Over the years I have learned a thing or two about clients and their money. You generally have two sort of clients, those who have no problem spending money and those who want to hold on to every penny they can. The information below will walk you through how to determine what type of client you are dealing with, how to charge them, and what to do if they don’t pay.

Step 1 – Determine the Type of Client

If you can evaluate the type of client you are talking to right away in your initial sales call, you stand a much better chance of landing the job. Being able to know what type of client you are dealing with early on will allow you to adjust your sales pitch and payment options to something thats more likely to appeal to them.

So, how do you determine the type of client you are working with in your initial sales call?

Here are a few things I have learned:

• Clients with budgets around $2,000 to $3,000 are typically funding projects out of their own pocket as an investment. This means they are emotionally invested to the project and to their money. Make them feel comfortable with you as a person and offer milestone payments and you are sure to get the job.
• Clients who are reluctant to give you their budget are generally bad news. These tend to be the clients who constantly ask for more than they payed for and don’t really appreciate the cost of good web work.
• A good client will understand why you need to know their budget. Simply tell the client that you need to know their budget so that you have a better idea of what solutions can be achieved within that budget.
• Clients with budgets over $5,000 tend to understand how freelancers work and generally don’t have a problem with a 50/50 payment plan. This is how they are generally used to doing business. Larger budget clients don’t like the idea of a lot of smaller milestone payments.
• If you do get a client with a budget of $5,000+ who is a bit reluctant to do a 50/50 payment plan because they have never worked with you, offer them a quarterly payment plan where they can pay a top loaded deposit and then 3 more payments over the course of the project. Think of this as milestone payments for big budgets.

Step 2 – Explain the Payment Terms Clearly

It is important that even in the initial phone call with a client that you outline the payment process in detail. It’s always upsetting when you end a call with a new client by them asking you to send them an invoice, only have them call you back asking why they have to pay so much up front. Or worse still, thinking you explained the milestone payments to the client, but them getting upset when you ask for money in the middle of the project.

Im sure most of you know how to explain a 50/50 payment plan, but some of you may be new to the idea of milestone payments, so let me take a minute to explain this idea and why it works so well for freelancers and lower budget clients.

Milestone Payments Explained
It is funny to me how excited we as a society get at the idea of monthly payments. Ok, maybe we dont get excited about the idea of monthly payments, but we get excited about not having to fork over large chunks of money at once. This idea of monthly payments is something that can also work well in the design industry. You would be surprised how many time I have sealed a $5,000+ job because I told them I would do milestone payments vs. the traditional 50/50 split.