Are you a Hunter or a Farmer?
I'm probably good for about $10,000 per year to the restaurant I've been eating breakfast at the past couple of years.
But our business keeps growing and we've outgrown our home office. So I'm open to finding a new "regular place". Directly across the street from the new office is a restaurant that I was really excited about. A real contender. Until today.
First of all you have to picture it, the new office is actually a ground-floor commercial condo in an amazing 4 story building in the middle of Coconut Grove just on the border between the business and the residential district. Directly aross the street from the front door of the new office is this very homey, outdoor restaurant with a big covered patio wi-fi and a decent breakfast menu.
So you can figure I'd be eating breakfast there maybe 4 days-a-week X $12.00= $2,304/year.
Plus a $50 lunch once or twice-a-week for me & whoever I'm meeting with (if we're not discussing anything confidential) = $2,500
Plus $100 for dinner for me & my staff maybe 3 times-a-month = $3,600
Plus the occasional slurge, introducing friends to this place etc. and we could easily be talking about my value as a customer being closer to $20,000 per year.
Other than the fact that I eat breakfast-out more often than most people I don't think my value as a new customer is all that unusual for a decent restaurant.
In a few months when we get to the subject of how & when to hire, train & manage staff so you can make a profit from having staff. For now I'll just say it's best to "hire slow & fire fast". Which, whenever I don't follow my own advice about this, I always regret it. So I'm "interviewing" this restaurant before I get too vested in adjusting my routine to eat there and make it my new place.
Today they blew it. I'll be happy to share the details if anyone is interested. But the details are quite beside-the-point.
THE POINT: Today the owner of that restaurant let a $10,000 customer walk out the door because of the ego of his or her manager. And what's worse there's no way for that owner to even know where all his or her profits are going? He or she is probably busy blaming "the economy"!
When you don't have marketing & management systems & procedures in-place that's what happens… Staff runs-amok. So you say to yourself it's easier in the short-term not to have staff. But without staff your entire business is balanced on your back. Or if you do have staff, without proper systems you're at their mercy!
HOMEWORK:
1.) Figure out the lifetime value of your average client. Not just the transactional value.
2.) Identify three things your systems do for you to distinguish between your low-value and your high-value clients.
3.) Send me back an email and tell me one of the things you do as the owner of your business to be sure your best clients are happy with their experience with your law firm so that you can maximze the value of your best clients and protect these important relationships. Depending when you reply to this it may take me awhile but I will respond to you!
~ RJON
p.s. Whatever you do, PLEASE DON'T TELL ME YOU JUST DO GREAT WORK. Don't you think that's sort of the bare-minimum?
p.p.s. Hunters have to hunt or die. Farmers live long & prosper. You cannot sell your hunting prowess. You can sell your farm, and if you manage it right there will be plenty of takers whenever you're ready. Hunting cultures always die-out. Farming gave us the chance for leisure which lead to invention. Lawyers who depend only on new clients, new clients, new clients burn out. Lawyers who learn how to build a business tend to be happier and consequently, make more money.
