not personal.
In fact, one rite of passage is having a client ask for a refund when you know they loved working with you. They were your biggest fan, then one day they went AWOL or even did a chargeback through your bank without telling you. It’s heartbreaking at first, until you realize it happens to everyone.
Before giving you a script, I want to make sure that you have terms and conditions in place to deal with these inevitable requests. If yours haven’t been revisited for a while, you may want to refresh them. Without a robust refund policy, people can just demand their money back at any time, and for the most random reasons. It’s hard to deal with a refund when you have nothing in writing, which means you don’t really have much power. You’ll need to check for any local, state, or national laws that govern refunds, or even consult a lawyer, but whatever you do, just go sort out your policies: it’s one of those annoying, but essential, things you have to do.
The first few refund requests I received were like knives in my heart. How could they not like me? It seemed unfair when they’d participated in my course and then asked for a refund at the very last moment. I’ve come a long way since then. The reason I can be so chill about refunds now is that:
When it comes to refunds, I highly recommend that you have a ‘bad cop’ on your team to deal with them. It’s hard to be a supportive coach or the expert when you also have to be the Debbie Downer law enforcer. I find that people respect it more coming from someone else too, especially if they have a personal relationship with you.
Having a bad cop might sound like a cop-out (pun fully intended) but remember: being successful in business is finding your path of least resistance. If you need to have confronting conversations, you can try and get better at it, or you can act like a CEO and delegate it where possible!
My policies and my assistant are my ‘bad cop,’ so I don’t have to be. What if you can’t afford an assistant? Well, make one up! Set up another email address for your fictional assistant and answer as them. You might not feel comfortable doing this, but trust me, it will change the way you enforce boundaries in your business. My ‘assistant’ was called Sabrina, and she saved me again and again with her very polite but no-nonsense style, so I could take refunds less personally.
Whatever you decide, here’s a script for dealing with refund requests:
Thank you for your message. We acknowledge your refund request.
We’re ready to honor our refund policy, but before we do, is there any way we can rectify the situation? We may be able to help if we know what the problem is.
Please let us know by [date]. If we don’t hear from you by then, we’ll start processing your refund in accordance with our refund policy.
It’s worth asking whether there’s a problem that can be solved. In some cases, it’s something small, like their course password won’t work, or there’s been a simple mistake that can be solved just by asking. Every situation like this is a chance to save the client, tighten up your refund policy, or simply follow your process and give them their money back. Making refunds easy and stress-free for people won’t increase the amount of refund requests you get. It will, however, give people a good impression of you, and they may purchase again in the future.
I see women get defensive about refunds, want to argue back, or not give refunds out of spite. The simplest policy, in my opinion, is a no-questions-asked one, but with limits around time. Just refund it, bless them, and try not to obsess about it at 3 a.m. Be like Elsa and let it go.
Before we grant a refund, we ask people to fill in a very simple survey, remind them to delete copyrighted course material from any storage devices, and remove themselves from the student forum. We also ask for the reason why they requested the refund – but the honest truth is that I don’t really read it. As I said earlier, feedback isn’t that useful unless it’s stuff you can actually fix. If you can, get someone else to read the survey, otherwise you’ll probably feel really bad. If it’s something like, ‘Your voice is really annoying, and I didn’t like it,’ there’s honestly not much you can do about it. But it could ruin your week. I once had someone say, ‘You are teaching Satan’s tools. You must be a witch!’ Alllllrighty then.
I prefer to be chill around refunds and just grant them without requiring the student to jump through too many hoops. But give refunds a specific timeline. They can’t be an option forever and keep an eye on when people actually ask for refunds. We found most came in the first few days of the course – people often know if I’m their flavor pretty quickly – but then we noticed a lot coming right at the end, which really annoyed me.
We used to have a 60-day, 100 percent money-back guarantee but changed it after a really disheartening experience, which I did take personally. We had a big launch for my Money Bootcamp on October 25th one year. On December 24th, which was the last day of the money-back period, we had a record number of refund requests, including people who had enthusiastically participated in live calls, got personalized advice from me in the private networking group, and raved that the Bootcamp had changed their lives.
Merry fucking Christmas to me!
It was obvious that some people deliberately set their calendar to get the very most juice out of the course and then, during the holiday season, needed some extra cash. It felt like they stole it right out of my pocket on Christmas Eve. That was the first time I felt my generous refund policy was taken advantage of, so we changed it to 14 days, which felt right and in integrity for both myself and my clients.
I also changed the structure of the course. We held back some lessons and bonuses until after the refund period ended. Why? I had someone buy the course, download everything, create a similar Money Bootcamp, and ask for a refund on the very same day as the purchase! Yes, people can be that brazen. Don’t feel bad, just live and learn!
Your answer to refund requests that come in after the refund deadline has passed can be simply ‘no.’ Recently, a biz friend told me she had a refund request a year after a customer had bought her online program. Apparently, her former student was hunting around for cash, decided to take a chance, and asked for her money back. This is way more common than you’d think. Some people are so cheeky and situations like that are why you need specific deadlines outlined very clearly in your refund terms.
Here’s a script you can use to deal with this kind of refund:
Thanks for your email. In regard to your refund request, our policy is a no-questions-asked money-back guarantee for [number of days] days after a program is purchased.
Because you purchased the program [number] days ago, it falls outside the refund period, and we respectfully deny your request.
Since you still have access, we recommend that you go through the program again and hope that you get value out of it.
You’ll only get a few of these outrageously unreasonable requests in your career, but trust me, they will come!
Sometimes clients purchase a package of sessions with you, or a certain amount of work, then go AWOL. They might cancel a few meetings or decide they need a break. You may suspect that their money blocks or fear got in the way. Then, a year or two later, they contact you asking to resume work, as if they hadn’t ghosted you. ‘I’m baaaaack! And this time I’m really ready!’ How you respond is entirely your choice. If you have solid contracts and deadlines in place, you can decline their request or get ‘Sabrina’ to do it.
Thanks for the update on where you are with your life/health/business.
Unfortunately, we won’t be able to resume sessions under your old package because it expired on [date].
If you’d like to start a new package, I’d be delighted to work with you again. My new rates and packages are here: [link to website].
Look forward to hearing from you.
No need to get defensive or blamey. Keep it simple and direct. You can get more specific in follow-up emails if they question it. For example, you can point to the instances where they cancelled or failed to show up and prove that you sent follow-ups.
If a refund request comes in and you didn’t cover the circumstance in your policies, be honest and ask yourself:
Whoever is to blame, sometimes you have to suck it up and fulfill the work, even if it’s unprofitable for you. If you do, make sure you have a specific deadline in place. (Oh, and make sure it doesn’t happen again by tightening up your procedures for future clients.)
It sucks to perform work at old prices when your prices have increased significantly, and it’s even worse to have to provide a service that you no longer offer (or desire to offer), especially for people who were non-ideal clients to begin with. Here’s a suggested script:
Thanks for the update on where you are with your life/health/business.
Normally, the package you booked expires after 12 months, but in this case, I’m willing to make an exception, as long as you book and complete all sessions by [date].
My updated terms and conditions are here [link], and here’s the link for my online calendar, so you can book our final meetings [link].
After that date, my new rate will be [amount] per hour.
I look forward to working with you again.
Again, keep it simple and put the ball in their court. Send them one last reminder; tell them that your calendar is filling up quickly, and if they don’t get their act together this time, their sessions will expire.
Your refund policy doesn’t have to be
complicated, but you sure do need one!
I’ve put a template for my terms and conditions in the book bonuses at Chillpreneur.com/Bonus. Feel free to model your own on them. Don’t use mine word-for-word though: make sure your terms and conditions are tailored to your business and reflect what’s legal for your industry, state, or country.
The last scenario is when (not if) clients default on a payment or decline to pay the remainder of their bill. This often happens when you offer a payment plan. In fact, we often have up to 20 percent of our monthly payment plans fail. It’s a huge amount of work to recoup those costs, especially since we have hundreds of people on payment plans. This is why payment plans are more expensive. Don’t feel bad about adding an additional charge to them, because payment plans will cost you more time, money, and potential stress.
Does that mean you shouldn’t offer them? Not at all. It’s still an awesome way to incentivize people who can’t afford to pay the full price upfront. There’s no shame in that (I’ve used payment plans many times to manage cash flow myself), but you have to be prepared. This is where ‘Dave from accounts’ comes in handy. Have you noticed that every single company in the world has a Dave in the accounts (or IT) department? When ‘Dave’ took over from ‘Sabrina’ to chase down late or default payments, we had more responses to follow-up emails. It’s a gender bias that worked in our favor. Even though Dave said the same thing, for some reason, people took his requests for payment more seriously. Sad but true (test it for yourself)!
Defaults happen in every business, and it’s nothing to be scared of. People’s credit cards expire, they have their wallet stolen, or maybe they’re short of cash one month. Don’t assume that they won’t or don’t want to pay – they might not have even noticed. You need to follow up: in marketing or in collections, ‘the fortune’s in the followup.’ Take action quickly. Send them an email right away, using very brief, non-emotive, and non-apologetic language.
Just letting you know that your recent payment was declined. Here’s a link where you can fix that easily: [link].
Thanks for taking care of this quickly.
If you have questions or need assistance, please let us know.
(It’s totally okay for you to simply ask for your money. They signed up to your product, service, or offering in good faith, and you provided it in good faith. Don’t be afraid to follow up. Some people might be embarrassed and are ignoring your email. Others might not have seen it.)
Your follow-up email could be:
You might have missed the email we sent yesterday, in which we let you know that your most recent payment was declined.
Here’s how you can fix that easily: [link]
If you have any questions or need help, please let us know by responding to this message as soon as you can.
Give them specific instructions. Can they click on a payment link and pay right away? Do they need to login to a system and update their card? Be accommodating but firm. If they come back asking for more time or a longer payment plan, be understanding but very clear on what you expect. Ask them to commit to a specific plan, not some vague time in the future.
If things escalate, and people aren’t willing to pay you, you’re within your rights to tell them what the consequences will be. Again, be firm, polite, and non-emotive. Remind them of your terms and conditions of sale. Will they be removed from your program on non-payment? Does service stop? Will you withhold something until payment is made? At what point would you send them to a collections agency?
You don’t have to be horrible about it. In fact, my friend Marissa Roberts, one of the nicest people in the world, uses a ‘when/then’ approach instead of threats:
You can even end with ‘does that sound fair enough?’ Lastly, outsource this as much as possible, whether it’s to ‘Dave,’ a real assistant, or a company that specializes in this kind of service. Play Rihanna’s ‘Bitch Better Have My Money’ to psyche yourself up, and go get that money!
You’ll find more scripts in the book bonus section around time boundaries, how to fire suppliers, and other awkward dilemmas. None of this has to be scary; but it will happen, so be prepared! Download these resources before you forget at Chillpreneur.com/Bonus.
Charging appropriately is an act of self-care and self-love.