It’s harsh, but we all do it. We judge people. All the time. And for good reason. If we are smart, it helps us chose the company we keep.
It’s the same for clients. I’ve adapted the work of Nanda and Narayandas (2021) of the Harvard Business Review to strata schemes and made it as easy as ABCD.
A is for awesome.
These schemes pay well, take advice, fulfill their obligations, and give you no trouble. They have an active committee. They budget sensibly and promptly attend to their obligations to maintain and repair common property. They are a delight to work with and as a result, get the best from you. Sadly, they're a rare breed.
B is for balanced.
Their fees are fair, perhaps a bit on the low side but you cop this because they're easy. Usually. Relatively. They have an active committee or at least one or two hard workers. They accept your advice and are never rude to your staff.
C is for challenging.
Probably, they are your bigger schemes. They might be mixed use or layered schemes. There are factions within the ownership group that take disproportionate amounts of your time. They defer important work because they can't agree. You took them on as a marquee client. Now, you're not so sure.
D is for difficult.
They came to you unhappy with their former manager’s communication and lack of proactivity but wanted a lower fee. You needed the insurance commission so you took them on below the rate you would normally charge. Everything is ignored until it's urgent. Everything must be cheap. They refuse your advice and always want another quote. They are rude and obnoxious. They suck the life from you, and your team.
What's the point of this exercise?
- It helps you decide if you have the right people servicing the right clients.
- It helps you assess your risk and return on specific clients. Do their fees need to be substantially adjusted? Do you need to suggest a different way of working with them?
- It helps you determine if they should be sacked as clients. Are they too much trouble? Are they a risk to your staff's mental health? Are they holding you back from better things?
So, exercise a bit of judgement in your practice and reap the rewards.
Michael Teys advises strata management businesses on improving profitability through professionalisation and streamlined operating systems.
He has more than 30 years’ experience as a strata lawyer and academic and has owned 11 strata management agencies throughout Australia. He has a Master of Philosophy (Built Environment) and Bachelor of Laws. He lectures and writes widely about strata management issues in Australia and internationally.
