Guest Article
The success of every business is based upon relationships. When I started my commercial real estate company more than forty-five years ago, it took me a month to raise my first $5,000 of capital. Today I raise $1,000,000 with one email. Why? Strong relationships; which I have built by providing continuing after sales service are the key to long-term growth.
The importance of after sales service is simple, but often ignored. It takes far more time and energy to gain a new customer than to sell your product repeatedly to those you already have. It is therefore mandatory in my book to provide excellent service to my customers, especially after I’ve made the sale, so they will continue to do business with me in the future.
For example, over the past four decades, I have built a strong base of investors in the commercial real estate that I buy and manage. And while I usually earn a profit when a property is bought, and often when a property is sold, I never “churn” my portfolio. Why? Because the greatest return for my investors usually comes with a long-term hold, just as the greatest return from a relationship is usually realized only over time. Selling a property after a few years might benefit me, but not if it hurts my clients. Transaction costs, which might add to my bottom line, can gobble up their gain. When I hold and manage a property for ten or twenty years I provide greater after sales service and accumulate invaluable investor loyalty.
Similarly, I invest in managing the day-to-day operations of my various properties, even though I don’t immediately benefit from doing this. I consistently lose money on property management because I employ more people than my competitors. But this after sales service improves my client relationships and ultimately generates future sales.
That said, it’s important not to confuse after sales service with too much before sales service. I made this mistake early in my career. When I was practicing law and just beginning to buy real estate, I met a woman who claimed to be interested in investing with me. I carefully explained to her the ins and outs of investment, and over several years we discussed quite a few specific properties. In turn, she frequently asked me for unrelated legal advice, which I was happy to provide at no charge, hoping for her investment. After almost three years, I stopped giving her free legal advice because there had been no investment forthcoming.
I read an article in the Wall Street Journal that compared the American style of business to the Asian model. Americans were described as hunters, with the goal of making as much profit as possible from a single shot. The Asian model was more like farming: cultivating the fields of their business relationships, which included providing excellent after sales service.
Today, I believe that the world’s most successful companies provide excellent after sales service. Why? Because we live in a service economy, with a great deal of competition, and it’s more difficult than ever to acquire and retain new customers. More than once, I have walked out of a restaurant, never to return, because the service was either slow, rude, or both. I remember that after a service problem with another brand, my mother always bought a Kenmore washer and dryer because of their reputation for reliability and the availability of prompt service. Kenmore must have similarly impressed my wife, because we have a Kenmore washer and dryer in our home today.
It takes a great deal of time and money to obtain one new customer. I suggest that you enjoy, appreciate, and retain those you already have.
“Jubilant Businesswoman Celebrating Her Success” courtesy of stockimages /www.freedigitalphotos.net
About the Author: Alan C. Fox is President of ACF Property Management, Inc., and author of the New York Times Bestseller, “People Tools: 54 Strategies for Building Success”. Visit his website for more information.
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