Are you Over-Exposing Your Clients to Risk?


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Three years ago my wife Linzi went off to Kyrgyzstan for a month. The day after she left I sat at home, cracked open a beer and fired up Ebay. Just to look at motorbikes.

There is something mysterious about Ebay. Maybe it was the ticking countowns. Maybe it was the beer. But 90 minutes later my fear of missing out was in overdrive.

I bike had come up in Windsor, which was nearby. It was learner-legal, which was what I needed. And the owner was willing to ride it to my home in High Wycombe. What could possibly go wrong?

I clicked ‘buy’, and saw the green ‘you’ve committed to buy this item’ message.

Uh oh. What have I done… I thought. She’ll kill me…

Two days later this arrived.

Rob's bike

I don’t know how the previous owner had managed to ride it to me. It didn’t have any fuel in it, and hardly any oil. “Oh, here’s the MOT certificate,” he told me. “There are warnings about cuts in the tires. But I can’t see them…”

If I had known then what I know now, I would have spotted the hydraulic fluid on the front left turning fork. But I didn’t know that, so I didn’t spot it. I paid him a thousand pounds in cash and the bike was mine.

While I thought I’d bagged myself a bargain, what I’d actually done is over-expose myself to risk. I knew I had taken a risk the second I clicked the ‘buy now’ button.

I knew because I felt over-exposed.

As soon as you spend decent money on anything you always introduce an element of risk. Even if you have plenty of money, seeing a chunk of it disappear from your bank account always makes you pause and think: ‘am I sure this will do what I need?’

This problem is especially bad in the marketing world, where you cannot kick the tyres, squeeze the brakes or supposedly inspect the turning forks.

When you hire a copywriter for example, he or she is usually expected to provide a proposal. Proposals are essential because they define the scope of the work, but they are useless at predicting whether the work will do what you need.

The big problem when you engage the services of a marketing firm is you don’t know up front whether the work will deliver the results you need. The agency will reassure you it will, but they don’t know for sure.

You as the client accidentally take on all the risk, because you pay a hefty project deposit up front with no real assurances of results.

If you hire a copywriter and the writing fails to generate sales, there is no downside for the copywriter. They might not get a testimonial from you, but they still get paid. You as the client suffer all the down-side if things don’t work out.

The copywriter did what you asked. You just didn’t know what to ask for.

If you’re the service provider then things aren’t too rosy for you either. The proposal you sent you was essentially a guess at the value of the work. If the work you do delivers results beyond expectations you as the marketing provider are not rewarded for those results. You only get the fee you guessed at in your original proposal.

The answer, I believe, is to move to a situation where neither party ever feels over-exposed. This has to accommodate the risk / reward ratio you are comfortable with.

My own take on this is to do a discovery project. A discovery project is essentially a down-payment on a full project. But rather than paying for the full project up front (which escalates the client’s risk), the discovery contract covers time for me to research the project properly.

This is research that I would carry out anyway as part of a project. I’ll normally want to speak to key members of staff, and perhaps to a handful of customers.

I always know when the discovery project is over because I start to have the same conversations with everybody. The same issues come up over and over. The same ideas get raised by different people. At that point it is time to stop researching and time to start writing.

By splitting up the project things become less risky for everybody. I can be more confident that the work I am proposing is actually going to deliver the necessary business result. And the client benefits because the bulk of the work is deferred until a more substantial plan is in place.

As a client another way to over-expose yourself is to sign up to a minimum six-month contract. Any agency that asks you to sign up for six months is padding out their cashflow and escalating your risk. Don’t sign it.

Either party should be able to walk away if things aren’t working out. It’s all a part of not feeling over-exposed.

What I’ve written here is really a comment on the marketing service industry. I’d love to know if any of the ideas here apply to you in a non-marketing business.