I vividly remember my first day of second grade. My family had just moved to Dallas, and we were living in a hotel while our house was being completed. With no kitchen or groceries to make a sack lunch, my mother instructed me to eat in the cafeteria.
As she dropped me off at my new school, she reached into her purse for my lunch money and pulled out the only cash she had on her: a $20 bill. This was a significant chunk of our family grocery budget for the week, but with the school day about to start, she reluctantly handed it over.
I snatched it up, hopped out of the car, and headed inside. I could barely believe my luck. A sack lunch was all I had ever known. But now I was the new kid in a new school, and I had a small fortune in my pocket. I could hardly contain my excitement.
At lunchtime, I found my way to the cafeteria, and with eyes bigger than my stomach, I loaded up my tray. Hamburgers, hot dogs, pizza, white milk AND chocolate milk — if they had it, I got it. I probably spent $10 on my feast that day while the poor suckers around me were stuck with whatever they could get for $1.25.
I felt like a king. But even though I stuffed myself, I couldn’t eat a quarter of that lunch…which only made the after-school tongue lashing I got from my parents that much worse. I wanted it all, and I paid the literal and figurative price for it.
I’m reminded of that story not because this is the time of year when kids are returning to school, but because I’m noticing business owners around me with the same expression second-grade Tom had when stepping into the cafeteria line.
Fall of 2021 looks a lot different from 12 months prior. After a lengthy period of limited demand and options, owners now have a smorgasbord of opportunity in front of them.
More accurately, owners have more diversity of opportunity than ever before — not just since the pandemic. There’s increasing demand for different products, different services, different projects, and different timelines, and more interest from different types of clients.
Opportunity abounds, and while that’s all very exciting, not being intentional about the opportunities we pursue can end up hurting our businesses.
You Are Not Your Appetite
Whenever a major shift occurs in the market, owners can quickly lose sight of a core tenet of their business: the business exists to serve its customers.
This oversight obviously happens in negative market shifts where we become primarily concerned about our own survival, but it’s also true in upswings.
We see opportunities, and our eyes get bigger than our stomach. The catch is, it’s not really our stomach, is it? The appetite we need to satisfy is our clients’. Any other “cravings” we may experience are purely psychological.
The difference may seem nuanced, but I assure you it’s not. With the increase in opportunities and their diversity, choosing which opportunities to pursue should revolve around what your customer needs.
If it doesn’t serve your customer’s needs, should it really be going on the proverbial lunch tray?
At a logical level, the answer is obviously “no.” But in reality, it’s tougher to swallow. I’ve had clients tell me, “Tom, this is my chance to get back to pre-pandemic numbers. I can even make up for that lost 2020 revenue by offering all these new services, right?”
Maybe… But only if these new opportunities and offerings are what your customers need. Otherwise, you’ll be wasting a ton of effort developing systems and processes for products and services nobody will buy from you.
This is what I believe to be the most important lesson we’ve learned so far in 2021: instead of filling up your tray with all the jobs you can do, only take on what satisfies your clients’ needs.
Instead of Pursuing Jobs, Pursue Clients
This may seem like an oversimplification. After all, meeting your clients’ needs is common business sense.
But as we take this principle of putting our clients’ needs first from theory to practice, it can have profound implications (and surprising applications) for your business.
Here are two examples to illustrate what I mean:
Rental Companies Should Be Paid for Their Value
Rental companies are seeing growing opportunities in the customers they’re attracting. They’re able to service more buyers (and more types of buyers) than ever before.
To take full advantage of this opportunity, it seems most logical and simple to send out as many quotes as possible to interested buyers, and then to rent out the equipment when buyers are ready to pay.
For example, let’s say you have six LED walls in your inventory and 10 buyers reach out for quotes. You deliver the quotes, and when buyers are ready to finalize the deal, you rent out your equipment. With all six rented, the four remaining buyers have to look elsewhere. It seems straightforward enough, but there’s a missed opportunity here that stems from the overlooked value you provide.
A common misconception among rental companies is where their real value lies. Because you rent equipment to customers, the value seems to be in the equipment itself. But in reality, the value for your client is in the reservation.
Buyers can get quotes for equipment rentals from any number of rental companies. But guaranteed availability for specific equipment at a set price is worth much more — especially since 9 out of 10 rental buyers are agents for end users.
Buyers want to confidently deliver a quote for their own buyer. That confidence comes from knowing that the equipment you’ve quoted them is guaranteed to be available. Knowing where the real value lies enables you to capitalize on a new opportunity, which in this case is to charge non-refundable reservation fees.
After your buyer receives your quote and communicates that they want to move forward, tell them you can only guarantee availability with a reservation. This comes at a fee — say, 10% of the rental value.
This saves you from the lost revenue that occurs when buyers cancel a reservation at the last minute with no penalty. After paying a reservation fee, they’ll rarely back out in favor of another quote.
After you’ve delivered, you can build on that relationship. You create a repeat buyer who values the frictionless quoting and reservation system whenever they work with you.
Production Companies Should Provide Solutions for All Event Problems
In the past, production companies could be picky about the services they offered to clients. But demand in the event industry has changed, and more clients are looking for total solutions.
For example, several years ago you could say that you only rent sound systems and still maintain your business. Now, clients are less concerned with solving their sound system problems and more concerned with solving their audio problems using a single company. They’re even more interested in finding a company that offers solutions for all aspects of their event.
In other words, their appetite has grown, and it’s up to you to put what they need on the tray.
So production companies must provide a whole host of solutions, even if that means using third-party services for assistance.
This concept of meeting clients’ needs first and foremost isn’t about decreasing the services you provide to your clients in the face of increased opportunity. It’s about utilizing the increased opportunities available to you only to the extent that they meet the clients’ needs and provide them real value.
Doing anything else will hold your business back from revenue, gross profit, and intentional growth.