Customers vs Clients: An Essential, Important Difference

Many people commonly interchange the words "customer" and "client" in their every day conversational usage. While there are, in fact, a number of similarities, there are also quite a few differences. These differences come much more often in service industries than in those where a product is sold retail, because, in retail sales, nearly everyone, with only a very few exceptions, are customers.

A customer is someone who either buys a product from you, or uses your services, without specifically contracting in any type of exclusive way. On the other hand, when one enters into a client relationship, there is far more of an obligation on both parties part.

This differentiation is most evident when it comes to the real estate process. A homeowner, who lists his house for sale with a real estate broker, enters into a client relationship. The homeowner, for a specific period of time, is contractually bound to that broker, in terms of all aspects of the sales procedure, except of course, the final decision whether to accept an offer, which always remains the homeowners option. The broker is obliged in a number of specific ways, as specified by that state's specific real estate laws and regulations. In most cases, a broker and his agents, owe the client a fiduciary responsibility, which includes confidentiality (except in the case of any material misstatement or other illegal or immoral situation), making best efforts on the client's behalf, and doing the best to secure the best possible offer and negotiating on the owner's behalf. The broker owes his entire loyalty to the owner during this entire procedure, and is forbidden to do anything which is not in his client's best interests.

When someone uses the services of a Realtor in the real estate buying process, most states require some specific type of Agency Agreement. A buyer or potential buyer can have the agent serve either in a customer or client relationship. First, a buyer can decide if he wishes to use an agent as a Seller's or Buyer's Agent. A seller's agent owes his responsibility to the seller of the house, while a buyer's agent negotiates on behalf of the buyer. Obviously, in this latter scenario, the broker owes his allegiance to the buyer, and is expected to due necessary due diligence, as well as supply the potential buyer with all pertinent information that he may attain. This includes information about length on market, how negotiable the seller might be (while a seller's agent should be trying to maximize price received by homeowner, the buyer's agent tries to obtain the best possible "deal" for the buyer.), and other important factors that might impact the buyer. A person desiring this arrangement can still be a customer, but generally will enter into a client relationship, so that the broker puts forth maximum effort on his behalf.

While in both scenarios, there should be no material misstatements ever made, obviously the degree and type of effort put forth will differ. It is important for the public to understand the distinction, and consider them fully, carefully and wisely!

Effective Negotiating Takes Skills, Knowledge, Experience & Expertise

After four decades of professional negotiations, having negotiated everything from labor contracts to hotel contracts, from the terms of employment, to the basis of the sale of one's home (or business), I truly believe that one of the most widely overlooked aspects in negotiating is the necessity for a negotiator to be fair, honest and honorable, and to fully understand not only his own needs but the needs of the opponent. It is important to understand that at the very least, there are always at least two sides to any negotiation, and while one side may at certain points have the "upper hand" over the other, one must always beware that the "tables may turn," and negotiators generally have long memories.

Some individuals who believe they know how to negotiate try to win every aspect of a negotiation, and fail to realize that the only negotiations with long term positive results are those that are "win- win" in nature. While one side may feel they have won a victory, and taken advantage of the other, unless both sides walk away from a negotiation feeling they, at the very least, did alright, somewhere down the line, the negotiating strategy will backfire. A professional negotiator goes into a negotiation fully prepared, having comprehensively and completely done his homework about the other side. An effective negotiator knows that there is generally a delicate balance and a fine line between getting a good deal, and pushing too hard, so that the other side, even if you get the concession, resents you for asking. In the long run, negotiators with reputations for being tough but fair are respected and get the best for their clients, while those who "play games" often lose out over time.
For example, in negotiating with a hotel, a negotiator must understand various aspects from the vendor's standpoint, such as labor costs, union requirements, service charges and fees, taxes, mark-ups, margins, etc. An effective negotiator understands that the most profitable aspect of a hotel is the "bar," followed by the banquet Food and Beverage department. Labor considerations may often afford a hotel very little margin for granting concessions. If there are fees for certain services, a negotiator must understand if these items are being handled internally by the hotel, or if they are sub- contracted out to vendors and/ or suppliers. If, for example, a negotiator wants a concession regarding the parking fee, it is essential to understand if the hotel controls that internally, or are they paying someone else, or is it some sort of cost/ revenue share situation. Similarly, a negotiator must understand if Food and Beverage, and Bar, is handle by one department, or multiple departments, and thus how this may be impacted.

One of the considerations for a real estate professional, is pricing philosophy. The homeowner must beware that while he, of course, wants to achieve the best possible price for his home, pricing that home right, from start, often goes a long way! Don't overprice or under - price, and explain fully to your homeowner - client, how overpricing may potentially hurt them, in the long run! When there is a negotiation, many buyers are tempted to offer an unrealistically low starting price, but fail to realize doing so, might sour the homeowner, and thus, hurt in the long run!
 
As a professional negotiator, I am never pleased when I am instructed to co-negotiate for my client with someone else, without negotiating expertise. Invariably, it negatively impacts the negotiations, adversely. Negotiating should be left to the professionals!

The Facts May Not Be The Whole Truth!

Many people falsely assume that when one gathers the facts, he always finds the truth. While many times that may turn out to be the case, there are many other times when facts don't lead someone automatically to the truth. Pete Townsend wrote, "The facts don't always reveal the truth, but the truth always reveals the facts." Although, at first, this may seem somewhat inconsistent, in far too many instances it is the case. Beware of polls, and how others interpret data. Just as one might observe vastly different interpretations of the same facts, depending on what specific media read or watched, etc, how facts are gathered, considered, and one's objectivity, often skew the supposed, facts!

1. Not all situations are automatically "black and white" matters. In many real life instances, there are often cases where there is far more "gray." Statistics, for example, are often manipulated to offer a certain desired set of facts, but those facts are often not the entire story. How a survey item for a poll, for example, often determines the results that might be gathered. For example, in today's world, most of us have been, at least somewhat, adversely impacted. Therefore, if the question asked, "Are you satisfied with the economy?," nearly everyone would answer no, and the number would show a large dissatisfied situation. However, if questions such as, "Do you agree with the President's approach towards the economy?," the numbers might show different results. But, if the question was, "Do you agree with the President's approach, the opposition party's approach, or neither?," we most probably would get an entirely different set of responses. It then, of course, depends on who is being asked, and how the data is being collected. Another example might be that it might be a fact that membership, for example, diminished during someone's tenure in office, but does that make the truth that it had to do with that person's leadership? Or was the situation inherited? As you can see, there are a number of variables involved. In the real estate business, for example, there is often quite a considerable difference between the listing and selling price. This is based on perception, the market, competition, and reality! See - one must be wary of the facts!

2. On the other hand, when something is the truth, all the facts must align with that truth. Truth is based on legitimate facts, and the legitimate and honorable handling of those facts, as well as the ability to accurately interpret things. So many leaders fail to achieve their objectives because they simply see a set of facts, and those facts end up forming what they perceive as truth. Truth is composed of various and numerous facts, and without the training to interpret them, or the commitment to research the details, or the integrity to utilize those facts in a non- biased, non- prejudicial manner, many individuals in leadership mishandle facts to "prove" their version" of the truth. Honest and real truth cannot and does not have versions - it is simply the truth!

How many times have we heard people use a certain set of facts to justify or prove their point of view?  Just because a particular set of facts might be interpreted in a certain manner, that does not make that the truth.

Effective Communication Is Key to Real Customer Service

Businesses and organizations spend incredible amounts of time, energy and dollars to attract potential customers and supporters, yet often neglect training their front line people sufficiently to have the skills and the abilities to deal effectively with people in often very trying circumstances. In business, we refer to these individuals generally as Customer Service Representatives, while in organizations they are generally paid staff and volunteer leadership. In over thirty years of training people in professional interpersonal business relations, I have come to realize that the best way to effectively deal with upset people is to listen to them, and let them know that someone is listening and someone cares.

Then, if the representative knows the answer, he should calmly and thoroughly explain it so that the other person understands as well. If, on the other hand, the representative is uncertain of the information, the best thing to do is to calmly state that he is uncertain, but will get the information, and get back to the person within a specified period of time. It is then urgent that the customer representative indeed get back to the concerned party, and provide them with the information. It is always better to be open and honest, even if the answer is not what the other person may want to hear, than to fabricate an answer or avoid an answer. In addition, cliches and empty rhetoric must be avoided at all costs!

The basics of customer service apply to individuals who are self employed, or in service - oriented industries or businesses, such as Real Estate professionals. A real estate agent must learn empathy, and fully understand, and appreciate, the stress, tension, and concern, homeowners are often going through. Many have important memories, while others are heavily dependent on the financial ramifications of selling their house. Patience, understanding, responding quickly, and answering fully and honestly, are essential and key skills! One must adopt the mindset that There is no such thing as a stupid question, because, while it may seem obvious to you, it obviously remains, as a concern to the individual asking the question. When answering these type of questions, it might be helpful to conclude saying something like, I hope I've addressed that to your satisfaction, and then waiting for an acknowledgment and positive response.
 
Below I am going to provide a couple of examples that indicate what all too often is done, as well as try to explain what should have been done instead.

1. Several years ago, I was on a Yugoslavian Air (JAT) flight that was scheduled to fly from Athens to New York, with a short stopover in Zagreb. When the plane landed in Zagreb, we were told to deplane while the plane was to be serviced, and we would be informed when to re-board. About an hour later, we were informed that the plane needed a part, and that they were waiting for it to arrive shortly. In this extremely hot crowded terminal, no additional information was provided for hours. We continued to be told, "Soon." Finally, after about three hours (remember our original stopover was supposed to be less than an hour), I went up to a Customer Service counter, and the representative starting giving me the same rhetoric. I interrupted and said we both know that's not true, and finally said, "No more rhetoric and party lines. What's the story?"

Only then did the representative admit that the part and the mechanic both had to be flown in and their flight was not scheduled for hours, and that she did not know how long the repair would take. At that point, I suggested that passengers deserved some sort of consideration, if only a meal voucher, and that they deserved to know the truth. Miraculously, within about fifteen minutes, they came around and distributed meal vouchers (although you don't really want to eat the food at Zagreb airport), and made an announcement explaining the facts, and that they would make hourly announcements. A great start, but then when an hour passed without any further announcement, I reminded the nice customer service people that they needed to make the announcement. The lesson to be learned is that proper and competent customer service would have been to communicate openly and fully from the start, not make any promises that they could not keep, and always keep the promises made.

2. A few years ago, a power outage in my area (now up to 126 1/2 hours) was not only annoying, but was handled so poorly, it was, a customer service fiasco. There was very limited communication of any sort, and most of what was communicated was either contradictory or inaccurate. After all that time, we were still not given a straight answer by the Long Island Power Authority, as to what to expect and when! Is that effective customer service?

Most people get somewhat upset when something goes wrong, but almost all handle it far better when they are provided accurate and caring customer service, than when the service is spotty at best. This is an essential lesson for all businesses, and all organizations to learn from! Never over - promise, but seek to resolve any concerns patiently, professionally, and in a compassionate, caring way! ISN'T THAT THE HEART OF REAL, CUSTOMER SERVICE?

The Difference Between Ego & Excellence

One of the least understood behaviors is what most of us refer to as being egotistical. While some individuals voice much bravado and appear to be applauding themselves and patting themselves on the back continuously, someone with a truly healthy self image does not find that type of self praise necessary. The reality is that if someone speaks about achievements in order to demonstrate experience and expertise, and they were real achievements, that is not bragging, but if someone exhibits false bravado and overstates his achievements, then it is simply self promoting. Walt Whitman stated, "If you have done it, it ain't bragging."

1. There is often a huge difference between mere experience and true expertise. Just because someone has had some experience, it does not mean he has learned sufficiently from it, for it to provide some advantage or expertise. I'm sure we have all met people who appear to be egotistical, whose behavior ends up being more based on insecurity and the need for attention, applause, gratitude, etc., than it is related to any type of superior knowledge or expertise. For example, in politics, when a politician points to his record, it can either be a case of bragging, or true excellence. Was he actually the cause of the positive results? Were there actually any positive results at all? Especially as it relates to politics and politicians, there is often a distinct line that gets blurred between true achievement and excellence, versus falsely taking credit or distorting one's achievements. This is caused partly by convincing one's self that they were actually excellent and actually believing it, a desire to win and election, political spin, ego or false ego, or being delusional.

2. I have been involved in the event industry for well over thirty years. During that time, I have come across quite a number of people who thought of themselves as being event planners or event experts, while the reality was that they, at most, chaired a program, event or a committee, and perhaps got involved in certain aspects of the event planning process. Therefore, when it comes to event planners, while I can state that I will guarantee cost savings and superior event planning and superb results, that statement is not bragging but rather the facts based on my years of experience, my gained expertise and knowledge, and the results I have consistently achieved. On the other hand, it is bragging when someone who perhaps was involved in previous events but does not possess the prerequisites to be considered expert, claims to be an event expert.

3. Regardless of the industry or endeavor - pay more attention to quality, preparation, planning, and expertise, than what someone claims about themselves! For example, homeowners should interview their prospective Real Estate professional prior to hiring him - and this should be an opportunity to see how well someone answers your questions, needs, concerns and priorities; understand them; and how he will serve you! How do you know how well he negotiates, unless you ask him, for example, to defend his commission? You owe it to yourself to know where ego ends, and excellence/ quality begins!

Bragging is only offensive when it is untrue. Otherwise, it may be merely a recitation of the facts. In either case, however, it should be done with tact and without being offensive.

Achieve, By Working Effectively, With Others!

No matter how talented, intelligent, motivated, or courageous one may be, successful individuals always realize that no one can achieve to his maximum potential unless he is both able and willing to cooperate fully with, and work with others, in a manner where joy is shared. We often hear about it either taking a village, or teamwork not having any "I" in it, but moving forward in a manner that motivates and inspires people, few achievements will ever come to fruition. In the words of Anon, "We are like angels with just one wing. We can only fly by embracing others." Great successes come from true empathy and caring for others, where one dedicates his activities to providing meaning and value to others in every action we pursue.

1. One of the major reasons that leadership experts emphasize the need to delegate is because doing so involves others, and lets them know that the leader both cares and is concerned. Perhaps the greatest leadership strategy, although it is rarely utilized, is disarming one's foes and distractions, by including them more, giving them more involvement and responsibility, and effectively listening to their perspective and concerns. When we take the time to sit back and patiently listen, in an effective, proactive and meaningful manner, we maximize our potential to achieve more. We generally have the choice to either waste our energies and polarize without listening to others, or making a true and concerted effort to really work with others in a proactive, inclusive, non - polarizing manner.

2. Each of us have certain strengths, as well as specific areas of weakness or lesser skills. Our only limitations, if we are willing to pursue all alternatives, is the amount of time in a day, so we multiply our efforts and potential when we inspire others to work with us, and make our efforts stronger and more meaningful. Far too often, individuals automatically resist any points of view that conflict with preconceived notions and attitudes, which invariably is limiting the scope and potential of our achievements. Rather than adopt an attitude that we have not only the best answers but all the answers, we achieve more when we open ourselves up to more possibilities, and thus opportunities. When we cooperate with others, we create a spirit of cooperation in others. The converse is also the case.

Whether you work for someone else, or if you sell a product or a service, or how well you've done, up to this point, when you become better at working with others, seeking common ground, and/ or a meeting of the minds, you'll improve and be more effective! For example, a Real Estate professional must work effectively, not only with his customer and/ or client, but with other agents, brokers, homeowners, etc, so the opportunity to create the meeting of the minds, becomes a far - reaching priority! Selling must be perceived as a cooperative, rather than an adversarial adventure!
 
Let's begin to commit to taking more time trying to work with others than finding reasons why we should not. When we seek out others, we create a far more positive, motivating and helpful attitude and set of behaviors.

Price Is Often Important, But Rarely the Only Issue!

Especially in challenging economic times, people seriously consider how much things cost and what the price is. When I was the Chief Operating Officer of a natural products manufacturer years ago, I remember that our price point was a serious consideration, in order to best position our products optimally in relation to others. However, while pricing and costs are important factors, when it comes to conferences and conventions, a far more important factor is almost always perceived value.
In my three decades of hotel negotiations, event planning, and conference and convention planning and operations, I have witnessed repeatedly, situations where organizations over-emphasized only the price that participants would pay. In doing so, they often neglected creating a program and agenda that would attract attendees. Sometimes even more importantly, these organizations did not sufficiently emphasize the attendee's conference experience, and when that attendee went "back home," rather than being the organization's best ambassador, he reported a less than stellar experience.

The almost laughable, if it were not so incredibly short-sighted, part of this is that the amount of "cost savings" that these organizers implemented, had little impact on attracting significantly more attendance. However, at the same time, this reduction created financial risk for the organization and an inability to provide a superior attendee experience. Organizers must recognize that a small price decrease in the fee for attending a conference often has little real impact on attendance. If it works at all, it only works in local events, where there are few expenses incurred by attendees besides the registration fee. However, many conferences require travel and hotel costs, and those costs often "dwarf" the registration fees.

In addition, if an organization is going to lower its registration fee, by how much will they reduce it? How much is a significant enough reduction to encourage additional attendance? What will be the overall impact on what conference organizers can do, when revenues are reduced? I have heard numerous conference and convention organizers state that the reduced revenues will be offset by increased attendance. However, what these organizers often under-estimate is the true cost to the conference per attendee. If it takes more attendees to generate the same revenue, and registration fees are reduced by, for example ten percent, how much will attendance have to go up to offset the drop in revenue combined by the true cost per attendee? In many cases, a ten percent registration fee reduction will require close to a twenty percent increase in attendance and registrations.

Unfortunately, like many things done by many organizations, their conferences are often run by well-meaning individuals, who are, nevertheless, less than professional conference and convention coordinators. Organizations must analyze both the short term and longer term ramifications of addressing solely the registration fee issue, without, at the same time, analyzing the perceived value aspect. It is essential that organizers fully understand all aspects involved, including, especially, understanding their niche or target market.

This concept applies, not merely to events, conferences, etc, or the price of a product sold! It also applies to service - oriented industries, and individuals, such as Real Estate Professionals! Someone listing their home, in order to sell it, should be wary of an individual who either over - promises in terms of their proposed listing price, or tries to influence the homeowner by cutting their commission, etc! If an agent can't negotiate well enough to maintain his own payment, how is he going to get the best price for your home? Isn't getting the best price, in the shortest possible time, with a minimal amount of hassles, a better goal?

Yes, price is important. But rarely, in the long - term, nearly as relevant and essential, as quality, consistent, reliable service, etc!