My business is 99% referral. I got a phone call yesterday from a terrific client, that I have sold three houses to and who has referred at least one client to me in the past couple years. They asked me to do a broker's opinion on their house as the county recently purchased a portion of their land and now their lender is coming back asking what that purchase has done to the value of their property.
To do a broker opinion, will take me anywhere from 1/2 hour to an hour of my time. At what point do you start your consulting business--charinging clients--with past clients that have been loyal and who are used to you giving away your time and knowledge? Or do you offer past, loyal clients, so many hours of your time and experience at no cost, over the course of a year or two before you start charging them? Or do you never charge them? Or do you set up an account and for every referral they give you, do you give them so many hours of free consulting? Now I'm rambling . Your thoughts would be most appreciated.
Hi Susan:
This is a subject that many agents bring up. I will give you my two cents and hopefully others will chime in.
In fact, I'm working on an article this morning for The Consulting Times entitled "Living a Double Business Life" which addresses the many discount companies that attract agents by letting them keep their "discount business" seperate from their regular full commission business. There's a company called "Rebate Reps" and their founder and owner, Daniel Rubén Odio-Páez, was quoted as saying "RebateReps connects buyers to local agents who are willing to rebate part of their commission but don't necessarily want to advertise that fact. We allow agents to have their full-service brokerage and to service our (discount commission) leads."
I'm wondering how long these agents can keep their double life going. What happens when their "full paying" clients find out about the rebates they are handing out to others? Sounds like they're a bit ashamed of giving out rebates but feel they need to in order to get new business.
The difference with Consultling is that the consultant has nothing to be ashamed of and therefore, I believe, should be very transparent with all clients about the choices they offer. The operative word here is CHOICE. The consumer chooses.
In your situation Susan, I would very excitedly tell ALL your existing clients about the new choices you offer. You can tell this particular client that because you have done so much business with them in the past, that you are happy to continue to do a BPO on a complimentary basis, but I think it is important to let people know about consulting because even though you may continue not to charge them, it just brings home that you are running a business, not a charity.
Mollie
Hi Susan, Great question.
Here's an analogy: Pam and I go to the same local restaurant 90% of the time when we go out. We are regulars. Great service, good consistent food quality and friendly owners and employees. We give them a lot of our business.
Those are all good reasons to go back often. But here's the kicker: They pour us "a regulars" size drink and there is always one on the house. In addition, we often get free desserts, custom meal prep when we ask and off menu, not available to the public specials.
Do we pay? Always. Would we still go back if they stopped the freebies? Probably, but not nearly as often. There are other alternatives just as good where we are treated like everyone else.
So, in my mind, "regulars" get special treatment. There are no rules, no "standard practice." I make it up for every client based on the relationship, my mindful business logic and my heart.
What I would probably do is on the very next transaction (buy/sell) explain my new way of doing business and why it is a win-win.
Mollie,
Again, I think you hit the nail on the head! It's human nature to think "less out of my pocket" is a good thing. But the reality is, though people may be ATTRACTED to lower priced options, once the can see the whole "menu" and what their options are in terms of what they really get for whatever it is they pay, they often decide not to go that route. I think the tendency is to automatically think that "cheaper" equates to better "value", and we all know too many examples of how that's often not the case.
In this business, especially, with so much misinformation saturating the public perception, consumers are led to believe that what they are paying for can be reduced into so many "nuts and bolts", and that all the producers of those nuts and bolts are pretty much the same. As an industry, we've pretty much done that to ourselves...and our recent history, with the explosion of the internet and online "alternatives" coupled with a marketplace seeing unprecedented appreciation, the "untrained eye" could certainly view the role of the agent as fairly readily replaceable.
The beauty of what Merv calls "transaparency" is that, once INFORMED (and I say it all the time....Informed is Empowered, they often come to the conclusion that being "penny wise" may actually not be in their own best interest. It often leaves them "pound foolish". There's a reason why such phrases are "cliche". It's because they're so often TRUE!
The trick is for consumers to UNDERSTAND what it is they are paying for...and more importantly, WHAT THEY ARE NOT! Only then can they determine whether or not they are getting good bang for their buck.
Judi