The success I've enjoyed in my career has been based on solving clients problems. I was never a "sell ice to Eskimos guy." A more honorable approach would be to provide our artic circle friends the opportunity to acquire efficient heating systems and show them how to operate them for greatest comfort and economy.
Years ago I got a call from my boss, the President of a 65-year old company that operated branches from Anchorage to Denver to San Francisco. He congratulated me on earning the all time highest commission the company had ever paid. I told him that I had a great crew and that we actively listened to our customers so we could be more adept at solving their problems. I told my boss that few want a saleman to contact them, but nobody minds when their problem solver calls.
I was reminded last week of just how important it is to have a customer centric approach. In setting the appointment, the client said he closed a transaction very late in December, and now wanted to make a 1031 Exchange into a new property. From the information he provided I gathered he was around 80 years old, vibrant, but in sub optimal health. To match that profile I researched several relatively conservative MBO (Managed By Others) investments. One offers a monthly distribution based at 7% Annualy. When the property is sold in about 5 years investors will be paid a sum that brings their returns up to 11% anually. If he or his heirs needed to get their equity out sooner, they could get it in 60 days, but they would only get 7%. I also looked at some other options.
At our meeting I asked questions to determine if the investment profile I had presumed was accurate. In little time at all it became clear he had a different path in mind. We are now looking at multifamily investments that will require refurbishing, re renting and repositioning. This approach will require more energy, exposure to greater risk, and be less liquid than my initially proposed armchair investment. But it will also could yield higher profits, and more importantly, its what the client wants.
Without asking the right questions we would have solved the wrong problems! A client centric problem solving strategy is always best.
Rick M. Bean
Rose City Commercial Real Estate
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