If I've seen it once, I've seen it a hundred times: a small company selling to a huge company lets the large company treat them like dirt, and the small company puts up with it because they're afraid of "losing a big client."
I recently received an email that's a perfect example of this:
I have a large client that often hires companies like mine to do projects. We are his "secondary vendor"--we are called in if his primary vendor have too much on their plate. This client owes us a substantial amount of money for past work.
When I escalated the issue of non-payment, the client's National Director proposed a deal: that we write off their payments, and they will send us projects large enough to compensate for the write-off.
We agreed. Well, it's been 10 months now, but we haven't seen any projects come our way. I asked the National Director whether there was some reason we haven't been hired, but haven't got an answer.
I am now thinking of expressing my disappointment, but am not sure if I should do it or even if I do it what should be the best tone. Your inputs on what you think as the best way forward would be very valuable.
I'm sure some of you see exactly what's going on: the National Director traded a real debt for an empty promise, knowing that the salesperson wouldn't dare to complain, as long as the National Director dangled the carrot of a new project.
This is a particularly egregious example of what happens all too often: the management of a big company uses and expends the resources of a smaller company in order to make his life easier.
A more common example is when a big company asks a small company to "define a solution" to a problem, when the big company has no intention of hiring the small company to do the work.
The small company marshals all its resources to create a detailed proposal (requirements, SWOT, etc.) which, when completed, ends up as an RFP that goes out to a dozen vendors, or maybe just to threaten their existing vendor with some fake competition.
There are two ways to prevent this kind of thing from happening to you. The first is to insist that you be paid for any substantial work that you perform, including any sales proposal that's longer than a few pages.
The second is to be totally hard-nosed and unafraid of "losing a big client." Because here's the thing: if you're not willing to say "go take a flying..." when a client is unreasonable, you're setting yourself up to be the patsy.
With that in mind, here's my advice to the reader:
Invoice them for the amount they owe you, accompanied by a polite letter saying that since they've not bought from you, you need to be paid for past work, immediately. If they don't pay, take them to court. Why would you care if you alienate a deadbeat?
This advice, by the way, comes directly from my own experience. I once had a big client (60% of my income) who stopped paying because they were having financial problems. Even so I kept writing for them, because I was afraid of "losing a big client."
Finally, I got fed up enough that I had my lawyer send them a letter threatening legal action. Presto! A payment plan surfaced and I was eventually paid everything I was owed, plus 10% extra.
So... did I lose the client? Heck, no. A few years later, they offered me a six-figure job with full benefits and, when I wasn't interested, hired me to freelance, a deal that increased my income by about $100k over two years.
So here's the lesson: if you let a customer use you as a doormat, they'll continue to use you as a doormat. It's only when you stand up and say: "cut the BS right now and fulfill your commitments" that you get respect... and make the sale.
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