4 Signs That Your Design Contract Is Going to Be Dropped

By Ted Leonhardt

Lost contract illus[1]I used to be terrible at confrontations, hiding my head in the sand to avoid bad news. I just wanted everything to be all right so I could do the work I love and be happy. Pretending the problems weren’t there was the best way I knew to avoid the bad feelings that sweep over me (yes, they still sweep over me) when all is not well.

You could have called me “strategically smart, tactically stupid” during my early years running firms. Though I was, I must say, excellent at attracting new business, I was terrible at client management and at managing my own team. We lost a lot of contracts because of my mistakes.

Happily, I did improve, and I did learn some vital lessons on how to know when a design contract is in danger, and what steps to take to avoid losing the deal.

Bad Sign 1: They’re not responding.

You’ve made an important creative presentation to your client’s team and it went okay, but somehow it didn’t feel quite right. Since then, your contact at the firm hasn’t returned your emails or calls.

You know this is a really bad sign. And the more you think about it, the more you begin to understand why: The presentation didn’t go “okay” — it went worse than you thought.

Your only hope for turning it around is to let your contact know that you flopped and that you must get her perspective. The sooner you act, the more likely you’ll be able to turn it around. This is your opportunity to remind them why they selected you, and show how you can help.

The first time this happened to me, I carried on as if nothing was wrong. Time went by. By the time they called me, it was too late. “Ted, I’m sorry to tell you this, but we hired another firm and we’ve just now approved their design for production.” Game over.

Bad Sign 2: They’ve hired a competitor.

A colleague who runs a web design firm told me his sad story. He’d heard that a direct competitor had been hired by his client, who told him the competitor would be responsible for a completely separate area of the site: “It’s okay, Jae. We’re really happy with what you and your team have done for us, and X firm will be working on an entirely different project, so no prob.” Right.

Six months later, the competitor took over the whole site. Jae’s client team had liked him, but they weren’t in a position to make final decisions.

Could he have saved the design contract if he’d acted when he first heard the news? Maybe not. But Jae knows now that he should have asked to meet with others in the client company to propose what his firm could do if they had a broader contract. If he’d pulled that off and kept in touch with the new contacts, he might eventually have had the larger piece of business. Not taking action pretty much guaranteed he’d lose the contract — as the saying goes, “if you don’t ask, ‘no’ is always the answer.”


Related reading: 13 Key Clauses for a Simpler Design Contract


Bad Sign 3: Corporate reorganization

There had been talk about it for months: Sales had been terrible; red ink was running fast and hard; their bankruptcy was even discussed in the financial press. Then a major global competitor purchased almost half the company and installed a new management team. That was good news for the company, but very worrisome for the contractors. With cost-cutting and consolidation of all outside service providers, fear was the order of the day amongst the creative service providers. Many lost their contracts.

One small design provider saw a way to help the company, and reached out to my firm — a larger, international agency — to compete for the global branding assignment. It was work that was sorely needed if the corporation was going to survive. The combination of small local design firm with a global branding consultancy resulted in a win: The contract was retained and expanded.

Bad Sign 4: From Fast Pay, to Slow

It was a small client, financing a really big dream with her personal savings. Everything had been grand. The client had a wonderful higher purpose behind her work and everyone on the team was loving it. Best of all, the client paid the invoices instantly, gave great direction and feedback, and loved the work. The project itself was truly standout, certainly show-worthy — a fascinating combination of film, social media, digital, traditional ads, and direct marketing.

The team was simultaneously creating and marketing the product with an 18-month window to produce and gain results.

The product launched, and the client became slow paying. As my old CFO used to say, “never work for a client that’s spending their own money,” and that was definitely the case here. No one saw it coming.

With sales not up to expectations and the client’s funds dwindling, the client begins looking for other solutions to get sales going, and work ends for the start-up team.

What to do? Know from the start that an 18-month timeline means that things will change at the end of the project window. Either plan from the start to be looking for other work, or find ways to help your client meet their sales needs with a new scope and contract.  

Finally

Lack of response, competitors being hired, corporate reorgs and from fast to slow pay are all signs of change that can signal a fundamental shift in your relationship with the client. When that happens, you must act quickly to have any hope of retaining the business.

In each of these situations, the steps are the same:

  1. Understand what’s changed and why — contact the client to find out.
  2. Determine how to help your client with the new situation.
  3. Remind them why they selected you in the first place.
  4. Show your passion for the project.

It’s easy to get blindsided and discouraged when your design contract is threatened. Next time it happens to you try these steps. Even if you don’t retain the client, you’ll learn something about what happened, maintain a contact, and feel more empowered — ready to approach a new client with confidence.  

I haven’t always been able to turn these situations around, but I have saved a few by acting quickly and decisively while keeping my head out of the sand. I hope you can too.

Ted Leonhardt is a designer and illustrator, and former global creative director of FITCH Worldwide. He grew The Leonhardt Group into a powerhouse design agency that employed over forty people and annually billed $10 million to clients including Nissan, Nordstrom, Charles Schwab, Electronic Arts, and Microsoft before selling the firm to FITCH. He is a graduate of Burnley School of Professional Art in Seattle. His specialized approach to negotiation helps creative workers build on their strengths and own their value in the marketplace.


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