Our 5 Ways To Reduce Risks From Client Ghosting

I normally don't believe in ghosts.

But I am now starting to...

Because how else could you explain this?

You’re deep in the weeds of a project.

Your team’s working late nights, hitting every deadline.

And then, just as you’re picking up momentum... the client goes dark.

It's as if the client never existed.

No replies. No updates.

The project hangs in thin air, and so does your payment.

We worked with a software agency recently that faced this nightmare.

Not once. But over and over again.

Clients would vanish without a trace.

And that left them stuck with unpaid work and resources they couldn’t recover.

The agency was losing money, time, and control over its own business.

So I hopped on a call with the agency owner.

Noted down the main issues they had faced.

(1) The owner's main frustration was clients ghosting them.

Basically, clients who would stop responding or abruptly leave projects halfway through.

Because when that happens, the work sits there, unfinished, and so does the payment.

(2) Time was another issue. The agency was pouring in hours - no, weeks of effort into projects that went nowhere.

Clients bailed, leaving them with nothing but a pile of invoices they couldn’t collect on.

It wasn’t just annoying. It was bleeding them dry.

(3) They couldn't really plan for their future projects.

Mainly because their clients were slow at communicating and decision-making.

And that threw their whole project off the rails.

They needed clients to be accountable.

(4) Time is money. And for this agency, both were slipping through their fingers.

They needed a way to ensure their efforts were respected and compensated, regardless of client behavior.

The bottom line was simple.

They needed a system that could take care of these issues.

Not by forcing their client to go to court, because no one has time for it.

But by preparing them better.

For that, we focused on a couple of points.

5 actually.

(1) Milestone-Based Payments:

We introduced a milestone-based payment structure in their contracts.

Payments were now tied to specific project stages, with clear deadlines for each one.

This meant that the agency would be compensated for the work completed up to each milestone.

Even if the client decided to pull the plug halfway through.

So no more waiting indefinitely for payment.

Their cash flow became more predictable and secure.

(2) Termination Clauses:

To address the issue of clients going silent, we added termination clauses.

These allowed the agency to end a contract if a client became unresponsive for a specified period.

This gave the agency the power to cut its losses and reallocate resources to other, more viable projects.

Also, if a client chose to terminate the contract, they were required to pay for all work completed to date.

But that's not all.

The client was also required to pay a portion of the remaining project value as compensation for lost opportunities.

(3) Communication and Approval Timelines:

We set strict guidelines for client communication and approvals.

The contract now included clear timelines for the client to respond to inquiries, provide feedback, and approve deliverables.

If the client failed to meet these deadlines, the agency had the right to pause the project.

Or charge additional fees for the delays caused. This ensured that the project stayed on track.

And that the agency’s time was respected and valued.

(4) Non-Refundable Deposits:

To protect the agency’s initial investment in each project, we introduced a non-refundable deposit clause.

Clients were required to pay a portion of the project fee upfront, which would cover the agency’s initial costs.

This deposit was non-refundable.

Meaning that even if the project didn’t proceed as planned, the agency wouldn’t be left empty-handed.

(5) Resource Allocation and Priority:

The contract also included terms that allowed the agency to re-prioritize projects.

Or reallocate resources if a client’s delays start to impact the overall workflow.

This meant that the agency could keep their team busy and productive, even if one project hit a wall.

Any additional time spent on rescheduling or adjusting project scopes due to client delays would be billed separately.

This made sure that the agency’s efforts were always compensated.

The results of taking these actions?

-> The agency will now be compensated for every stage of the project, even if a client walks away.

-> With termination clauses in place, the agency could exit unresponsive projects. Or allocate their resources to more profitable work.

-> Clear communication timelines help to keep projects on track. And that minimizes delays and ensures deadlines are met.

-> Non-refundable deposits provide upfront security, protecting the agency’s overall cash flow from client abandonment.

-> The agency could prioritize and manage its workload better. This made sure that their team remained productive, even when clients caused delays.

One lesson I have for you guys from this.

You can't always predict client behavior, but you can protect yourself from the fallout.

If you have a good system in place, you won't have to worry about much.

So take a hard look at your current contracts.

Do they have a good system in place to protect your time?

If not, then it's time to tighten them up.

I had this website created just for that purpose.

https://mtlegal.framer.website/

Check it out on how I can solve this issue and more for you.

Talk to you soon!

-- Akhil Mishra