Nine Hidden Dangers of Wasting Your Time, Effort and Sanity on Nickel-and-Dime Cheapskate Buyers

Nine Hidden Dangers of Wasting Your Time, Effort and Sanity on Nickel-and-Dime Cheapskate Buyers

There are some buyers out there who understand value but there are many of them who understand only price. A few years ago when I was doing a course for my Certified Management Consultant accreditation, I had some debates with one of the instructors. He kept saying that my idea about value was a delusion, and the reality of consulting was the number of hours I spent working with the client. His idea was that clients must be able to derive huge value from my services, but I could only get paid for the number of hours I actually worked because of the obscure nature of “value”.

I may be wrong, and unlike him, I don’t have an MBA, but I believe if the client derives huge value from my help, a deserve more than a competitive(ly low) hourly rate. I got into business to overcome the typical wage slave syndrome as an employee, and it would be plain silly to become a self-employed wage slave. I also believe that I shouldn’t be penalised just because I don’t take much time and effort to create that new value for the client.

1. Nickel-And-Dimers Waste A Hell Of A Lot Of Your Time

Have you ever noticed how easy it is to come to agreement with prospective buyers who actually have an intention to change and now is just looking for a fit with a consultant with whose help and guidance to go through the changing process?

Now contrast this to Nickel-And-Dimers, who want to make sure all Ts are crossed and all Is are dotted even before making a shred of commitment.

When Carl Rogers, a pioneer in social psychology was asked about the most important aspect of human interaction when there is a strong difference of opinions, he said this: “Unconditional positive regard for the other person. It’s about holding the other person in a positive light and assuming that his/her interest is for the best interest of the discussion and the relationship, regardless of what the person actually believes at that moment.”

A few months ago the business development manager of a web design firm told me “I’ve forgotten more about marketing than you will ever learn. I just don’t have time to do it.” Yet, instead of implementing proper marketing (which he’s apparently a master of), his firm peddles its services using three call centres (Los Angeles, India and China) to cold call harass people to find new business. It seems the worst underperformers claim to know the most about everything.

Remember, low-level prospects usually drop to an even lower level as clients. Send them on their way with an imaginary recreational kick in their butts, and move on with a lesson learnt.

2. Nickel-And-Dimers Like Bragging About The Special Deals They’ve Received

A few years ago a friend of mine worked with a large manufacturing company, and some six years later that manufacturing company referred one of their vendors to my friend. Yes, the manufacturing company was a Nickel-And-Dimer and they were bragging to their vendors that with the right pressure they could arm-twist my friend to give them very very good per diem rates. The vendor expected my friend to give the per diem rate he was charging the manufacturing company six years before. It was a retarded situation. He was given a fait accompli: “Either you give us the same rate you gave them or you’re out.” And sadly my friend did, simply because the immediate smell of money was more attractive than the gut-wrenching stench of a slowly decomposing project that was waiting for him down the road.

And it was waiting all right. The client demanded detailed reports on everything. My friend had to write reports on report, memos and meetings. He had to document every second of his time. Really. The client demanded a time sheet from him in 15-minute segments. He would hand in the time sheet and the client would decide which segments got paid and which got deleted. On average, 35% of his time sheet got unpaid. When he asked the client why, the client just shrugged, “I don’t think it was necessary for the project.” Imagine, here is this egotistical, stupid idiot who hasn’t been able to solve his problem for himself, and then when the hired help does the work, he decides what’s needed and what’s not.

The problem is that when Nickel-And-Dimers brag, they don’t brag about the great service they’ve just received. No! They brag about how cheap the service was. And just as birds of the feather flock together, so do Nickel-And-Dimers. So, if you accept work with one of these business cretins, rest assured that you will be favourably inducted into the world if Nickel-And-Dimers, and many of them want your help. And from here on it’s a downwards spiral. Bad projects attract each other. The world will soon know that you’re the Nickel-And-Dimers specialist and more of them will come.

I believe money is the walk of the talk. When you ask people to invest in their own futures, you quickly learn how serious they actually are by whether or not they cough up the dough.

3. Nickel-And-Dimers Ruin Your Market Reputation And Your Credibility In The Eyes Of Great Clients

While Great Clients and Nickel-And-Dimers hardly ever flock together, still, Great Clients can hear from the good deals Nickel-And-Dimers got cut for themselves. How do you think it will impact the perception Great Clients have about these deal-cutters. Why do you think people haggle with car salespeople and realtors but not with lawyers or doctors?

Car salespeople and realtors are notorious for “cutting deals”: “Buy now and I’ll give you a special deal.” In spite of the “special deal”, most people hate this approach because they know what the special deal really is: No big deal. Just a previously inflated price shrunk back to normal with lots of fanfare and manipulation.

My friend, Katie (not her real name) is a web designer. She got a call from Fred on a web design project. With lots of pep talk and promises on future projects, Fred convinced Katie to design a site with a serious drop on her fees. Fred manipulated her by telling her how good this would be for her portfolio. By the way, I’ve always believed that this “portfolio stuff” is highly overrated. Smart clients want to see value not portfolios. Well, she accepted the deal. And then two more.

Then she found out that Fred was just a broker between her and some real buyers. Fred knew that the lower price he could demand from Katie, the more money he would pocket. I have nothing against brokers per se. I too broker projects here and there. Over the years, thanks to my military training, skydiving and other experiences, I’ve become a damn good project manager and I have an innate talent to have people work together as a – real – team towards a common objective, so I co-ordinate large high-stake projects with functional experts. But I do have a problem that the greedy bastard Fred increased his money by lying to a good designer about future projects.

And rest assured that Fred will brag to his friends, that “If you need a super-cheap web designer, let me know. My contact is super-cheap and super-good.” Yes, she is super-cheap because she was manipulated by this scumbag, and she is super-good because doing excellent work is part of her DNA. By genetic design she doesn’t rest until she produces “WOW!” calibre work. And these are the people slime balls like Fred are seeking for “contract work”.

Then she participated in my Fee Audit and Protection Plan programme and learnt that clients don’t pay for portfolios but for value. With this realisation Fred was immediately out of the picture.

4. Nickel-And-Dimers Do Most Of The Complaining About You And Your Services

Nickel-And-Dimers are extremely good at complaining. They keep nudging you that they could get the same service next door a lot cheaper. Well, if they could, they wouldn’t be arguing with you. They would go and get that cheaper service. But that cheaper service won’t be the same.

There are some common factors in projects. Two of them are…

  • Certainty of successful completion
  • Velocity of progress

And your fee is a reflection of these two elements. The funny thing is that Nickel-And-Dimers want to maximise both factors while minimising your fees.

If I want to travel from New York to Los Angeles, I can take different options. The option with the lowest investment can be a pair of running shoes. That will give me a certain velocity of progress and certainty of arrival. But if I invest in a plane ticket, I increase both the velocity of progress and certainty of arrival. I, the buyer, can choose which option to take and I get what I paid for.

And of course this complaining can go as far as the courtroom. When these people make up their minds to get full refund on a project that failed (over 90% of failed consulting projects fail because of clients’ diminishing commitment – Dr. Edgar Schein, Process Consultation), they stop at nothing to blame their consultants and are willing to go to any length to recover their investments.

Studies done by McKinsey & Co also indicate that…

  • 75% of solutions don’t return a profit to the buying company
  • 50% of solutions don’t deliver the expected value

Now referring back to Dr. Schein’s research, we can see that more often than not it is clients who disallow consultants to deliver the value that was laid out in the agreements.
Nickel-And-Dimers complain because to them this is negotiation and they feel this is the only way to get a fair deal. They learnt in some Arab bazaar that haggling is part of life and without haggling they would be taken for a ride. So, they apply what they’ve learnt: “C’mon man, you can do better than that” or “Is this your best price”. The funny thing is that when you start taking value elements out of your agreement, they scream like the proverbial stuck pig. They want it all and they want it now but at a lower price.

In negotiation the experts teach that upon hearing the price you have to flinch and the seller is likely to reduce the price. Yes, likely, but who says that you have to be a typical “likely” seller. When the buyer flinches you can also recommend an appointment with a neurologist. Check what the buyer’s step is to this. Or if you’re not sure what to say, just say what – according to Alan Weiss – can be said in almost any situation: “What’s your point?” You will see some major league back-pedalling on the buyer’s end. After all, they expect you to argue and defend yourself and your fees.

But defence can be dangerous, as General Patton explained in his address to his troops in England, on 5th June 1944.

“I don’t want to get any messages saying, ‘I am holding my position.’ We are not holding a Goddamned thing. Let the Germans do that. We are advancing constantly and we are not interested in holding onto anything, except the enemy’s balls. We are going to twist his balls and kick the living shit out of him all of the time. Our basic plan of operation is to advance and to keep on advancing regardless of whether we have to go over, under, or through the enemy. We are going to go through him like crap through a goose; like shit through a tin horn!”

I believe in win-win situations, but you can create win-win only with win-win people. It’s a mentality. I also believe that you have the right to – figuratively speaking of course – wipe the floor with buyers who are pushing you.

The other problems is the so-called satisfaction. And Nickel-And-Dimers usually have a very twisted notion of satisfaction. They believe that if they buy a car from you, it is their statutory right to receive free driving lessons from you and at the end of the day you pay for their driving licences. Then they try to convince you that it is also your duty to service that car for free until you die.

As Jim Rohn says, “Liars lie, cheaters cheat and the perplexed are always perplexed.” And complainers always complain. The tendency for complaining is more than skin-deep. Just think of a tiger. It’s not just the fur that’s striped, so is the skin. And it’s striped in the same pattern. You can hardly change that. Then let’s stop trying.

5. Nickel-And-Dimers Prevent You From Attracting Great Clients

Nickel-And-Dimers take up so much of your time and effort that it can prevent you from attracting great clients. There are several facets of this problem. One is that they demand so much of your time and attention that you simply have no time left to diligently execute your marketing plan. For a while your practice is carried forward by momentum from past clients, but since you’re not planting today, tomorrow’s harvest is doubtful.
The other problem is that the quality of your service falls. One reason for that is now your time is occupied by taking remedial action to please Nickel-And-Dimers. And this action not only eats up your time, but also eats you up emotionally. And the real problem is that you act out these emotional problems on great clients. Yes, you may want to argue here, but don’t. Life is holistic and non-compartmentalised. If you’re hurt, then you will show that hurt feeling both at work and at home. Personally I wouldn’t want to be operated on by a surgeon whose teenage daughter has just run away with the Hell’s Angels, or whose family dog has just been eaten by a crocodile in the back garden swimming pool.

Clients come to you not merely for the service you provide (accounting, doctoring or lawyering). They come to you for the overall experience. And experience is a highly emotional thing. If you’re on an emotional roller coaster, your clients receive a roller coaster of an experience. It is your job to keep yourself on even keels, so your clients receive a consistent experience with you.

6. Nickel-And-Dimers Like Delaying and Forgetting Payments

Now you’ve secured everything. Really. The fat is in the fire, the die is cast, the gun is loaded, the fuse is burning, the sausage is sizzling, the stew is simmering, the jig is up, the fate is sealed, the stamp is licked, the goose is cooked and even the cat is out of the bag. It’s time for payment. And this is where the trouble started.

Nickel-And-Dimers left their wallets at home, they have to check the price with their spouses, dogs, cats or the spirit of their long-dead parrots. All in all, by now they’ve got everything they wanted from you, and as far as they’re concerned, you burn in one of the most pestilential pits of hell in screaming agony, before they give you even a penny.

Of course there are cases when Nickel-And-Dimers actually start working with you. You were generous and trusting enough to give them instalment payments. But the payments are not coming. The cheques seem to be in the mail every time you call but never seem to arrive. Then they get irritated by your calls to collect your money and threaten you that unless you stop making these “collecting” calls, they simply cancel the project and you’ll never see your money.

A few years ago I started working with a high-tech firm and the very first cheque the president wrote me bounced. When I asked him what happened, he told me that he suddenly took all the money from the company’s bank account to put down the downpayment on a new BMW. When I asked him when I could expect a real cheque, he went on his usual delusional journey about bills and expenses and tough times. When I asked him about why he bought the car, he said it was a special deal and he just couldn’t resist.

So, here is this guy with two cars in the driveway and no money in the company’s kitty. And he’s just too busy hiding from his vendors and dodging payments.

7. Nickel-And-Dimers Demand Huge Upfront Commitments From You Before They Commit To Projects

Nickel-And-Dimers expect you to jump through many loops before they make, not even a commitment, but a mere decision. Just think. The ultimate Nickel-And-Dimers are governments. Have you ever checked their retarded processes of hiring consultants? A few years ago a colleague, to the demand of her local government in order to win the contract, dropped all her clients. She started working on the government contract and then two months later the committee pulled the plug on the project. We know that the most amount of work goes into projects right at the beginning. Nevertheless, after putting in all the initial work, all she got paid was a pro rated hourly fee.

But at least that was paid for. But she was expected to climb the proverbial mountain of broken glass and rusty nails barefoot and butt-naked just to win the contract. And she even relinquished all her clients for this “big gig”. And the big gig bombed miserably. Then it took her a good six months of living on her savings to get some clients back.

So, be very careful about what sort of commitments you make upfront. Make sure that every commitment is a mutual commitment. For instance, if the prospect requests a proposal from you to think more about it, then ask for a small payment, which later you can lump into the project. The payment shows the prospect is serious.

8. Nickel-And-Dimers Demand Extensive Proposals Just To Steal Your Intellectual Property For In-House Implementation

Nickel-And-Dimers tend to call it the bidding process but realistically it’s nothing more than euphemism for the theft of your intellectual property. These people demand detailed information on everything and then with your information they often go to the lowest bidder for implementation.

Just think about the typical request for Proposal (RFP). It gives you a detailed guideline on how to write that proposal. So, the RFP creates a level playing field where are unique value is cut out of services and bidders are completing purely on price. And RFPs usually specify very expensive and detailed proposals. A proposal I’ve seen lately started with a 21-page executive summary. The whole proposal was 410 pages. The appendix section was a separate document some 700 pages long. Can you imagine how many hours it takes to create such a monster? And who’s going to read it all. Maybe a civil servant who has nothing else to do anyway.

9. Nickel-And-Dimers Never Become Repeat Clients And Never Refer You Anyone

This is just a foregone conclusion from the previous points. They create a pretty relationship dynamic and blame you for everything. So, it’s just normal that they spread only bad words about you and your services. What else can they do? What they don’t realise is that they are the only rotten apple in a whole barrel of good apples (great clients). And as we all know even one bad apple can spoil the whole barrel.

Summary

So, what is the lesson here? Sometimes it’s worth negotiating, reasoning and explaining things to people but reasoning with Nickel-And-Dimers is the same as wrestling with a pig. You get dirty and the pig won’t enjoy it either.

It’s the same as trying to negotiate with Hitler about world domination. No. Instead of arguing and reasoning, the Allies shoved a bomb up his butt and blew him and his empire to hell. Now I don’t suggest that you do that to your Nickel-And-Dimers, but you’re free to walk away, saving your sanity and start with a clean slate and live another day.

And what is the other option? You can try to please Nickel-And-Dimers and they’ll consume your life. They are the people who just take, take and take some more. And you may try to be the good-hearted Samaritan, but eventually you get run to the ground and resentment starts kicking in. As the former UN General Secretary, Dag Hammarskjold once said, “It is more noble to give yourself to one individual than labour diligently for the salvation of the masses.” Being a Nickel-And-Dimer is a serious disease, and most of us are not qualified (hopefully not interested either) to cure these hopelessly lost souls. The best we can do is just to avoid them with amazing accuracy and move on with our own lives.

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Source by Tom Varjan