Those “Make-Good” Credits I Keep Giving Clients Are Quietly Wiping Out My Margin

A client emails on Friday afternoon: “The report came a day late. Can you do something for us?”

You want to keep the relationship healthy, so you say yes. Maybe you knock $150 off this month’s invoice. Maybe you add a free strategy call. Maybe you credit a week of service because an onboarding step took longer than expected.

Each decision feels reasonable by itself.

The problem starts when those decisions live only in email threads, Slack messages, or your memory. Your bookkeeping still shows the client pays $2,000 a month. Your CRM shows a healthy account. But the actual amount you collect is $1,850 this month, $1,700 next month, and $1,900 after that.

You think you have a $24,000 annual client. In reality, you may have a $21,500 client who takes the same amount of work—or more.

The credits do not feel expensive when they happen

Most owner-operators do not call these “SLA credits.” They call them making things right.

That instinct is good. You should fix mistakes. A client should not have to fight you for a fair response when your team misses a promised deadline or delivers something below standard.

But a make-good is still a business decision with a cost.

Say you run a small marketing services business. You charge Client A $1,500 per month. Your direct labor and software costs average $700, leaving $800 before your own overhead and pay.

Over six months, you give them:

• A $100 credit after a late campaign launch
• A free $250 consulting call after a reporting mistake
• A $150 credit after an email automation breaks
• A $200 discount when a contractor misses a deadline

That is $700 in value given back. Your revenue from that client is down nearly 8%, but your delivery cost probably did not fall by 8%. Your margin absorbs almost all of it.

If you repeat that pattern across ten clients, the “small exceptions” can become the difference between a profitable quarter and a stressful one.

Track the promise, the reason, and the actual cost

You do not need a finance department or complicated software to get control of this.

Create one simple table in your CRM, spreadsheet, or project tool. Every time you give money, service time, or extra work to make up for an issue, log it.

Use these columns:

The estimated value matters even when you do not issue a literal credit. A “free” 90-minute call is not free if it takes time you normally sell for $300.

Once a month, add the total. Look at it by client and by reason.

You may discover that one client receives repeated credits because they expect a level of turnaround you never clearly priced. Or you may find that every credit traces back to the same onboarding bottleneck. Those are two very different problems, and both are easier to solve once you can see them.

Do not turn every issue into a negotiation

A lack of rules makes clients test the boundary. If every complaint leads to a discount, clients learn that asking is part of the buying process.

That does not mean you need to become defensive. It means you need a consistent response.

For example:

• If you miss a written delivery deadline by more than two business days, offer a defined credit.
• If the client changes scope after work begins, revise the timeline instead of automatically discounting.
• If an issue is outside your control, explain the fix and impact without offering money by default.
• If the same client has received two make-goods in a quarter, review the account before offering a third.

This protects the relationship because the client sees that you take accountability seriously. It also protects you from making emotional decisions in the middle of a tense email exchange.

A simple line can help: “You are right that we missed the agreed deadline. I’m applying the standard $100 service credit, and I’ve changed our review step so this does not repeat.”

That sounds more confident than, “I’m so sorry—what if I just take 20% off?”

Watch for clients that are no longer profitable

A make-good log gives you a clearer picture of retention.

A client who renews is not automatically a good client. If you retain them by constantly discounting, adding unpaid work, and rushing your team, their revenue may look stable while their margin disappears.

Review clients with repeated credits alongside:

• Monthly revenue actually collected
• Hours spent delivering work
• Extra work outside scope
• Renewal likelihood
• Payment behavior

You may decide to reset expectations, raise the price, change the scope, or end the relationship. Those are uncomfortable conversations, but they are better than quietly subsidizing an account for another year.

Key takeaway: Make-good credits are real reductions in revenue and often hit profit harder than they appear.

Next step: Spend 30 minutes listing every credit, refund, free call, and extra deliverable you gave clients in the last 90 days. Add the total beside each client’s revenue.