The Business Part of Business

When is New Revenue Bad?

When is unexpected new revenue a bad thing?

Before you guess “never”, or “when you aren’t prepared to handle the new work that new revenue creates”, stop. This story will be going in an entirely different direction than you think.

Those things could be it, by the way, but this discussion of new revenue focuses on unexpected events. What happens when circumstance forces you to ask old clients for new revenue?

Seriously. What are your options when business change happens, and you have to ask clients for unexpected money?

Assuming your margins—no comment as to how you measure them—are high enough, you always can choose to eat extra costs. But what about when that isn’t possible or you just don’t want to do it?

Or for that matter, when you see the opportunity to make some extra money and think I want me some of that?

I thought of this when I came across a story at WPTavern, where a quote from one WordPress consultant caught my attention:

“This puts me in a terrible position,” WooCommerce customer Leon Wagner said. “I have 10 client sites on Canvas. They look beautiful and the clients are happy. So these are done deals, I’ve been paid, and do occasional maintenance. Now you’re telling me I have to go back to each of them and explain that because you’re discontinuing this theme, my clients will now have to pay me thousands of dollars to port their sites (with no obvious improvements) to new themes. Pretty sure I’ll just lose most of those clients.”

Everything Mr. Wagner says is likely true, including that last line about losing his clients. But it needn’t be. We’ve seen this before and guided our clients through the unexpected new revenue minefield that to their clients was “unexpected new expense”.

The problem—and solution—are all about your approach.

I don’t know Leon Wagner. But I do know plenty of WordPress consultants. They, like other more-geek-than-businesspeople types, often suffer from relatability problems. Check out this story about The WordPress Community; it represents the problem well.

I’ve been outspoken about my concerns for the way WordPress parent Automattic manages it, and genuinely believe there are reality distortion fields making the problem worse. But they aren’t universal; some very successful WordPress Community stalwarts get it.

Often, though, it’s too easy to get caught up in what you know and ignore the real business change issues you face.

The New Revenue Paradox

The solution is wrapped up in humility, and empathy.Geeks are often less vested in those traits than others, but there’s a lesson here for all of us.

One long-term client here faced this issue a while back. The software he’d been putting all his clients in had a large upgrade that created a problem very much like the one in that article at WPTavern. There was virtually no choice for his clients; they needed to upgrade.

It was going to be expensive, and it was likely they’d blame him.

We approached them by explaining the situation. The software company had made what they considered to be a significant security improvement, and it left clients no options other than upgrade or drop the software (and us).

No one did either. Not one of his clients left. Not one was happy either, but when we explained what had happened honestly and openly, the sky didn’t fall. And the new revenue was huge.

In fact, that same client faced a similar—smaller—event a few years later. The results were identical; all clients stayed, and unexpected new revenue hit the corporate coffers.

Yes, you can mess up unexpected new revenue events. And yes, clients will usually complain about unexpected charges. But by approaching new revenue events with humility and honestly, they often become wins—across the board.