Thursday, August 12, 2010

What price is a company's reputation worth? Answer: $4600

A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.
- Joseph Hall

I've been lucky for the last four years as a consultant to not have any major problems with getting paid. So the story of the first client to behave really badly is worth telling.

Back in January 2010 I contracted with an organisation to do $12,000 worth of consulting work for them over the next few months. After two months I sent an intermediate invoice for $9,600 for the work completed so far. Around then the organisation decided due to a strategy change that they no longer wanted the work that I was doing. So they simply went quiet on me and wouldn't acknowledge any email or phone calls. I didn't know what was going on, just got a bit annoyed at the late payment and lack of communication.

Last week I dropped by their offices to sort this out. I received a rather chilly reception and was offered $5,000 as a final payment. Fed up with the five month delay and their lack of communication, I took the offer.

So I lost $4,600, and they lost all my trust and respect. When future clients ask me about that particular organisation's products, I'll probably say "tech is ok, but terrible business practices". Would I work for the same organization again? I'm a pragmatist so probably yes, but with 50% payment or more up-front.

Companies spend thousands of dollars on trade shows and advertising then throw the resulting gains away by treating another business badly. Crazy.

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