In my previous post, I mentioned that I recently attended an all-day mastermind with real estate investors from Florida and Ohio. I shocked the room and one person in particular by asking, “How many clients have you fired in the last year?” We then moved into a discussion about the 80-20 rule (80% of your revenue often comes from 20% of your clients/customers, and 80% of your headaches often come from 20% of your clients/customers). It’s important to identify the people who are causing problems, are not congruent with the way you do business, and expect to receive more than what they are willing to pay for, and then find a polite but effective way to cease doing business with them.
As you develop your real estate investing playbook, one of the key things to remember is that there are times certain people should not be in your circle of clients/customers or even on your team. Your business will run much more effectively, and it will be easier for you to execute the plays in your playbook.
In my office, we recently had to let a few clients go for various reasons. In reviewing one of the files, I determined that I had invested a tremendous amount of my time into one individual’s case over the years. When it was all said and done, I was working for probably $50 an hour at best. What made this case particularly difficult was that it was a contingent fee injury case. The way benefits were paid, it was very advantageous to the client and disadvantageous to me. That is often a risk in this part of my practice. When looking at the total picture, it became apparent that this client was no longer a good fit for my practice.
As you come to the end of business year 2017, I suggest you look at your client/customer list and determine if there are some people on there who both you and they would be much better off if you no longer did business with them. If that’s the case, it is incumbent upon you to take that step as a grown-up business owner and sever those ties. Obviously, it must be done in a way that is polite and professional and does not damage or prejudice the client/customer or your business. I’m not recommending you make hasty decisions, but rather careful, well-thought-out decisions on which you then take action.