Complaining about an influx of prospects may sound ridiculous to many. But in reality, growing businesses *can* attract new customers if they need to, considering they’ve been in business long enough to build a reputation or a portfolio, save some capital, and explore a couple of channels that get the job done.
In this case, it’s more about investing a lot more into the channels that work, and restoring the long-term pipeline in exchange for a short financial hit.
Additionally, ongoing leads are not uncommon—it’s the line up of truly qualified and suitable leads ready to adhere to a specific business process within certain financial boundaries.
In this complex mix of scenarios, businesses often have to decide between existing clients and new leads or try to prioritize a longer pipeline of prospective customers.
Client Acquisition Can Be Expensive
Besides the obvious cost for reaching a lead in the first place (through paid ads, sales calls, influencer campaigns, trade shows, sponsoring events—or any other medium), the qualification, negotiation, and closing process itself can be a long dance by itself.
We currently work with a client I kept in touch with (as a lead) for 3 years before we finally started. Also, one of our other retainer customers (signed in August 2018) initially reached out in May 2017 until we got to the point of starting out.
Client acquisition can be a staggering investment. Add paperwork, scope of work, NDAs, and everything else to the mix and there you’ve got it.
So even when you get to the point of successfully generating leads, qualifying and closing them isn’t any easier. And while the sales or lead generation process can be outsourced to some extent, you or your limited sales team have to be in charge of all opportunities from the get-go.
How to Deal With Overbookings
Every business values its clients as they are their lifeline. But what happens when you are overbooked, your plate is overflowing, and a new client seeks your service? You can’t maintain an existing client if you neglect your work.
It is 16 times more costly to build a long-term business relationship with a new client than simply to cultivate the loyalty of an existing one. Despite the fact that customer retention is so important, less than one-third of business executives consider it a priority.
In case a potential new customer awaits your feedback, here are some alternatives that I’ve seen working in practice. Some are not applicable to different scenarios (industry, type of work, culture, team size) but worth considering nevertheless.
1. Decline the Offer
Declining the offer is often the smartest thing to do.
It’s tempting to bring another client in. What about the consequences?
Not only are you jeopardizing your new relationship (and your reputation) but it will inevitably reflect on your existing workflow and clientele. Of course, it’s not the only option but think twice before accepting the deal.
Declining an offer from a prospective client can be extremely challenging as it may potentially kill any chances of landing that client again in the future. If you must decline an offer, you need to make sure that you:
- respond as soon as possible as a sign of respect for the client’s time
- express appreciation, but sound firm to avoid painful negotiations
- explain, but avoid detailing the reason to avoid misinterpretations
- suggest an alternative offer (we’ll discuss this in a bit)
In any case, this doesn’t have to be the only way out.
2. Work a Lot Harder
The obvious alternative is to put in a lot of extra time for this client.
If the critical workload takes just a week or two, this isn’t a bad option. For instance, launching a new set of pages, writing several articles, running a strategy concept could lead to plenty of ongoing work later without requiring months of hard work up front.
Moreover, consider how reliable your existing clients are? Is anyone canceling anytime soon? There may be an overlap between finalizing a project in a month and starting with a client now.
Note that you must first make sure that if accepting a client means overworking your employees to the point of unbearable stress and burnout, you have to rethink this option.
According to a study featured in Harvard Business Review, longer hours can be detrimental to your company and employees. Over time, highly productive employees may experience some performance drop-off. Work overload actually lowers down productivity by 68% among employees who feel there is not enough time to finish their tasks within the day.
Of course, growing businesses always go through the feast and famine cycle. It’s the nature of running a business, whether a startup or a consultancy. But keeping this rhythm for years to come may be detrimental to your top talent and will make your recruitment efforts even more complex over time.
3. Hire Freelancers You Trust
This is only reasonable if you maintain a network of freelancers who are trustworthy – possibly ones you’ve worked with on multiple projects.
Here’s a video wherein I discuss the 4-step checklist for hiring freelancers:
There is a reason why 42% of small businesses employ freelancers. Freelancers are often more flexible. Apart from the flexibility, you can also take advantage of the following perks:
- You don’t have to pay a full salary all the time
- Do away without holiday leaves and other employee benefits
- Save on office expenses, desks/chairs, laptops, and other bills
That’s what freelancers are all about — helping with emergencies and expanding your workload whenever you can’t do the work yourself.
Build a network of reliable experts available for hire, discuss hourly rates upfront, and loop them in before closing a project.
Once you can continuously book someone for a particular rate per week or longer, consider hiring them or look for a full-time employee who can join you in the long run.
Tap into your network and see if there’s someone able to help you. Expect a higher fee for an urgent project (and a last-minute one) which is a reasonable ask.
4. Refer Them to a Partner Firm
It’s always best to keep in touch with other companies in your industry. Unless their management is of the “highly competitive” type, you may help one another by referring leads or partnering up on projects together.
Referring clients is one great way to nurture a partnership with a competing firm. Referral partnerships can work to your advantage if you make sure that you are not referring a client because it’s a bad case with the following issues:
- the client is a bad payer
- there are legal repercussions
- the client is not a perfect fit for what the firm offers
Ensuring a great client experience throughout the process can also help you manage the project (if you choose so) and retain the client in the long run if reasonable/possible. You may also work out a decent referral fee on top of a great business partnership!
5. Offer a Different Service (Consulting or Advisory)
If you can’t take on the complete project, figure out if you can help in a different capacity.
Say, a company asking you to do web design planning or development still needs these services. You can help them vet other agencies, conduct reviews of their work, interview applicants, or anything else. Assuming that it takes less time compared to building everything yourself.
I’ve done that numerous times with smaller clients that simply aren’t the right fit for DevriX. Instead of charging $50K for a service that could be offloaded to a smaller provider (without requiring the bells and whistles we would deliver), I could charge $1,400 for 4 hours of planning, strategy, and negotiations with a vendor quoting $15K for the build.
This could yield a better ROI for you, too, given an adequate consulting rate for similar services.
6. Try to Break the Process Down Into Longer and Less Intensive Iterations
Sometimes, a long and “urgent” project is not as urgent as it seems.
Or it takes multiple iterations contingent on different parties involved with the process.
Find out whether there’s a way to postpone for a while, or in case there are multiple stakeholders who can’t get together in a room. This is usually a bad signal for most vendors but may work in your favor.
Oftentimes, the business requires “all of it” done by an unrealistic time frame. Even if you aren’t fully booked, it’s still unreasonable to complete the job in a month if it usually takes 10 weeks.
This specifically includes additional factors in the form of negotiations, getting the contract signed, providing the initial assets to start the work, etc. Getting the paperwork done alone may take weeks at a time (and that’s what usually happens).
Instead, find out if you can only build a smaller portion in the form of a prototype or a demo until this deadline. Instead of a complete website, sometimes a landing page with an email list may get the job done for starters.
7. Consider Your Workload and Possible Delays
Are there non-critical projects you have voluntarily committed too?
You may also assess the offer by determining the answers to the following questions:
- Is this going to be a long-term project?
- How much revenue are you saying no to by declining the project?
- How many people are needed to work on the project?
- Can you easily pull some help from anyone in your team?
Sometimes you work on assignments that are not urgent. Some backlog tasks and minor cleanup can wait.
Or a client is hardly responsive anyway. Or plans a vacation. Or anything else that could wait.
Check with your existing clients first. There may be a sweet spot that you can fill with your new client. However, keeping your existing customers happy is the best way to bring recurring revenue on the table, so stop obsessing about sales.
8. Let Them Know When You Can Start
Being straightforward about having to say no to the client can be risky, but rewarding in the end. Imagine dodging negative reviews because you were unable to comply or finish the project on time.
Instead of making unnecessary compromises, be honest about when you are going to be available. You can position your response in a way that highlights your desire to give them the highest work quality in time, when you are not tied to existing obligations.
Let them know for sure when you are available and schedule a meeting again to discuss more about the project requirements.
9. Confirm Your Existing Projects Will Actually Pass Through
Evaluate your existing clients and check whether a certain project is having issues with regard to client feedback, payment, or other red flags.
If you are letting go of a potential long-term deal over an existing client that is making it difficult for you to work on schedule because they plan to terminate their project with you, then you have to detect these signs before you waste an opportunity.
Once a client becomes evasive when you start talking about extending the contract or working on future projects even when you used to talk about these things in the past, then you should also take that as a red flag.
Although most projects are bound to end, knowing ahead when a project is ending will allow you to plan and reassess your workload. Because of this, push for an open communication line between you and the client and you won’t be left hanging.
Collect Upfront Payments
Securing business is about commitment. This is the main reason we’ve designed our WordPress retainers program—monthly batches of work allocated to the best team members depending on the tasks at hand.
And working on waterfall-based projects could be risky. This is where the upfront payment makes the most sense. Imagine declining two wonderful leads for a couple of ongoing projects that end up not paying through?
And especially if you’re overbooked, upfront payments are a necessity to confirm the lead is really serious. Otherwise, you can always revert and get the job done with a response like:
“Hey X, I appreciate your stance but an upfront payment is a strong requirement on my end. I’ve been in business for Y years and this is a standard procedure for dozens of clients I’ve been working with since, so if you’re reluctant to invest in this business relationship, I wish you well and good luck with your project.”
That said, I’ve worked without upfront payment many dozens of times and burned just a handful. Not to say that this is a best practice, it’s more about the business handshake between established owners.
The right contract with the right legal requirements would pass easily in court, and most clients won’t be interested in going that far since this would have a serious impact on their reputation.
Of course, there’s nothing wrong in asking for an upfront fee — just outlining the differences.
Depending on the type of work (and duration/complexity), you can break it down into small phases and request payment after 15–20 hours’ worth of work (assuming you’re comfortable spending a couple of days with no guaranteed pay, so to speak.)
There’s a myriad of scenarios where an upfront payment may cover 10% of your actual work and still fail you, or end up in a legal battle that’s hard to overcome, or require a refund with fees covered on your end, or a number of other challenges.
Always Vet Your Clients
And the best tip I have is vetting your clients properly.
Top agencies also filter clients out. The more pre-sales meetings a client wants, the less details you get, the limited access to the existing codebase, clients asking for ballparks when 12 different options are possible, and dodging paid discovery sessions are a red flag, too.
When in doubt, don’t start even if the upfront fee is on the table. A terrible client would be poisonous to you, your organization, your staff, workflows, and overall work plan.
Even a great client could be terrible if the context isn’t right—budget is off, their expectations don’t match what you’re great at, etc. With the right business strategy, filter carefully every time, and keep the clients that really fit your “culture” and audience requirements well.