My Credit Card Or Yours? Your Marketing Relies On Smart Financial Decisions.

My Credit Card Or Yours? Your Marketing Relies On Smart Financial Decisions.

Guess What? Your Marketing Company Can Make Things Really Simple For You.

They can pay for your hosting, your domain renewal, your email software, and your social scheduling software. They can itemize all of those expenses for you and then send you one bill.

Easy peasy. Lemon Squeezy.

Then why does my company have a policy of not doing that? Is our intent to make things harder for you, our customer? After all shouldn’t it be a part of my job to make things easier for you?

I want to share two stories with you that illustrate the downside of the easy-peasy-one-bill method.

Cash, Baby. Cash.

I was working with a client once who needed to purchase a new domain. Without blinking my customer reached into his pocket and handed me a $20 bill to buy it.

In the 15-plus years we’ve been in business, I’ve never been handed cash so I was at a loss as to what to do. In the spirit of “easy peasy,” I took the cash. It wasn’t until later in the day that I realized that taking the cash was a mistake.

The fact is, we don’t have a process for cash. Cash doesn’t give us a good reference point for tracking purchases. As for the domain, it was less than ten bucks. If I had purchased it, I would’ve had to issue a credit or change. It’s just plain messy and I realized that having a process for how money flows is equally important to a project as the project tasks themselves.

The twenty dollars in my hand made things easy for my customer in the short term, but would have made things harder in the long term for both of us.

Since I’m a long term kinda guy, I gave him back his twenty bucks and then logged into the account where he has all of his other domains and purchased the new domain using his credit card.

Now instead of having twenty dollars in cash floating with a credit associated with it and another potential domain account, my client paid exactly what he needed to pay and the future of his domain and account was secured.

Easy peasy. Well, in the long run.

There’s More To It Than Convenience

Let’s get back to the topic at hand and focus for a moment – not on the cash – but on the fact that his new domain was purchased using his credit card.

It’s our policy to never pay for third party products or services on behalf of our customers and then get reimbursed.

There are two reasons: one benefits us and one benefits our customers.

For us, there’s one less thing to track on an already long list of credit card items.

For our customers it means business continuity.

So let me tell you the second story.

Years ago, before we drew a hard line on our policy, we did pay for third party services using our credit card and then let our customers reimburse us. For a very short amount of time everything went smoothly.

Then one day my bank cancelled my credit card account because the fraud prevention department noticed odd purchases coming from overseas. In the end everything worked out for me, but the story didn’t end well for one of my customers.

Over the next few weeks, their domain expired and was not renewed because my credit card was no longer valid. Since the emails were being forwarded to the customer, I didn’t know. And since upon receiving these emails, they assumed that I was taking care of it, they said nothing.

The domain lapsed, but we were able to get it back and get their site up and running again. The problem was resolved, but we suffered some professional embarrassment as a result. It was at that moment that we decided not to bill using that method.

But This Story – Or Its Lesson – Isn’t About Me. It’s About You And Your Business.

Today, when I meet with businesses who are interested in working with us, almost universally they are being billed by their developer or marketing company or consultant for third party services. But that’s not the worst part.

Here are a few horror tales that will hopefully persuade you not to let another business bill you for services that are essential to your business.

In one case, a developer had hundreds of domains registered to himself, but purchased on behalf of his customers. Financially and legally, the domains were his. So when a business decided to hire us, they were shocked to learn that the domain they thought they paid for wasn’t truly theirs. They got locked into a series of battles that resulted in paying an extra “release fee” to the developer in order to get their domain.

In another case, a business was paying their developer for fees related to a third party service that integrated with the customer’s website. Once day the service stopped running. The company called their developer and asked why and the developer claimed that the service was at fault.

It turns out that the developer was having financial difficulties and while they were billing the customer for the service, they were not paying the service provider. Ultimately, the customer had to take over the service payments, pay all of the back months of bills and sue the developer for the payments they had made.

Finally, and I’m sure you’ve heard of a variation of this, one of our clients once hired a small marketing boutique that was staffed by about half a dozen employees in a nice office space in a trendy part of town.

One day, their hosting stopped. Their website; gone. They called the marketing company and got no answer. The owner simply vanished.

As it turned out, the marketing boutique had all good intentions, but they were deceptive in their salesmanship. They had no office of their own, they were simply “borrowing” space from a friend. There was no staff, just friends that the owner assembled to make the company seem bigger. What did exist however, was financial difficulty. The owner couldn’t make her credit card payments and was forced to cancel all of her accounts.

This story has a weird silver lining. The owner of the company did right by each of her customers and got them where they needed to be, but not before causing great inconvenience and service disruption.

Where Do You Fall In This Story?

Do you know who really owns your hosting or domain or email software? Are they owned by and being billed to you or to a person or business that may or may not be able to keep paying the bills?

It is without question in your best interest to take all of those third party services and pay for them at your convenience with your money. This will not only guarantee you that any service disruption won’t blindside you, but also give you the freedom and flexibility to change consultants, developers or marketing companies. I’ve written before about being held hostage and I’m shocked that it continues.

Not because there are people out there that will attempt to hold you hostage, but because so many people are naive enough to allow it.

Let me take a moment to flip this topic around and add a caveat. There are cases where a developer or a marketing company are reselling services such as hosting. In cases like these, the provider is usually providing some value on top of the initial service.

For example, my company hosts the websites of many of our customers, but we purchase our infrastructure from Rackspace. Although we are utilizing Rakspace’s service we have refined the environment for the needs of our customers. We also provide managed services such as software updates and maintenance. This goes beyond simply passing the bill from one point to another.

This isn’t bad and in many cases is necessary, but your obligation as a business is to have an exit strategy. Your obligation is to know what is yours and what is not. Your obligation is to know exactly what has to happen and what fees you will incur if you ever opt to move.

If your provider refuses to dialog with you on this then that’s a serious red flag that you need to consider in order to maintain uninterrupted continuity in your business.

Do you have an experience like the stories I described? If you do, I’d love to hear it.

You can contact me on Twitter, Facebook or Google Plus.

Subscribe to our newsletter for more content like this and don’t forget to subscribe to our podcast for extended discussions about marketing and business strategy. If you do subscribe to our podcast, please rate and review it. You have our thanks.

Ralph M. Rivera
Hi, I'm Ralph! I'm a web developer at Rahvalor Interactive, a creative marketing services company that I founded in 1999 with my wife and business partner Carol Lynn. In January 2012 we created Web.Search.Social as a branded service offering that brings enterprise-level services to small businesses in an affordable way. I'm also founder and CTO of Podcaster's Toolbox, a SaaS platform designed to help podcasters plan, produce and promote their shows. I teach web development at Manhattan College in New York City. Carol Lynn and I are home based near the Jersey shore but we're currently location independent and traveling the country for a year, working and podcasting. I'm also trying to build a flux capacitor, but that's not going as well as the other stuff I do.
Ralph M. Rivera
Ralph M. Rivera
  • Another more hidden issue concerns developer licenses. I develop a lot of sites with WordPress and have developer licenses for Gravity Forms and a few other popular plugins. Now I’m at a point where I’d like to use an alternative to GF, but if I don’t renew my developer license, around 20 clients will be affected. Their sites will continue to work but they won’t be able to update the code unless they pay for individual licenses, which is an unexpected cost. So I’ll renew this year and work on a longer term exit strategy, but it’s a heads up to me for future developer licenses and should be a heads up to anyone having a website built. Make sure you understand what features are under license, who’s paying and what’s the long-term plan.

    • I had to throw in my two cents here because you are so right. It’s great to have the developer licenses but yes, clients should understand what that means. We do tell people that they have use of our licenses for certain things but we always put that in writing so they know what those things are and what the consequences are if that changes. Fortunately, it’s usually easy enough for a client to get their own license if they need to but it would be an unpleasant surprise if they weren’t aware.