Creating a Payment Structure That Works

[CDarklock]

This came from another thread I recently started in the copywriting forum, but it turned into a little essay that I thought would be helpful to other article writers.

Payment structures are hard to create. You're trying to deliver value to your client, but you're also trying to reduce your exposure to getting ripped off.

I've recently decided to adopt a "paid on delivery" structure that has raised objections. Here's the most recent such objection.

Originally Posted by Hesster

I'd really advise against a paid on delivery pricing structure. You're writing on spec and leaving yourself wide open to get ripped off. Get 50% up front, or 25%, or SOMETHING so that the buyers have to show they're serious and committed to you. Good buyers won't have a problem with this. If they complain, then they weren't the type of buyers you wanted anyway.

First of all, it's always a good exercise to turn objections around, and paint it from the opposite perspective.

"I'd really advise against a paid in advance pricing structure. You're buying sight unseen and leaving yourself wide open to get ripped off. Get half the work up front, or a quarter, or SOMETHING so that the writers need to show they're serious and committed to you. Good writers won't have a problem with this. If they complain, then they weren't the type of writers you wanted anyway."

Your client has all the same concerns you have!

The ideal in both of these cases is to risk nothing until you get everything. The client wants to pay nothing in advance and get the whole order before paying, and the writer wants to deliver nothing in advance and take full payment before delivering. So you need to find a middle ground that makes both parties happy. What are you comfortable offering?

The first thing you do is identify the risk. Examine the offer, and identify the risk... then move the risk to the front of the process. Let's examine one of the recommendations, 50% up front, on a hundred article order at $20 each.

First, break your work up into sections, where each section involves work that is completely paid. With 50% up front, you will collect $1,000 and then write fifty articles that you've already been paid to write. After this, you'll write fifty more articles that you haven't been paid to write.

Move the risk to the front of the process! Write fifty articles you haven't been paid to write FIRST. If the client wants fifty free articles, he won't pay. If he wants the articles at half price, he'll pay, and then you'll write fifty more where he won't pay. Your risk is the same in either case: you write fifty articles for free. But if the client is a deadbeat who wants free articles, you ONLY wrote the fifty free ones - and now you know not to write the rest!

Fail fast. The sooner you identify a deadbeat client, the sooner you can stop working for them - and work for quality clients instead.

On the personal development front, I spoke to someone a few months ago by the name of Huan Do. He's a former Tony Robbins protege, and he summed up business etiquette in six words.

"Treat everyone as your trusted friend."

Call it what you want: law of attraction, suggestion psychology, social pressure, whatever. People tend to provide what you expect.

So I just think to myself, my trusted friend wants me to write him ten articles. What do I need him to pay before I write them?

Well, nothing. I'll write him the articles on a smile and a handshake, because I trust him.

But now let's say he wants me to write a hundred. What do I need him to pay now?

Well, nothing - but I'm not going to do his work to the exclusion of my other clients. I don't have room for his hundred articles; maybe I only have room for ten.

He undoubtedly understands that what he has asked is a lot, so delivering a smaller amount with the possibility of doing the rest later is still a good thing for him. It also limits my exposure, and can still get his work delivered on a timeframe that works for him.

Whenever you're doing work for clients, both of you have a certain amount of risk. Identify the risk by planning out how much work you do at different points in the process, and how much of the work is at risk... then move the risk to the front. Take the risk first. The risk doesn't get any higher when you do this, and if you've taken a bad risk, you find out faster... so you can do something else.

It's also good for your clients if you can help reduce their risk, and if you reduce it to zero, they'll love you for it.

[Keeslover]

If you do this, maybe you could get a credit card number on the contract as the client's smile and handshake to secure payment, like you do when you rent a motel room.

If you have 100 articles to do, why not split them into groups of 20 rather than 50 and get paid for each group as you go?

[Zanti]

CD,

For me I think it has to do with how we chose to see the world and ourselves in the world. it's about attitude and approach, abundance or scarcity.

I believe that you are on target with

Treat everyone as your trusted friend.

Yes sometimes you might take a hit but more times than not the experience will be even more beneficial than what was expected in the beginning.

I've noticed some of your other posts and it seems to me that you don't just go along with the flow, but you go with what you know feels right to you. I would do that in this case.

Z