During our conversation, this gentleman spun me a wild, but unbelievably true, yarn as to how he landed in his new office space, which he's occupied for just three short weeks. As the story goes, he was initially interested in a 25% larger suite in a beautiful commercial building just up the road. This particular space was ideal for this business owner, who is in the professional services sector. The exterior of the building is elegantly appointed, with lush, well-attended landscaping, plentiful parking, and easy access from the main road. The unit's interior is spacious, with ample natural lighting, large 40-foot windows on either side that afford gorgeous mountain views, and sufficient space for multiple associates to have their own individual private offices. And the rate per square foot was well below market value for this area. A real find, right?
Not quite. The previous tenant, with the property owner's permission, had used the suite as an industrial space to repair cars and motorcycles. As a result, the suite is overwhelmed with exhaust fumes and the pervasive odor of motor oil; the carpet is destroyed and must be replaced; and the lighting is not optimal. Other issues, too many to list here, exist as well. In his negotiations with the landlord, my contact offered to make the necessary improvements to the space prior to moving in, at his own expense. The conditions? The landlord had to agree to reimburse him, interest free, on a monthly basis over the term of the five-year lease, and knock down the monthly rent a little bit. Without hesitation, the property owner refused to negotiate further and curtly turned down the offer, even though there was virtually no risk on his end. Rather than make a counteroffer, he killed the deal outright and forced my contact to go elsewhere. Most importantly, the space in question still remains vacant, leaving the landlord without a long-term tenant, AND without all the cash flow that comes along with that arrangement. And as detective Peter Falk in "Colombo" used to say, "Oh, yeah...and one more thing:" the landlord is also stuck with an unrenovated, unusable suite that no one will EVER rent until the aforementioned issues are rectified...at his OWN cost.
So what are the lessons learned here when it comes to customer acquisition? Let's review:
1. Always be willing to negotiate.
Negotiations are a critical component of most business transactions, and they're an every-day fact of life in the business world. If you're not willing to negotiate, or to improve your negotiation skills, then you probably shouldn't be in business. In this case, the property owner could still have negotiated a very favorable deal with my contact...if he had just been willing to entertain alternative contract terms. Instead, he lost a valuable customer.
2. Remain flexible.
This is related to Lesson #1. There's nothing worse than working with business professionals who are rigid and unwilling to bend...even a little bit. It's a surefire indicator of other issues, and oftentimes a lack of flexibility can be a deal breaker, as it was in this case. As we all know, the customer is not always right, but we should still act like it (at least most of the time). It's part of a creating and maintaining an excellent customer-centric approach, which usually leads to improved reputation, more leads, and greater sales down the road. And, here's the kicker: customers like working with companies that are flexible and service-oriented.
3. Keep your reputation in mind.
Speaking of reputation, it won't be long before word about this property owner's business practices gets around. The unwillingness to negotiate and be flexible could very well impact his ability to secure new tenants, now and in the future. That's no good, especially if you're in the property management business, and when your livelihood is directly tied to collecting lease payments each month. And just to be clear, there's nothing wrong with having a reputation for being a tough negotiator, as long as one is fair. Obviously, this is certainly more preferable than being known for not negotiating at all.
4. Remember the time value of money.
The time value of money dictates that, all things being equal, it is better to have money now rather than later. Why? You can do much more with the money if you have it now because over time you can earn more interest on your money. And that is what this property owner should have considered. It's far better to have a loyal, contractually-obligated paying tenant now than to wait 6, 12, or 18 months to secure another another one for the same space. Simply put, the landlord blew it.
Acquiring new customers or clients is difficult enough without throwing these monkey wrenches into the works. Customer acquisition is both an art and subtle science, but if you recognize this delicate balance, you can take the steps necessary to appropriately manage leads and then convert those into loyal customers.
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