Why We Don't Use Contracts with Our Clients.
Contracts are Just Not Worthwhile.
Just the other day a client asked me to send over the contract that we use for our $200 Social clients. They are ready to move forward with us and wanted to look over the contract. I replied, "sorry we don't use contracts with our clients." Quiet on the other end then, "Seriously? That is so cool!"
A little history of our company High Impact Media Group Panama. We began in 2012 after my partners decided they did not want to keep me around. It was a pretty stressful time for Anabell and I as we scrambled to build an online marketing company from scratch. We were newly married and now lost 80% of our income. What do we do now?
I reached out to a few friends who were also in the precious metals industry and told them I was free to work with them and they agreed to have us do their social media. When I was asked if they needed to sign a contract I told them no because I trust that they will honor the deal.
Over the next four years we have had over 30 clients come and go. Some stick around for the long term but there have also been a few that quit on us after 30 days. What I have learned is that not having a contract is good for both sides.
Why Would Not Having Contracts is a Good Thing?
- If the chemistry between the client and us does not match we can end the arrangement.
- Feelings are never hurt.
- No lawyers involved.
- We have to prove our worth to a client. They don't have to worry that they are signing a deal with a crappy service.
- If the client does not follow our leadership we can end the deal.
Now some of this may seem harsh but imagine what some clients and services deal with because a contract binds them. What if the client is a perpetual pain in the ass and takes up 90% of your time? Maybe they don't listen to anything you say. In the game of social media word gets around quick who your clients are. If the client is sharing poor quality content the followers will quickly assume that we were involved which reflects upon us.
We have had clients that were stubborn and thought they knew it all. We had one client a few years back who hired us to boost their presence online. After just a few days we had her accounts flying high across social media. She had images that were going viral left and right. Then three days before renewal she messaged me that she could do it on her own.
Over the next few weeks her accounts languished as all the momentum quickly disappeared. She emailed me and asked what she was doing wrong. I told her that the only reason she was getting any results was because we were leveraging our over 200,000 followers to boost her posts. Over the next few months her business practically disappeared from social media.
Then we had a client tell us that the way we do social media makes very little sense. Why would we share images to grow a business? I recently looked up that clients account and over two years later they still have practically zero growth. Sometimes I just shake my head and realize some people need to find their path on their own.
We also have had clients that have placed their whole online business in our laps and said, "make something of this please". These clients tend to be the happiest because they realize we are never going to do something that harms their accounts. Some of these clients have gone from nothing to thousands of followers in very short periods.
Can Contracts be a Good Thing for Your Business.
- No, I never want to work with contracts.
- We have very few American clients who seem to be the ones who are used to working with contracts.
- Sure, if You like to work with a chain around your neck.
Frankly Contracts are Against Everything I Believe In.
I truly believe we have avoided many headaches over the last few years because we decided to not require our clients to sign contracts. We also do something that is very different than our competitors. We are very open about what we do for our clients. Everything we do is open before the client. They could easily do it themselves. Our peers think we are nuts but if a client thinks they can do what I do, more power to them.
It comes down to the question, "do I let Randy handle it or do I take the time to learn every aspect of social media?" I have a saying that I like to tell my clients from the beginning. "You can either have a professional do it for you or you can take the next fours years and learn on your own." Most would rather let someone who knows what they are doing handle their online presence for them. The same goes for guidance. I don't tell our client Dr. Cashion how to do chiropractic care. She trusts us with her brand.
title should be changed to "Why We Don't Use Written Contracts with Our Clients."
because you probably do use contracts.
Please read the post again.
OK, done. I think its a pretty good post. and i upvoted. But i still think you use contracts. Its literally impossible to conduct business without them (well,legitimate business anyway)
Even if they're not in writing, and even if they're terminable by either party at any time, theyre still contracts. In fact, one could argue that they make for better contracts than traditional written contracts that are not as easily terminable.
In the simplest sense, all you need for a contract is mutual assent to an exchange of considerations. Do you and your clients mutually agree that they will pay you $200 for social media promotion? If so, then that is a contract even if no one signs anything.
Sure but I was talking legal contracts. So no we don't use them once again.
Often it seems that contracts are just a convenient way to trap someone else while still giving me a way out. I've had to write some in the past, and there certainly are a lot of options to explore and a lot of bases to make sure are covered.
Interesting article and you've made some good points @hilarski!
Thank you for that! I have no intention of ever trapping anyone it seems way too complicated.
Good Points! Contracts just gives so many constraints, and loop holes. Quite cumbersome. Yet, in many cases, contracts still are necessary evil specially when dealing with money & properties. For services, will from now on consider contractless ventures! Thanks
I think that's pretty cool. I sometimes do writing for clients. I don't initiate contracts because they're a pain to drsw up and most of the time people will honor their word in business. If they don't you can decline doing repeat business. I've never hsd a problem with getting paid. It's cool that you avoid contracts intentionally.
Interesting to hear your view on working with contracts. I know in my industry (wedding photography) working without a solid contract is straight suicide. Our contract is designed to protect us and our clients though, everything about it is meant to reassure them and make them feel secure that we aren't going to take their money and can out on the most important day of their life, but again, it's a different business.
I think it really depends on the industry and scale of a project. I'm not a marketer, but I imagine a social marketing campaign is fairly easy to start and/or stop without serious repercussions for either party. I have also never used contracts with any freelancing web dev clients I have had, but they generally have been fairly small in scale.
In contrast, years ago when we lived in the states I worked as a project engineer on several highrise construction projects. I did A LOT of managing contracts and making sure that obligations were met. In this industry contracts are essential because failure to complete requirements on time can cause a domino effect that can lose millions.
I agree that is a very different animal. Ours is much more simple.
From my perspective it is not black or white. I think contracts are an extremely valuable tool in a lot of cases. For example leasing a retail outlet for ten years, signing up for a home warrany, and many other thousands of examples.
At the same time I agree and also prefer that in other cases that are much less complex contracts can either be reduced to a minimum and/or left off. Regarding your business and what you offer I find your approach interesting and am personally fine with it. Larger, more established firms would not accept it though as they have certain governance rules that don't allow them typically to just pay money to a vendor without a concrete agreement on what the deliverables etc. are. But it seems you don't need and want those which is actually great. It's much easier and more fun to do business based on trust. I 100% agree.
We are small and never intend to be a large firm. We deal with small business owners instead of large corporations so a simple handshake or an agreement over Skype will suffice.
I like that!
I agree and if a contract is absolutely "required" I suggest that both parties sign it and stick it away in the back of a file drawer and forget it. Two ethical parties with a high-level of integrity should never have to resort to the terms of a contract to solve business issues. They should focus on their common goal and their relationship to do business together. After all, those are the most important things in business.
We don't use them either. Unfortunately, business is slow now. But we've not had problems. We lay everything out very clearly, so the client knows what they need to do, knows what to expect and understands the costs involved. They can either hire us or not. No pressure, no hassle.