I find it fascinating that while in the middle of writing this weeks article I received an email from an interested investor that illustrates the point to a ‘T’. I was literally done with the article and I wanted to re-write the whole thing because I love stories, and stories illustrate points so much better than simply giving advice. In this scenario, the word “NO” is the most powerful word a real estate professional can include in their business, and developing a knack for when to use it can be the most powerful business accelerator you have ever implemented.
First, let me tell the story of the email I received this AM.
Using “NO” To Get More “Yes’s” in Your Real Estate Business
I receive emails every single week from investors who have somehow worked their way into a jam and they want to see if we can help them. It almost always involves having purchased property sight unseen that came to them from a great referral, speaker or marketing piece disguised as a legitimate journalistic piece. The story is always the same and there is nothing we can do to help. The properties are invariably located in areas that we do not operate or they are so over-promised and under-delivered to the client that they are neck deep in debt with no chance to rent or sell. These are the easy “NO’s”.
It is not hard to pass up a no-win situation and deliver bad news when clearly you were not the cause of the misfortune. We all would like to help, but most of us have limited resources and time and we all have to place those where we get the highest and best return.
This was not the case with the email I received today. It was from someone who had spoken with my company in the past. Several times. We were very familiar with this investor and he was asking for our help. He had chosen to purchase properties from another company with a less than stellar reputation but at a real cheap price point, even though we had given him very direct advice on the risks when he asked for it 18 months ago. In today’s emails he explained how he had actually purchased not one, but multiple properties here in Memphis and was having some difficulties now with poor renovations and bad property management.
Here is where it becomes very difficult. He wanted to speak with us about managing his portfolio for him, now that the exact trouble that we had advised him on previously was occurring. No sour grapes – it did not matter that we had advised him that the management was poor. It mattered that our company is not set up as a traditional management company. Our management company is set up for the exclusive use of our clients and there is a great deal of value attached to that service. If we were to take on this investor’s portfolio of properties – especially since he is experiencing a lot of turnover and vacancy – it would potentially devalue the service we offer to those clients who trusted us to provide them with properties.
Was it difficult to say “NO”? Absolutely not! We explained in a professional manner that while the advice is free, our management services are not. They are reserved for clients, so that they receive the utmost attention and detail. Management is a blue ribbon business for us and it is the area we have decided to set ourselves apart from competition. It is so important, that we simply cannot afford to waste time and resources on properties that are not owned by our clients.
Before you decide that I passed up on the opportunity to make money, or to help someone out, or even simply to build good-will, read further and understand what it means to be really in-tune with your business.
Understanding Your “Perfect Client”
We often tell interested investors that by understanding what our perfect client looks like, we are able to honestly point investors in the right direction – even when that direction is away from our company. It gives us the ability to say “NO”.
Feeling that you can say “NO” when everyone around you would answer, “YES”, is a very satisfying and freeing experience. As a real estate professional, it means that you not only understand what makes you valuable to your clients, but it allows you to treat your most precious resources – team members, time, cash reserves, etc. – as the valuable assets that they are. When you have identified your perfect client, every new program, every incentive, every marketing piece and every use of technology goes toward attracting and keeping that perfect client. There is no more wasting time or energy searching for new clients and trying to invent new ways to keep everyone happy. The days of hopscotching around your business and providing this for one client and that for another client are over.
You are able to focus all of your attention on providing your best service to your best clients. Knowing from the beginning that your services do not match up well with an investors’ needs – AND BEING WILLING TO ADMIT IT – gives you the freedom to say “NO”. The world is full of perfect clients…you simply have to know what they look like when you see them.
The End Of The Scarcity Mentality
The fact remains that real estate is an extremely popular cocktail party topic and everyone wants to get involved. Whether they can remains a different story, but the desire is there. For some reason, many people have a romantic notion of being a real estate baron and today’s business environment has many wanting to go from dreamer to doer. There are more opportunities today, both in terms of properties and buyers, than ever before. If you are able to operate from an abundance mentality and lose the scarcity mentality, then telling an investor that you are not the right fit or that your service is not the best for them, becomes an easy decision to make. Saying “NO” becomes more about being GREAT for you perfect clients and less about making money or losing opportunity.
The biggest benefit of being willing to say “NO” when you need to, is that your clients will thank you for it. With the higher quality of service they receive from you because of your focus on them, they are willing to not only continue to work with you, but also refer others to your company. The two easiest sales to make are to existing clients and to referrals from existing clients. When they know you are willing to say “NO” to someone else for their benefit, they will give you plenty of reasons to say “YES”!