How to Use Psychology to Deal With Non-Paying Clients

Important Caveat: This is not a 3 step plan to twisting your client’s arm and forcing him to spit up your well-earned money (although when you are denied your rightful, that doesn’t seem like such a bad option right?)

These are actually 3 mind tricks that work wayyy better than the arm-twisting, name-calling and general payment related nastiness. These work on their brains and works better than most ‘rational’ approaches.

You are in a business to earn money and when it comes to being paid for your product or service, your ultimate purpose really is this:

Short term: You want a response from the client. An unresponsive client is almost always a problematic client when it comes to payments.

Medium Term: You want to get paid (hell yeah!)

Long Term: You want to keep and grow the relationship.

Just keep your eye on these goals from day one and structure your contracts, your communication and your client service approach around these goals.

Mind Hack One: Label them as Rock Stars:

I know I know this sounds like you will be reinforcing bad behavior but allow me to explain why and how this works. First of all, you don’t label them as rock stars after they prove they aren’t worthy of this honor, you do it BEFORE.  Ideally you do it for all your clients towards the start of the relationship or do it when you see the first faint signs of a difficult client and BAM, you slap them with the rock star label.

Why this works:

Labeling theory shows that behavior of individuals is influenced by the terms used to describe them. Many studies have shown that labels turn into self-fulfilling prophecies and labeling someone as smart, dumb, good at math etc. can visibly impact the performance of the individual in that area. This works exceptionally well in client servicing, when you label them as a rock star client (via email, social media shout out or even a hand-written note) they will act consistently with that label. They can’t help it!

Mind Hack Two: Have Them do you a Favor:

Ask them for a simple favor involving minimal effort from their side. You may want to ask them to write you a testimonial for your website or a simple tweet singing your praise or even a referral.

 Why this works:

Benjamin Franklin once said:

“He that has once done you a kindness will be more ready to do you another than he whom you yourself have obliged.”

This concept was tested in numerous psychological studies and they all concluded the same thing:  If someone does a favor for you, they are likely to rationalize that you must have been worth doing the favor for. So when the times comes for them to pay, the same thinking comes into play with the client thinking: “Hmmmmm . . . I can’t really deny her right if I like this person this much, can I? If I have to pay one person, I should pay her first. . .”

Mind Hack Three: Set up a Solid Payment Funnel

Throughout your client communication cycle (from contract signing to final pay-off), there should be a parallel payment funnel running. What does this mean? That you will be bringing up the payment conversation multiple times during the client communication and not just at the time of the invoice. See the below graphic for specific details on how that would work:

 

How to Deal with Non-Paying Clients

Why this Works:

Firstly and most importantly, you have primed the clients’ brain to have these money conversations. An invoice is always a rude shock but if the money cues have been sent ahead of the invoice, the brain is actually anticipating the invoice and should therefore force your client to deal with it.

Bonus Tip One: How to deal with specific Client Excuses

Excuse: I don’t have the money right now

Response: Offer installments

Excuse: I don’t have the money. Period.

Response: Empathy followed by legal and contractual ramifications

Excuse: I am not happy with your work

Response: Ask for specific examples and check to see if they fall within your scope. If they do, agree on specific delivery parameters and if they don’t, bring up legal ramifications.

Excuse: I want more changes/ extra work etc.

Response: Refer to the contract for scoping boundaries

Bonus Tip Two:

Your engagement contract or terms of service should spell out at a  minimum the following:

 

    • The timelines for approval

 

    • Scoping boundaries

 

    • Clear demarcation of what’s included in scope and what’s not

 

    • Payment terms and legal ramifications such as late payment charges, penalties etc.

 

    • Indemnity clauses

 

Or for a simpler solution, get Your own Pocket Lawyer

 

The bottom line is this:

Human beings make most decisions emotionally first and then use rational methods to justify those decisions. This means that if you want to minimize any payment related issues with your clients, you need to give them emotional as well as rational context. There would still be people who would avoid payments on purpose but the tricks above should be able to get through to more than 90% of your clients.

Good luck and let me know if you found this of use in the comments below.

Want to REALLY nail this persuasion thing? Get your paws on the Non-Icky Persuasion Toolkit. Why…it’s free!

 

Share small business news, blogs and social media tips with Project Eve’s community of small business owners and entrepreneurs today. Our contributors come from a wide range of backgrounds; so whether you are a small business owner, social media strategist, financial adviser, serial entrepreneur, or write an amateur blog we urge you to contribute a blog to our 500,000+ community today. For more information, please refer to our Content Submissions Guidelines.

Add a Blog

57 COMMENTS

  1. Have you ever thought about including a little bit more
    than just your articles? I mean, what you say is important and everything.
    However just imagine if you added some great visuals or video clips to give your posts
    more, “pop”! Your content is excellent but
    with pics and clips, this site could undeniably be one
    of the very best in its field. Superb blog!

  2. I just like the valuable info you provide to your articles. I’ll bookmark your blog and take a look at once more here regularly. I’m relatively sure I’ll be informed many new stuff right right here! Good luck for the following!

  3. Hi! Would you mind if I share your blog with
    my twitter group? There’s a lot of people that I think would really
    enjoy your content. Please let me know. Many thanks

  4. Hi, i feel that i saw you visited my site thus i got here to “return the choose”.I’m trying to to find things to enhance my web site!I suppose its adequate to make use of some of your ideas!!

  5. I don’t even know how I ended up here, but I thought this post was good. I don’t know who you are but certainly you are going to a famous blogger if you aren’t already ;) Cheers!

  6. May I simply just say what a comfort to discover someone that genuinely understands what they’re discussing on the internet. You actually know how to bring a problem to light and make it important. More and more people have to read this and understand this side of your story. It’s surprising you are not more popular since you certainly possess the gift.

  7. I intended to create you one little word just to say thanks a lot as before about the striking tips you’ve discussed at this time. It was simply strangely open-handed of people like you to provide unhampered just what a few individuals might have made available for an ebook to generate some money for themselves, and in particular since you could possibly have tried it if you ever wanted. These advice in addition served to be the great way to realize that the rest have the same keenness really like mine to realize good deal more when considering this problem. I am certain there are numerous more fun periods in the future for individuals who look into your site.

  8. Hello! I’ve been following your weblog for a long time now and finally got the bravery to go ahead and give you a shout out from New Caney Tx! Just wanted to say keep up the great work!

  9. This is very interesting, You’re a very skilled blogger. I’ve joined your feed and look forward to seeking more of your magnificent post. Also, I’ve shared your web site in my social networks!

  10. I will right away seize your rss as I can not find your e-mail subscription link or e-newsletter service. Do you have any? Kindly allow me realize in order that I may just subscribe. Thanks.

  11. May I simply say what a comfort to uncover an individual who truly understands what they are talking about over the internet. You certainly understand how to bring a problem to light and make it important. More people ought to read this and understand this side of your story. It’s surprising you aren’t more popular because you definitely have the gift.

  12. This piece of writing on the topic of Search engine optimization is actually pleasant one, and the back links are really very helpful to market your site, its also referred to as SEO.

  13. whoah this blog is wonderful i love reading your posts. Keep up the great work! You know, lots of people are hunting around for this information, you can aid them greatly.

  14. Thank you, I have recently been looking for info about this topic for a long time and yours is the best I have discovered so far. But, what in regards to the conclusion? Are you positive concerning the source?

  15. Hello There. I found your blog using msn. This is a very well written article. I will be sure to bookmark it and come back to read more of your useful information. Thanks for the post. I will certainly return.

  16. Another thing I’ve really noticed is always that for many people, low credit score is the consequence of circumstances outside of their control. For example they may have been saddled by having an illness and because of this they have high bills going to collections. It could be due to a occupation loss and the inability to work. Sometimes divorce can truly send the finances in the undesired direction. Thanks sharing your notions on this blog.

  17. I also like Flash, but I am not a good designer to design a Flash, except I have software program by witch a Flash is automatically produced and no more to hard working.

  18. Thanks for your publication on this blog site. From my own experience, many times softening way up a photograph might provide the photo shooter with a little an creative flare. Often however, this soft blur isn’t what exactly you had in mind and can in many cases spoil a normally good picture, especially if you intend on enlarging the item.

  19. Hiya, I am really glad I have found this info. Nowadays bloggers publish just about gossips and net and this is really frustrating. A good blog with exciting content, this is what I need. Thanks for keeping this site, I will be visiting it. Do you do newsletters? Cant find it.

  20. Along with every little thing that seems to be developing within this particular subject material, all your opinions tend to be very exciting. Nevertheless, I appologize, because I do not give credence to your whole plan, all be it exciting none the less. It would seem to us that your comments are not totally validated and in simple fact you are your self not really completely convinced of your point. In any case I did appreciate reading it.

  21. Hi, I do believe this is a great web site. I stumbledupon it ;) I may return once again since I book marked it. Money and freedom is the greatest way to change, may you be rich and continue to help others.

  22. I like the helpful info you provide in your articles. I will bookmark your weblog and check again here frequently. I’m quite certain I will learn lots of new stuff right here! Good luck for the next!

  23. Pretty section of content. I just stumbled upon your blog and in accession capital to claim that I get in fact enjoyed account your weblog posts. Anyway I’ll be subscribing on your feeds and even I fulfillment you access persistently rapidly.

  24. I would love to add if you do not now have an insurance policy otherwise you do not belong to any group insurance, chances are you’ll well really benefit from seeking the aid of a health insurance agent. Self-employed or people who have medical conditions normally seek the help of one health insurance brokerage. Thanks for your post.

  25. This is really fascinating, You are a very professional blogger. I’ve joined your rss feed and look forward to in the hunt for extra of your fantastic post. Additionally, I have shared your website in my social networks!

  26. I’m so happy to read this. This is the type of manual that needs to be given and not the random misinformation that is at the other blogs. Appreciate your sharing this greatest doc.

  27. Through my investigation, shopping for electronics online can for sure be expensive, however there are some tips and tricks that you can use to obtain the best things. There are always ways to obtain discount specials that could help make one to have the best electronics products at the cheapest prices. Good blog post.

LEAVE A REPLY

Please enter your comment!
Please enter your name here