What losing a $10,000 client taught me

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THOUGHT OF THE WEEK

What losing a $10,000 client taught me

(approximately 13 min read)Brace Yourself! Today's a long one...and btw, whether you own a business or not, this applies to you. If you aspire to any type of leadership role, then read everything below.Here we go! In this world of business, especially online, everybody wants the “high-ticket” client. The 1 or 2 clients that’ll quickly put you in that 5-6 figure/month range…so $10,000+ per month.And so many of these internet gurus will tell you things like;It’s so simple….just find the clients, close them, then outsource the fulfilment of the service.You don’t even have to do it yourself. You can just hire someone from overseas to do the work for you. Well let me tell you a story.When I first started my email marketing agency, I did just that.Well to be more specific, I attempted to do that.Even though I knew how to do the fulfilment, to be honest, back then, I wasn’t as good as I thought I was…and I was determined not to do the work.So initially I partnered with a guy (American btw) who was supposed to “Whitelabel” it for me.Basically that means he would do all the work behind the scenes and would just basically slap my name logo on it.We split the money.It seemed great!He didn’t have to find clients and I don’t have to do any “work”. Win-win. Right?!Not so fast!Now, this model is more common than you think and is actually a great way to do business when done properly.Most of the major companies in the world do just this. Costco, for example, doesn’t manufacture a lot of their “Kirkland” brand products.Even the mega fashion house LVMH don’t manufacture all their clothes.Contract Factories do the manufacturing.And often the same factory, will manufacture for different brands and just slap their individual names and label on it.So white-labelling is not wrong or uncommon.But in my situation it did not work.So what happened?A good friend of mine referred a potential client to me, who I went on to close for $10,000.Yes! 1 Client paid me $10,000 USD.(that USD be hitting different when you're a Canadian 😆)I remember when that invoice cleared…it was like WOAH!SO THIS IS ACTUALLY POSSIBLE! THIS HAPPENS!So I thought I was set!Invoice paid in FULL!My guy was ready to do the fulfilment, so I sent him his portion in FULL!And then the work I was supposed to deliver to the client started rolling in….When I tell you, I was shocked and appalled and in fact I was FLABBARGASTED  at the lack of quality, it’s hard to describe.Typos, grammatical errors, clunky copy, ugly designs, delays….just all round sloppy work!It was soo bad and took so long, going back and forth with the client, that eventually I had to step up and re-do the work, for the sake of my name and integrity.Work I had already paid my partner to do.Eventually, after re-doing the work, and bringing it up to my specifications and the client’s specification, the client felt like our working relationship had come to a natural end.And so he did not renew further.What I believe could have been a long term thing was cut short.Even though I did resolve a lot of the issues and eventually delivered, I do believe a lot of trust was lost because of how we under-delivered at first.When he left, I asked for his feedback of what we did well and what we could have improved on and this is what he said… I want you to take a moment and read it!

Yo!!! When a client stops responding to your messages, you’ve lost them!So Listen! When I tell you this piece of feedback was sooo gut-wrenching and also super encouraging, I cannot even begin to fully explain it!I was broken by the fact that I wasted so much of his time, and yet I was encouraged that he recognized my stepping up, taking responsibility and making it right in the end.So how did I get myself into the position in the first place?When I say I didn’t have the right partner, it sounds like I’m blaming the guy, but honestly I blame myself also.This experience taught me many things!Here are 4 lessons;

1.) You gotta get your hands dirty!

When you first start out, you CANNOT (SHOULD NOT) just hire out the fulfilment without knowing how to actually do the fulfilment yourself beyond just a beginner level.I don’t care what these gurus tell you….you gotta get in the mud!Remember what my ex-client said,“The first meeting was missing instructions on how we would work together. For example, what the meeting cadence would be, where documents would be kept, what communication channels would be used, who would be responsible for what, what would the Project management cadence be, and so on..”

That’s how much of a novice I was.

• I didn’t know anything about centralized project management 

• I didn’t have systems or process for workflow or QA

• I didn’t vet my partner well enough to know if he had these things in place

• I didn’t understand the psychology and expectations of that tier of client

A $1000 client, $5000, $10,000 client do not think the same way! I had no knowledge of this.All these things I didn’t know or have in place.And I didn’t vet my partner to see if he knew these things or had them in place because I didn’t know what I didn’t know.Now remember; I was fortunate enough to actually know how to do the fulfilment, I just didn’t want to do it.But in the end because I had the skills I could step in and make it right, even though a lot of damage was already done. How about you?If you want to start an agency, company (or lead anything for that matter), and go to outsourcing right away, what do you think is gonna happen?If you don’t know how to fulfil, how will you know what fulfilment is, let alone good (or great fulfilment)?For example in email marketing (which is what my company does),What constitutes good results in (20% Open Rate vs. 50% Open Rate, 2% CTR vs. 17% CTR)?What if I told you that varies depending on the specific campaign?How will you know who to hire beyond just going on Fiverr and picking the person with the prettiest profile?And how will you know how to interview them and actually assess their competence?You won’t!You’ll be at their mercy because you won’t even know what to ask.The rule to delivering on excellence for your clients and customers is this;Know enough to be dangerous. You have to know enough to tell who’s actually skilled.Only then do you go and find people who know more about that thing than you do, and can take it further than you can. Why do you think Bill Gates, Steve Jobs, Mark Zukerberg, Sam Altman, all started as the actual coders/builders/programmers?Because the greatest and most successful leaders know the product.Then as they grew, they hired people better than them to take it further. But you HAVE to start by doing it. You CANNOT skip steps.And that’s the mistake many of us make - and that I made initially.Trying to go from little or no real experience to being a boss. I wasn’t ready yet cuz I hadn’t put in the reps.So…start by learning & doing the thing.That will give you knowledge & confidence when hiring and speaking to potential clients. You don’t know what you don’t know. And the only way to get to know those things, is to do the things that will naturally reveal them over time.You gotta get your hands dirty!2.) You’re a coach & mentor before you’re a bossWhen you do get to the point where you start hiring, you will have to do a lot of coaching & mentoring.I’m sorry to tell you, you’re not just gonna completely outsource the whole thing then go piss off in Thailand or wherever all the digital nomads collectively gather to fake brag. The job of a leader or “boss” is really to train and coach your people.I always tell my team members,“My job is to provide you with all the tools, support, and help you need to do your best work. I can’t do your job for you, but I can put you in position to excel at it.”What does that mean?That means on a professional level, giving them honest feedback that is seasoned with grace and truth. Grace to understand that we’re all learning, and truth to challenge them in areas that they need to grow in.It means finding resources specific to their role that they can use to get better. For example, that might be a design course for my designers or copywriting tips for my copywriters or empathetic leadership training for my account manager. Basically I’m always thinking, “How can I help them”.It means that if they fail to meet the mark on something, before I blame I have to FIRST ask myself “Did I give them everything they needed to succeed?”And I have to be brutally honest with myself.It means keeping an eye on the team dynamic.Doing your best to manage the different personalities and ensure good chemistry both within the team and between your team members and the client.Remember how my ex-client told me I should have been on the calls with the other guys at the start?Yea, I failed at that!And on a personal non-professional level, it means actually caring for your team as people and letting them know that. At the end of the day, beyond employees or contractors, these are real human beings with real families and real goals.As real as your goals are to you, so are theirs to them.So you gotta actually care for them and let them know that you do.You can (and should) definitely build systems to make all this possible.But the main point is, running a successful business requires a strong culture of coaching and mentorship.And that takes time to build.I know all this because this is where I’m currently at now.I'm at the position where I’m back to hiring, and I’m doing a lot of this coaching and mentoring with my team.And I’ll add, that this style of leadership will reduce staff turnover and increase satisfaction in your team members…which will in turn drive better results for your clients and your business.And if you think I’m making this up, hear this quote from the book, Trillion Dollar Coach. The book talks about the leadership strategies of Bill Campbell, who coached some of the most successful entrepreneurs and companies in modern history including; Steve Jobs, Larry Page, Google etc.The quote says,“Your title makes you a manager, your people make you a leader…Great people flourish in an environment that liberates and amplifies their energy….Good managers care genuinely deeply about their team, both personally and professionally. Their goal is to make them better in life.”

3.) Document what you’re doingYou should be thinking of hiring & delegating from Day 1.It might sound contradictory to the first point, but it’s not.You CANNOT skip step 1…you have to get your hands dirty. But what separates a $1M from a $10M from a $100M company?People & ProcessesI call it the 2 Ps of Profit - People & ProcessesGood people need good processes to create great outcomes.And good processes magnify the impact of good people.So people refers to human - people who are really good at their jobs.Processes refers to how they do their jobs…so things like software tools, or chain of command or protocol or workflow.All these boring things that sound really corporate are the things the make companies run smoothly.So from Day 1, as you’re doing the fulfillment yourself, record training videos of what you’re doing and why you’re doing it that way. This will be incredibly important once you start hiring because now you will have a library of resources that you can use to easily do the second thing i mentioned - train, coach and mentor the people you hire. So rather than trying to do it all later, you’re stashing as you go, which makes it easier later on.I know of one guy who didn’t start doing this until he had well over 10 clients - the problem with waiting that long was that now he was overwhelmed with work, and so were the new staff he was trying to bring on. Without adequate time to train them and do proper fulfilment, staff members got burnt out. So from the beginning you want to document and start building what we call SOPs (Standard Operating Procedures).

4.) Sacrifice the big bag for the bigger bagDelegate as quickly as you can - even if that means your take home is initially a little lower.Again sounds contradictory but it’s not.In my agency, I ran some numbers and realized that if I continued to do all the work, the value of my time would essentially equate to about $25/hr and I couldn’t scale past a handful of clients. But if I started delegating/hiring after I had as little as 2-3 clients, even though that would temporarily mean I took home less, it would;

1.) Exponentially increase my company’s ability to take more clients

2.) Quicken our executional efficiency (basically we could do more quicker)

3.) Free up my time to find new clients and build better systems

4.) Increase my take home by the time I got my next client 

5.) Give peace of mind because neither me nor my team were overburdened with too much work. 

So you want to hire and delegate quickly, but not too quickly.How do you know when’s the right time?

• First do the fulfilment yourself for the first couple of clients. You’re doing this not even for the money but for the experience and learning.

• Then give yourself a very conservative take home minimum pay check

• Invest the difference to start hiring, delegating and building systems

• Use the new time you have to scale. 

So there you have it….these are some of the things I wish I knew when starting out.Had I known this, I probably could have made $30,000 - $60,000 from that client alone…but you live and learn.WOOOOHHH!!!! THAT WAS A LOT!But there you have it.This is the real real of running a high revenue business, that many internet heads won’t tell you; 

1.) You gotta get your hands dirty!

2.) You’re a coach & mentor before you’re a boss

3.) Document what you’re doing

4.) Sacrifice the big bag for the bigger bag

Whether you're starting a company, already running one, or have no plans to do so, I hope you found something in this helpful!

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That's it for this week.Love you,Shopé

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