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The Vendor Client Relationship – Oh How Things Are Changing

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I don’t want to pay for your service

Over the past two years, many posts here on AG have been written about how the climate is changing between clients and vendors.  There seems to be a new reality that leaves many vendors (that’s you) scratching their head that for some reason every potential client they meet wants something for free.  In fact, they want to know what you know before they’ve even asked you the question.

I’ve eaten the food, but I don’t want to pay full price for it

We’ve had many argue with us that it was a blanketed statement that something was changing, and our response has always been to give it time, soon, this mentality will reach their office doors, telephones, or even face to face.  My feeling has always been that most just don’t want to change, most don’t want to adapt, most just wish to live in denial.

I can do this myself, I don’t need you

Interestingly this new phenomenon isn’t just happening within the real estate space, in fact it’s everywhere and in every space as demonstrated in this video.

Let’s barter

Take two minutes to watch this video:

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Benn Rosales is the Founder and CEO of The American Genius (AG), national news network. Before AG, he founded one of the first digital media strategy firms in the nation has received the Statesman Texas Social Media Award and is an Inman Innovator Award winner. He has consulted for numerous startups (both early- and late-stage), and is well known for organizing the digital community through popular offline events. He does not venture into the spotlight often, rather he believes his biggest accomplishments are the talent he recruits and develops, so he gives all credit to those he's empowered.

26 Comments

26 Comments

  1. Andrea Schulle

    June 29, 2009 at 12:33 pm

    Benn – you have hit the nail on the head with this one! Lani shared this video w/me a couple of weeks ago. I am dealing with this constantly now. Always something for free or at a reduced rate – nudge, nudge, wink, wink. Would you go to Macy’s or Nordstrom and ask them to give you an extra discount? See if your waiter at Truluck’s would throw in an extra crab claw just b/c you are you?

  2. Jeremy Blanton

    June 29, 2009 at 12:46 pm

    That video is one of my favorites!

  3. Ines Hegedus-Garcia

    June 29, 2009 at 12:54 pm

    CRACKING UP!! I recently had customer that contacted me to help them, then called me a couple of weeks later for me to congratulate them because he was under contract (using another agent) and to please give him names of my inspectors and other providers because they were so psyched about their new home. Then called me 2 weeks after that to ask for help because the deal was falling apart. So we give them the info, they don’t think they owe us loyalty, they want us to share our resources and we are supposed to be happy for them. (SIGH)
    Goes back to this: I also choose who I do business with – it’s not a one way street. Just because we are service providers doesn’t mean we will give it away (at least I won’t). I will provide value, I will show and reinforce the fact that I do provide value….not every client will need my services, but please don’t use my resources either – they are there for the exclusive use of our clients, the ones that appreciate us.

    (that sounds like a rant, no?)

  4. Anita

    June 29, 2009 at 1:09 pm

    rotf lmfao!!!!! Just love the look on the stylist’s face when he says “you want me to work for free?”.

    Thanks Benn, you’ve made my day.

  5. Joe Loomer

    June 29, 2009 at 1:26 pm

    Awesome Benn, just had a transaction where my client (seller) brought her sister in the mix – a mortgage lender in another state and location that has zero VA presence (it’s 23% of our market).

    The sister – herself on a commission-based income – starts asking me why I’m not making all these concessions to my comission I negotiated up front with the listing agreement and why I haven’t discounted my services to help my actual client out with the repair costs in the contract and subsequent inspection and appraisals. Once I told her I don’t work for her and would be happy to have that conversation with my actual client – her sister – she kinda backed off. Still – yeeesh – someone a branch of the same industry and word-one is “thanks for doing EXACTLY what you promised to do, but I want you to cut your pay.”

    Navy Chief, Navy Pride

  6. BawldGuy

    June 29, 2009 at 1:30 pm

    This video portrays exactly what I was talking about in my transparency post recently.

    Show us how to do it. Give us a discount. It never ends if you let it.

    At some point ‘service providers’ are gonna hafta grow a pair. You’ve outed so many real estate agents for what they’ve become: scared little girls whose guiding hope is not to be ripped off too badly.

    Thanks Benn.

  7. Paula Henry

    June 29, 2009 at 2:09 pm

    Ah – the never ending “just a little off” saga, because you are my friend, or brother’s – sister in law’s – nephew. It is sometimes difficult to judge who the person is who will throw you aside for a few hundred dollars.

    The perceived savings is rarely worth it and the same is true in every industry – you get what you pay for.

  8. Cheryl Allin

    June 29, 2009 at 2:10 pm

    I love this video, it so speaks to what us website and graphic designers have to deal with on nearly a daily basis. We get the, “You can do it for us for free and add it to your portfolio…” or the “I want you to completely redo this and change everything but I don’t feel we should pay any revision fees.” I’m sure it exists in nearly every service industry. It might not always be easy to recognize if you’re doing this to any of your vendors, but it’s a nice reminder.

  9. Matthew Hardy

    June 29, 2009 at 3:11 pm

    The message of this video is as old as sales itself. The *really* important message of the video is not in the requests of the buyers, but in the lame responses from the sellers. If a seller/vendor doesn’t understand and appreciate the value they bring to the marketplace they’ll get taken advantage of by buyers like those in the video all day.

    I used to write custom software for hospitals, universities, corporations and governments. I *always* required a large retainer before starting *any* work and that all invoices were due and payable upon receipt. One time, when presenting to the City of Baltimore, the big-shots on the other side of the conference table explained that they didn’t pay retainers and that all work must show itself stable and to their liking for a period of six months before any of my invoices would be paid.

    I did not move from my position even a centimeter.

    I got the contract (the one I wrote), the exact amount of my retainer and my invoices were paid immediately. Moral: if you’re unsure of the value you bring, consider yourself ripe for the pickin’.

    On a side note, author Tom Foremski wrote a very interesting article I recommend to you entitled “The Internet devalues everything it touches”available here: https://tr.im/qcCd

  10. Benn Rosales

    June 29, 2009 at 3:47 pm

    Matthew, you’re right, the paradigm isn’t the question, the new paradigm is the rapid fire nature of the question in volume.

    I remember my grandfather when I was little telling a client (non-real estate) that he’d be happy to provide a discount if his clients would be kind enough to deliver the pink slip to the folks that would be losing their jobs.

    I didn’t understand what he meant until 2005 when I stood face to face with a client asking me to rebate 99% of my commission for my hard work- you can guess how that conversation ended.

  11. Matthew Hardy

    June 29, 2009 at 4:00 pm

    Rock on Benn. Do a good job and get well paid.

    PS: This is for Lani… https://www.youtube.com/watch?v=tVlbvxd0Q10

    High-quality real estate agents (and cars) cost money. 😉

  12. Matthew Hardy

    June 29, 2009 at 4:38 pm

    Also, just came across this excellent article in The New Yorker entitled “Priced To Sell, Is free the Future?” by Malcolm Gladwell. Available here: https://tr.im/qddt

    My favorite quote: “Free means never having to make a judgment”; something we see the back-end of every single day: agents who wasted their time on tech that did not afford them any leverage over their work but simply became another thing to move *from*.

    Especially interesting to read along with the above mentioned “The Internet devalues everything it touches” (https://blogs.zdnet.com/Foremski/?p=556)

  13. Ilene Haddad

    June 29, 2009 at 8:42 pm

    Welcome to my world.

  14. Lori Luza

    July 1, 2009 at 6:15 pm

    Nail. Head. Driven.

    We see this a lot in photography, too. After all, everyone owns a digital camera and uploads images. What they don’t have is perspective on retouching 1200-1500 images after a wedding shoot with multiple photographers and uploading them for all the guests to see. They just fail to consider the scope (as well as the costs of having redundant equipment should something fail as the bride is walking down the aisle.)

    It’s been a difficult challenge to educate our potential clients while keeping the kind of decorum necessary for a wedding consultation with a bride and her mother and future mother in law. Slowly, I think our industry is getting there….but it’s teensy tiny baby steps.

  15. Debbie Holloway

    July 6, 2009 at 2:17 pm

    This is the sales society we are in today. The question is, how do we as a whole change the current attitude of getting it for free? Those of you following me on twitter, check this out!

  16. Tom Ferry

    July 20, 2009 at 12:22 am

    Your post and the video, in my opinion, speak to the value shift that’s only amplified by the current economy. We still want it all, though too many over life styled badly and are in trouble… so now I want it all… for free.

    thanks for the post!

    TF

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