Market Research & Client Payments
Written by Murli Mohan Rao
In this article, I am possibly reflecting the views of many MR organizations. We all agree that in the era of fluid business conditions, delayed payments are becoming a reality. For the fear of losing clientele, many agencies silently suffer, thereby affecting their own financial health and ability to pay suppliers down the line. However, what bothers me more is the unfair tactics that clients often employ to delay payments.
- Changing payment terms after they have been agreed upon.
- Linking payments to end client payments even where they have not been agreed
- Using flimsy reasons to delay payments like signing authority not available, some vague bank issues etc.
- Subtly threatening to halt / limit business when we start chasing for payments after deadline
- Splitting work between multiple agencies and intentionally rejecting part of the work from each agency to receive the complete sample at a significantly lower cost.
Once, I had a client who rejected otherwise perfect interviews for the reason that the interviewer forgot to say thank you at the end of an interview. There was another client who wanted to dock the payment for not sending a status update on a national holiday. The brazen clients simply refuse to answer any email or phone call on payments.
While resorting to legal means is always an option, it comes at a high cost. Agencies are wary of using this option as it leads to negative press. But, it is high time that the industry comes together and puts an end to this menace. ESOMAR needs to play a bigger role rather than giving the standard excuse that payment issues have to be negotiated between individual partners and that we do not have a role. After all, if they do not act on an issue that could threaten the existence of many companies, then on which issue can we expect action from them.
It is high time that there is a mechanism to rate Market Research buyers and their credit worthiness as that will help MR agencies in deciding whether they want to work with a particular agency or not. ESOMAR needs to take the lead in this respect in my opinion.
Agencies therefore need to be rigid about the below, as otherwise, many may simply go out of business.
- Having a signed and stamped work order on company letterhead before starting any work on a project
- Specifying payment terms and conditions along with penalties that would be imposed in the event of a delay
- Agreeing on QC terms and the need to mutually agree (on provision of evidence) on cancellations