What to say when prospective clients refuse to pay your deposit

What to say when prospective clients refuse to pay your deposit
Written by: Karl Sakas

What happens when a new client doesn’t want to pay a deposit? An agency owner came to me with a common situation—one of his new clients had pushed back against the agency’s 50% deposit policy. The underlying client said it made him feel like the agency was acting like he was about to go out of business. He insisted that he ran a respectable firm, and was happy to pay in full upon satisfactory completion.

My first step was to reassure my client. It sounded like his client was taking the policy personally—it’s not just about the money, it’s that he doesn’t like being distrusted to pay. Make it clear that you require a deposit from all clients—not just them.

Be firm but empathetic

We know it’s important to get a deposit up front. To be diplomatic yet firm, you could say something like “This isn’t specific to you; it’s our business policy for all clients. We’re looking forward to doing the work.”

This may segue into a conversation about deposits in general. For example, your client may also require deposits from their clients, which will help them understand why you do the same.

You could also say that the final amount is due as a post-dated check upfront. If the client continues to push and say they’ll pay “soon after” the work is completed and delivered, you could deflect—say “in our experience, accounting isn’t always as prompt as our clients in marketing.”

For example, you can say your policy is a 50% deposit, but you’ll relax it to 25% if they agree to make three interim payments of 25% on a pre-agreed schedule—and work stops if they need more time to pay.

Ultimately, your goal is to find an approach that protects you while making your client feel safe. They may have unreasonable expectations—but there’s usually a solution. Of course, this all comes down to how much you want a particular client—and how much they want to hire your agency.

Use caution when adjusting your terms

If you decide to adjust your deposit requirement for a client, do it with caution. Once you show you’re willing to negotiate on one thing, a client might keep pushing. If you present the final deliverable without payment up front, you can’t be entirely sure when you’ll get paid. If they’re conscientious, it’ll be soon after, but if not, you could have to wait a month or more. All of an agency’s power is before the client has 100% of the work.

Overall, you want to balance being warm with being firm—you’re running a business, not a charity. You are there to help them succeed, but you also have an agency to run. Continue to position your agency as your client’s partner… and decide where you’ll draw the line.

Question: How do you respond when a prospective client doesn’t want to pay a deposit?

Turn your agency headaches into profits…

Get a copy of my popular eBook, Don’t Just Make the Logo Bigger: Taking Clients from Painful to Profitable, by filling out the form below.

In addition to the free eBook, you’ll join 2,500+ agencies and get my articles delivered twice a week, directly to your inbox!