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Seeds For Thought
Serving Your Customers Right
Virtually every small business is customer driven. And most often it is you, the entrepreneur, on the front lines dealing directly with the customer. Victor Kiam, CEO, Remington Products, believes, "You should think of your customers as partners, or better still, family."It is the customer and only the customer who will give you the money to pay your bills and make you rich. Without the customer, you have nothing. The strength of your small business will be parallel to your customer relations. The stronger your customer relations, the stronger will be your small business. Who has the better shot at success? "Listen, I have the best ice cream in Smallville. Any idiot who would take the time to find out would know that. I can't help it if people are stupid and go to other places. Let them go and eat an inferior product." Or, "I think that we do offer a superior ice cream. I know that other shops in Smallville have good ice cream but I think that you'll be happy with yourself for discovering mine. Here, try a free taste." If a customer has a choice, which business is he or she more apt to patronize on a regular basis? Always think in terms of what would be best for your customers and what alternatives your customers have to dealing with you and your business will constantly evolve for the better. You're the customer. Take your pick. Of course, as an Action Principles Champion, you already know this! Doran's Window WashingAfter the job, Joe's two men take about ten minutes to walk down the street and to put doorknob hangers on each house to advertise their services. The advertising explains that complete customer satisfaction is their number one priority and that their work is fully guaranteed and insured. Joe takes this time to review the window-cleaning job with the homeowner. He makes sure that the homeowner is satisfied. He also asks the homeowner if he can schedule the home for another window cleaning in three months. Further, he asks if the homeowner can refer him to any other potential residential customers. Then he asks homeowners if they know who cleans the office or store windows where they or their spouses work. Joe is starting to develop a large commercial as well as residential window cleaning clientele. With a straightforward "customer first" attitude, a clean professional look, a few ladders, some newspapers and spray bottles of ammonia and water, Joe is on his way to building a prosperous business. Sinclair's Window CleaningAs he and the boys stumble out of the van, Sin is heard to threaten, "Let's get this job done fast. I want to be paid and out of here in an hour. And, I don't want you guys doing any weed while you're on the ladders." However, the music is so loud, and with both of Sin's assistants singing, it is doubtful either heard, or cared to hear the remarks of Sin. Sin and the boys are dressed in their company uniform of ragged cutoffs and no shirts. As Sin and the boys finish a window, they drop the sheet of newspaper they have used. Their intention is to pick up the used newspapers at the end of the job but, of course, half the newspapers blow around the neighborhood. If any further notice was needed to the auditory assault, the used newspapers advertise the young mens' presence in the neighborhood. After the allotted one hour, Sin is ready to leave. One of the crew points out that they haven't washed the second floor windows on the rear of the house. Sin waves off that comment saying that those windows look fine. Sin is not happy with the homeowner who is trying to pay with a check rather than cash. At that moment, the police pull up, having been called by a neighbor who was morally opposed to the lyrics of the music being blasted from Sin's van. Sin disgustedly grabs the check. He "Yeah, yeahs" the cop and swears to his boys for all to hear that he'll never accept another job in that "####" neighborhood again. What do you have to do in this world to make a day's pay? Oh, well, a day's work done. What difference does it make? Sin and the boys don't intend to be washing windows for much longer anyway. When you're starting your business, you can't afford to offend a single person. Remember, every person knows 250 other people. You'll want every customer experience with your business to be a pleasant encounter. You'll want to make every satisfied customer an ambassador for your business. Yes, it won't always be easy. Yes, sometimes, you'll have to bend over backwards and bite your tongue. In the long run, your customer driven attitude will propel you to success. Time ManagementStop. Successful entrepreneurship is a thinking person's art. You need time to stop and think. You need hours each day devoted just to yourself. You need a day or more each week. You need a week or more each year. You need time to stop and think. Hard work alone will not necessarily make you rich. More and more hard work alone will not make you rich. You need smart hard work. Unfortunately, many people work very hard long hours for slim reward. You need a small but important bit of time everyday to exercise. And, you will need another small bit of time everyday to be alone. Then, you will have the energy to greet your customers with enthusiasm day after day. Then, you will have the energy to deal with the problems and challenges you will face everyday. Then, you will have energized the fertile field of your mind from where you will reap the ideas that will propel you to success. You have to take time constantly to organize your activities and to set your priorities. You must have time to step back from your business and to analyze your business from all sides, up and down and side to side. What are you doing right? What should you do more? What are you doing wrong and needs correction? How does your business fit in context with your industry and the local economy and other local businesses? Stop and give yourself the time necessary to think and improve and succeed. The odds are that you will not get rich running one small magazine stand. But you might get rich by expanding that stand into something more. You might get rich by owning six or ten small magazine stands. You might get rich putting advertising on your stands and then franchising your famous magazine stand concept. You might get rich starting magazine stands and then selling the stands to others and then, opening up more stands and selling more stands and lending money on stands and... Following the Action Principles, you can make your small business bigger and better. You need time management to give you the opportunity to set and keep yourself pointed toward success. Andy, As BrokerWith a first year's gross income of under $40,000, Andy wasn't exactly setting the financial world on fire. However, his accomplishment could not be ignored. As a rookie, he had done significantly better than the industry average for all agents of $26,000. And, he had earned about $30,000 of the $39,100 during the second six months of the year, which boded well for his second year projections and expectations. Following the completion of the second phase of his research, Andy knew as much, if not more, about investment real estate in Newton than all but a few. Andy's research was his foundation for prosperity. Andy sat down with Mr. Taylor to review his first year's performance. Mr. Taylor seemed pleased. "Well, you seem to have done pretty well for yourself and the company during your first year, Andy." And, Andy was as confident as ever. "Thank you, Mr. Taylor. I expect to do much better this coming year." Mr. Taylor wanted to lend all the support to Andy that he could. "Well, it's good that you're enthusiastic and optimistic. Now, tell me about your plans." Andy began, "Well, from what I've seen, you and Don have developed your own strong and loyal clientele, so I'm not about to argue with success. I want to start developing clients the same way." "And how do you propose to do that, Andy?" "Well, with your permission, I'd like the company to subscribe to one of those ghost written monthly commercial/investment newsletters. I've got the information on newsletters from four different companies and there's one called, INVESTING IN REAL ESTATE, which I would particularly recommend. The cost to us would be about $180 a month. And..." Mr. Taylor interrupted, "The cost to me, you mean." Like any good salesman, Andy had his sales points ready. "Well, let me explain that I think that this would be a good investment for the company. If we take the approximately 300 investment properties in Newton and eliminate those owned by major corporations and owner-occupied two-families, that would leave about 150 investors for our mailing list." "Andy, why are you excluding two-family owners?" Mr. Taylor wanted to know. "I'd say that they are not likely investment sellers." Mr. Taylor hesitated, "Well, Andy, I'm not so sure about that. How many owners are we talking about?" "About another 60, Mr. Taylor." "So, Andy, that would make over 200 subscribers. And postage?" "Yes, Sir, that would be extra. For 200 subscribers, I guess we're talking another $60 per month." "OK, we're up to $240 per month. Any other costs?" Mr. Taylor figured that there was more coming and he wasn't disappointed. "Sir, I'd also like you to consider our investing in a computer system and letter quality printer for about $900." "For the newsletters?" 
Andy was rushing ahead, full of ideas. Mr. Taylor wanted to take a minute to reflect. "Your plans are very ambitious, Andy. You'll have to give me time to think about all this. Anything else?" Andy was ready with his close, "I'd like to put in a further plug for the newsletters. You see, every month that I send out the newsletters, I'll have an opportunity to call the subscribers and ask for their opinions and start them talking about real estate investing and who knows..." Mr. Taylor recalled a comment made by the Old Andy, "Andy, I can remember not too long ago, you were dead set against cold calling." Andy had his answer, "Yes, Sir, but this wouldn't be cold calling. I'd just be calling informally and shooting the breeze, so to speak. If the client happened to say that he wanted to buy or sell during the conversation, well..." Mr. Taylor was now surprised at Andy's seemingly ambitious plan. "You'd make 200 calls a month?" Andy put his work into perspective. "Actually, 200 calls a month would be less than 10 a day. I'd use the calls to fill in free time." Mr. Taylor nodded in satisfaction, "That sounds enterprising. Anything more?" Andy was not about to miss a sales opportunity, "Yes, Mr. Taylor, I'd like to run this idea by you. The office currently pays commissions on "for sale" property listings but not on "for lease" properties listed. As an incentive to bring more rental business into the office, I would suggest that we institute a policy of paying 20% of the value of rental to the rental listing agent. Now, as you know, we have an even 50/50 split with 50% to the rental agent and 50% to the office. My suggestion is that we have a new split of 40/40/20 with 40% going to the rental agent, 40% to the office and 20% to the rental listing agent." Mr. Taylor was quick to see that with Andy's new formula, his cash flow stood to drop, "You're cutting me, the office, down 10% from 50% to 40%." Andy pushed on, "Well, my point again, is that you're investing in the business through this rental listing incentive program. In a very short time, I know you'll see that your 40% of a bigger pie amounts to much more than 50% of a smaller pie." Mr. Taylor needed to clarify. "Andy, you keep using the word "investing" when you want me to spend money?" Andy had his close, "I learned the word from you, Sir." "OK, anything else? Your plans almost sound overly ambitious." Andy summarized his plans, "Well, just one more thing. I agree that I'm laying out big plans for the next year. I also agree that I need to focus. What I'd like to do is to concentrate on listing properties for sale and for rent and, also, sell properties. For the actual rentals, showing apartments, checking tenant applications, I'd like us to hire a rental agent who would work under your supervision together with Don and me." Mr. Taylor had to smile, "Now, you're starting to sound like the boss." Andy made his point. "Well, Mr. Taylor, I just want to be sure that all the apartments I list for rent get rented." "And, you get your 20%?" inquired Mr. Taylor. That was Andy's plan. "Yes, Sir, with your permission that's what I'd like to do." Mr. Taylor seemed genuinely pleased with Andy's progress. "Andy, get out of here before you cost me any more money. Son, in all seriousness, you've done a good job. If you keep it up, I wouldn't be surprised if you make a million before you're thirty." Andy shook hands with Mr. Taylor, "Sir, thank you for the push and please don't stop pushing." "All right, Andy, I'll push you out the door right now so you can get on with those big plans of yours." Andy thought this to be an excellent time to ask for the business. "What is your answer to my proposals, Sir?" Being a knowledgeable investor, Mr. Taylor could make a decision and give an answer. "I'll give you my answer, right now. Go ahead. You've got a $3,000 budget for the computers and newsletters. If you see yourself going over that figure, tell me in advance. I don't like surprises." "Yes, Sir. Thank you, Sir." "Now, out, out." Andy didn't waste any time ordering his computer or the newsletter service. In three weeks, he was up and running. Each month for the personalized insert that was to go out with the newsletters, Andy wanted to include something that would provoke response. The first month was, "Are You Getting The Rents You Deserve?" In response to this question, Andy included an informal rent survey he had conducted and he noted the current market rents for studio apartments, one-bedroom apartments, two bedroom apartments, etc. As he called the subscribers during the month, he asked them if their rents were in-line. Most callers were impressed that Andy knew so much about their buildings and many volunteered their own rental rates and other information which, of course, Andy added to his individual property cards. Knowing the rental income of a building helped Andy estimate a market value for the building. In ending his conversation with each investor, Andy also stressed the fact that Taylor Realty now had an active rental division ready to serve their apartment and store rental needs. The second month's insert topic was, "Do You Know How Much Your Buildings Are Worth?" Andy wrote a brief article on the various appraisal methods used for valuating income producing real estate. In talking with investors on this subject, Andy had an opportunity to gauge how realistic each owner was in estimating the value of his or her individual real estate portfolio. In general, an investor who valued property conservatively, low, might be a strong seller, while an investor who valued property aggressively, high, might be a strong buyer. In succeeding months, Andy's topics included, "Should You Diversify Your Portfolio?", "Are Your Building Expenses In Line?", "Your Property Taxes, Are You Paying Too Much?", etc. Each topic was chosen by Andy to give him more detailed information on particular buildings and also to acquaint himself with how individual investors viewed real estate investing. What were their goals and needs and how could Andy work to satisfy these objectives? Andy got many ideas from reading William Zeckendorf's autobiography, "Zeckendorf." Zeckendorf had been one of America's most successful real estate developers, brokers and investors. Andy was back to reading and the reading was paying off. One fairly common complaint that Andy heard from investors was the difficulty they had in hiring reliable contractors. Some investors had good plumbers but always seemed to have problems with electricians. Some had good carpenters but carpenters charged too much to be used as handymen. Some had good handymen but handymen's skills are usually limited. Some contractors wanted to handle only large jobs and brushed off requests for routine service calls. Other contractors preferred the small jobs and balked at undertaking larger projects. Andy would have to give this concern some further consideration. As quickly as reasonably possible, Andy wanted to build his list of loyal clients who would buy and sell properties using him as their exclusive agent. How could he do it? Andy simply had to do more, work harder and provide more services than other commercial/investment brokers in Newton. And, he had to prove to income property owners that he knew as much, if not more, about investment property in Newton than any other commercial/investment brokers. Lesson 22 ResourcesGo to Lesson Twenty Three
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