Milestone Strategy

[g_urgeghe]

Hello everyone, I hope you are safe. I mainly deal with branding and packaging design, I prefer working with fixed price contracts. i set the contract with 2 milestones, first one i develop the project and deliver the layouts in medium definition jpg, when the customer approves the designs I ask for the release of the first milestone and found the second one. once the second one is funded I release the working files and the customer checks all the outputs and if satisfied releases the last one and closes the contract ... but sometimes before releasing the second they ask for a small changes or other little things and do not provide the stuff i need (dieline, barcode, new color code, etc) and disappear for weeks with 99% of the work done. do you have any suggestions to avoid this problem? What is your strategy?

[feed_my_eyes]

You should only do the amount of work that's covered by each milestone payment. If you're doing 99% of the work on the first milestone, then the payment should be 99% of the project total. 

The way I usually work is that 85% of the payment is due upon submission of the first draft(s) (but this is essentially the full fee that I want to get paid for a project), milestone 2 is 10% for revisions, and milestone 3 is 5% for a final round of revisions. If the client doesn't need any revisions after the first milestone, then they don't have to pay for the second and third milestones (because I'm not doing any work), so it doesn't matter if they disappear or don't activate these milestones. This also gives the client an incentive to not ask for unnecessary revisions, because it will save them money.

But the above only works for me if the deliverables are well defined and the client has clearly communicated their likes and dislikes; if not, I go hourly. I would rarely agree to a fixed price for a branding project, to be honest.

[wlyonsatl]

Giacomo U.,

If you formally submit work for a milestone using the green "Submit" button, that starts the 14-day automatic payment period. During that time you could make any requests the client makes that you think are reasonable.

If your client disappears during that 14 day period after you submit the work, Upwork will still release the funded amount of escrow for that milestone 14 days later. Your client doesn't need to be responsive in order for you to get paid.

[g_urgeghe]

Hi Christine ... thanks as always for your valuable suggestions. Your strategy is excellent, months ago I was asking for 70% in advance, I'm only afraid that by asking 85% of quotes around $ 3000 the customer will not accept, paying the 50% maybe he will feel more comfortable (maybe I'm wrong) .Will, thanks for your suggestion. I know that I can request payment, but considering that the work is not completely done (a small part is missing) I believe that the client may not be happy with my submission and maybe it could compromise my feedback.

[feed_my_eyes]

You could break it down into smaller milestones if it makes you and/or the client more comfortable; the key is not to do 99% of the work if you've only got 50% of the payment in escrow.

[wlyonsatl]

Giacomo,

I think it's a bad idea to send some clients the completed work for the only or final milestone on a fixed project via any means other than formally submitting the work about 90% finished with notes on what I know remains to be done. I do not mention any expectation of payment with the submission until we work together to complete the milestone work over at least the next 14 days.

If you send the final version of such work by email or other means, a dishonest client can take it, close the project and any money in escrow will be returned to the client.  

[feed_my_eyes]

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Will L wrote:

If you send the final version of such work by email or other means, a dishonest client can take it, close the project and any money in escrow will be returned to the client.  

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No, clients can close the project and request a refund, but they don't automatically get it. The freelancer would have to accept the refund request first. https://support.upwork.com/hc/en-us/articles/211062058-Get-an-Escrow-Refund

Anyway, the original post wasn't about how to get paid for a milestone, but how to break up milestones so that you're not doing more work than the client has funded.

[richard_wein]

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Will L wrote:

If you send the final version of such work by email or other means, a dishonest client can take it, close the project and any money in escrow will be returned to the client.  

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It makes no difference. Either way the client can close the contract and the only way to force payment is to go to arbitration. 

P.S. That said,  submitting work through Upwork means that you will have it on the record if you do go to arbitration. 

[wlyonsatl]

Yes, Richard W., your PS was my point.

Just because there is no perfect solution doesn't mean you shouldn't do what you can to improve your chances of getting paid by a recalcitrant client. Even small things can make a difference.

And arbitration is NOT the only way to get paid funded escrow. But let's not go down that road - the subject has caused much wailing and gnashing of teeth when discussed here in the past.

[gina-herrera]

Hi Giacomo, I have the exact same specialties as you; branding and packaging.

I actually break my projects down into smaller milestones depending on the final deliverable. If I am working on packaging, I split into concept work for the first milestone (2/3rds or 3/4s of payment, due upon presentation of concepts, because those are ideas someone can take and try and get a lower end designer to execute, so that's my way of protecting myself). then the second milestone includes 3 rounds of minor revisions (font, color, and some layout changes, swapping out stock imagery, text edits, things of that nature), and the final release of the files. If they come back with more changes, I will take care of ONE round of revisions after the final files are sent, and if they need more I charge for that.

If I am working on branding, the logo is again broken into smaller parts - moodboard, concept work, final release of files. For the brand book, I present a rough draft with all text typed out, sketches for icons, photos for a moodboard and photography direction, color palette, etc. and that is the first half of the payment - it is not necessarily aesthetically pleasing or organized, because it is a draft. The next milestone is again, 3 rounds of revisions, and release of final brand book.

As far as trying to get people to submit their materials in a timely fashion, there's not really anything you can do. If people disappear on me with no communication, I really just try not to work with them again, which isn't hard because I don't considering branding "ongoing work" - in my experience, usually we are providing brand guidelines in order for them to be able to communicate better with more junior / cost-effective designers for permanent needs in the future, while I move onto a whole new brand and new client.

My only other suggestion would be charging a "disruption fee", meaning that if they are not responsive and wish to resume the project they need to pay extra, but I don't do so because I feel it would leave a bad taste in the client's mouth. What I do make sure that I do though, is in my contract, I spell out VERY clearly that if they disappear or take longer than 48 hours to get me feedback, their deadline is null and void unless they give a clear, valid reason and we agree on a new due date. While I always do my best to meet deadlines, clients who are responsive and provide materials in a timely fashion always come first and I make sure they understand this. Hope this helped 🙂

[resultsassoc]

For contracts that are of significant value to the client (branding, in my mind, is one) I usually go for a fixed price and rarely exceed 50% of the project's cost for milestone one. I don't do branding, I do strategy work and deal with client existential issues. I generally use a Socratic approach, and the final "picture" becomes increasingly visible as we work our wa through.

With established clients (by the time I had to retire, those were the only kind with which I dealt) I'd work out tailored payment plans, usually back-loaded, and not worry about things.

[gina-herrera]

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Bill H wrote:

For contracts that are of significant value to the client (branding, in my mind, is one) I usually go for a fixed price and rarely exceed 50% of the project's cost for milestone one. I don't do branding, I do strategy work and deal with client existential issues.

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Because my version of branding work is deeply conceptual and involves many hours of research, sketching, moodboards, and conversations with the client to really discover the ins and outs of their brand vision, I don't feel comfortable charging less than 2/3rds to cover that. I suppose I could break it up into smaller parts but the milestone where people sometimes "flee" is after I present the concepts and decide that they don't like it. Only happened twice to me out of over 100 clients, but it happens. The revisions and finalization stage is usually only a matter of an hour or two. So as long as I state that the payment is due after I present the concepts (zero files released whatsoever), they are bound into paying it to cover the intense work that went into that stage and I owe them nothing other than the hours I put in to execute these ideas. Then when they proceed with finalization, that's when they get the files (or they can just take the draft version, that's fine too as long as I don't need to put any further work into it before the final milestone is funded). And as mentioned that also prevents them from taking my long suffered over ideas to someone cheaper in another country who has no problem ripping off others' work to make a buck. Obviously it's up to the poster how he wants to split that up, but that's how I operate and based on his skill level and hourly rate appearing very similar to mine, I'd say he's probably best suited to do the same.

There are of course many designers who don't put in research or do competitor analysis stuff or multiple rounds of moodboards and therefore don't feel like they are losing as much money if they split it 50/50, but you know... you get what you pay for.

[resultsassoc]

Gina,

There is nothing wrong with your approach, which is defensive in nature- prevent an unethical client from stealing your work. One reason most of my work is done with offline clients is that, to win a competitive proposal, I have to identify the actual problem the client is facing, not the one he thinks he is facing. Then I've already given away more than half the value I'll ever create. So, I have to back up two steps and demonstrate through my questions that I'm worth talking to. Then I have to engage the client in exploration of a fit. Which is why I make a voice-to-voice exploration of a fit mandatory before accepting any work.

Then I've got another step, which is to ensure I'm not dealing with a dishonest client. Then I can go from there. I still get taken occasionally, but that only improves my client vetting skills. Working in an environment of mutual trust is so much better.

[g_urgeghe]

Thanks everyone for the tips!

I really appreciate it. I ask the client to create both the moodboard and fill the brand questionnaire, I check it and make small changes and a few small questions if I still have some doubts. For small packaging jobs (I try to avoid) below 1000 $ I always ask to found just one milestone in advance, hardly ever had any problems. For branding projects in recent months I try to rise the rates in the range of 2200/3000 $ and I am afraid that asking for 85% may scare the customer a little, but as Christine said I could break in 3/4 milestones. I provide jpg drafts, without the working files they are useless it has never happened that the customer has disappeared and ask to a cheap designer to complete the job ... rebuilding all the brand system would be complex I think. I am grateful to all of you for the suggestions, I am always happy to discuss with colleagues.

[gina-herrera]

Yeah, I used to be more worried about people taking my work elsewhere at the beginning when I worked with cheaper clients, now that most of my projects end up being over 1k and I’ve learned to detect red flag clients, not so much. But my biggest concern is that on the extremely rare occasion that people don’t like the work, they have always attempted to not pay, or to haggle a huge discount, and I don’t allow that because I told them up front how it works. So that’s why my method is more “defensive” I suppose, I’ve never once not gotten paid and that’s my top priority. My long term / higher end clients I’m much more lenient with but every new client is a risk.

Hope it turns out well for you!

[g_urgeghe]

Gina, We are in the same boat 🙂 I understand perfectly what you are saying. I come from a traditional creative agency career, the budgets were MUCH higher and there were no limits to revisions, this is not applicable to upwork projects, I also think like you the real problem is when the client doesn't like the job but especially when the customer has no work experience, sometimes I have got very rude customers with senseless requests.