In commercial real estate today, most of your results (in commissions and listings) will be created through specific involvement with just the top 20% of your clients. Understanding just who are the clients in the top 20% is the important issue to work through. You could say that they are the VIP clients that you should be working with.
The 80/20 concept is called the ‘Pareto Principle’ and it was identified as a general business rule back in the early 1900’s. So what is it? It is a known fact of business and a proven equation when you are looking to covert more results from your efforts. You can use the rule quite comfortably in commercial leasing, sales, and property management.
So we move the concept into commercial real estate for your location and apply it to your business. It doesn’t really matter how many clients you have in your database now, it is the top 20% that you need to identify and then comprehensively service over time. Approximately 80% of your revenue activity will come from that group of elite clients.
In this audio program, John Highman talks about the 80/20 rule and how you can work with it. You can listen to the program or download it below.
In commercial real estate brokerage, the clients that you convert and work with can give you plenty of property business over time. Get into your database and split it up into client categories, zones, property types, and budgets. Update all of the contacts in your database and reconnect with the best people.
Look for the quality clients that you can work with productively and exclusively over time. They will be your VIP’s when it comes to contact and service.
Understand how you can add value to their property situation and exactly when they should need that special help in solving an investment or property occupancy challenge. Refine your services accordingly. You are (or should be) the expert so build your brand with your clients accordingly.
Quality clients are good business
So your good clients should be with you for the life of your real estate business. If you like, that by definition is the window of your professional career. Over time your real estate business then gets easier and more consolidated; that consolidation comes from the quality of your client connections. How can you do that?
Do you have some good clients now or some targeted clients that offer more property related opportunity to you? Think about these things:
Industry updates – Think about your location and explore the things that are happening. Visit the local planning office to see what new developments are coming up. From the list of upcoming development applications, you may be able to write or talk about precinct enhancements and changes.
Market coverage – Most clients like to know that they are working with an agent or broker that really controls the market for the location. Specialization will help you do that. Drill down into a segment such as offices, bulky goods warehousing, investment performance, shopping center leasing, and then look at your opportunities in each. Write articles and editorials about the specialty segments. Share those articles and information editorials into your social media channels.
Use Social Media with focus – Most agents and brokers don’t use social media very well at all. They simply do not lift their social media profiles enough using relevant and high quality comments and content. Consider how you can be of value to your clients and prospects. What do they want to know about? What are their local property interests? From those 2 questions you can write specific articles, share statistics, create charts, and take photographs. The increase of electronic media tools gives you a lot of alternatives to work with.
Treat your VIPs differently – When you know that a client or prospect is of importance to you, consider how you will interact with them over time. Be personal, relevant, and real in how you contact people and talk to them. Ultimately you want your VIP clients to remember you as they get to the next property challenge. It is a simple recipe to remember and market your skills and knowledge with.
Seek referrals and contact people often – At a basic minimum, contact all of your clients and prospects frequently. That will usually be once every month, or any period up to 90 days. After 90 days the client and prospect contact process is less meaningful. Build a contact process into your database that sets the right client momentum and awareness through personal contact.
Put clients at the center of your commercial real estate business. Create relationships with your top clients that will extend for the duration of your professional career in property.
Those special and ongoing appointments will only come to you through your direct prospecting efforts and new business focus. Don’t let a day pass without a deliberate and direct focus into new business opportunity.
There is one fact to remember here as you strive to improve your commercial real estate career. Our industry is usually based on local personal contact and individual trust. That is why meetings and appointments are so important.
So what about luck?
Certainly there will be a degree of luck helping you gain some market traction and listing opportunity, but most of the quality new business that you create will come to you through deliberate prospecting and client contact over time. There is really no other consistently good way to grow your real estate business comprehensively and directly.
Make quality choices
So you have some choices to make here. You can move through the industry slowly, or you can take the fast track to grow your leads and client list. If the fast track is for you, then consider the following facts and strategies:
Exactly how can you reach out to new people in an ongoing and relevant way? The message here is that you cannot and should not be average when it comes to your prospecting and client communications.
You will need some local market information and research to support your prospecting activities. In every connection and communication, provide that local market information professionally and specifically to the right people. Vary your market information presentation strategies using graphs, charts, statistics, photographs, and case studies. Allow those specific marketing tools to support your professional skills.
What types of clients and prospects should you focus on? Always bias your prospecting efforts towards quality; the definition of quality would relate to specific buildings, specific clients, particular property precincts, and certain local businesses. Within your client and prospecting list, you should have a select group of VIP people that you will be connecting with more frequently and more directly. Action your contact into that list.
Remember the opportunities evolving from asking the referral question. As part of every client and prospecting meeting, ask for existing and future referrals hence providing links to other people that may have a property interest. Some of your clients and prospects will know a number of other property people from the location. Ask the right questions relating to referrals at the right time in every meeting and in every client relationship.
What are your services? Typically, you can provide specialized brokerage services such as a seller’s agent, a buyer’s agent, a tenancy advocate, or investment specialist. In each case you will need a deliberate marketing approach and focus. You also need specific and supporting market information to help you penetrate the market.
So there are some good things that you can do here to create more appointments locally as a property specialist. Every day should be a special day when it comes to generating new appointments with new people. Start the day with a prospecting approach to new people.
VIP clients are really important in commercial real estate brokerage at any time. Here are some good ways to manage your vip list
In commercial real estate brokerage today, the clients that you serve are not all the same. Some are better than others. You will know the criteria for that segmentation. They may have more buildings, better buildings, or be more motivated to act in commercial real estate soon.
Every commercial real estate agent should have a prospecting model. In an ongoing way they should be connecting with new people each and every day. That can be a challenge for some brokers and agents as they balance workloads and property listings. The fact of the matter is that we should all be careful when it comes to personal time focus and client commitment.
Attract and Focus on the Best Properties and Clients
We should be focusing all or our prospecting activities and model on the best opportunities and the best clients locally. Applying that back to the beginning of the contact pipeline cycle, we should be concentrating our prospecting skills into the best segments of the market and particularly the best people owning an occupying the prime buildings and the prime properties.
We all get our fair share of poor quality listings and redundant properties. That being said, we do have a few choices to make when it comes to accepting a listing and working for a particular client. As you grow your market share, be increasingly selective as to the properties that you list, and the clients that you work for.
The larger properties and the better listings will always create better enquiry churn and activity from your marketing activities. If you focus on the higher quality listings within a location, the levels of enquiry will always be higher, more active and interesting. That is how you can build a pipeline of investors and prospects faster within a location.
Here are some ideas to help you improve your prospecting activities within your town or city:
COVERAGE: Understand the coverage of your prospecting activities. There is no point in spreading your prospecting activities across a huge area or a large town. You have limited resources and time to cover the market. Consider your territory and split into priority precincts of prospecting focus. You should have your primary zone of prospecting. Most of your new business should come from that defined area. Everything else outside a primary zone will be a secondary focus; listings may come to you from the secondary zone but you would not specifically prospect into the secondary zone. Understand your time as a resource, and focus all of your prospecting on a time basis into the primary precinct of property activity. Typically you will need about 2500 properties to focus on in that primary precinct so you will need to get organised. Over the year you can get to know all of the best property owners, the business leaders, the lease expiry dates, and investment opportunities.
LOCAL PROPERTY: Focus within particular property types locally. When you focus your prospecting activities within a particular property type, you can get to know exactly what’s happening when it comes to prices, future supply, and time on market, contracts, and leasing. You can also predict what challenges may exist when it comes to the segment and the location. That then allows you to adjust your marketing activities and any negotiation factors that arise.
PRIME PRECINCTS: Get to know the owners of quality properties in prime locations. As a commercial real estate specialist, you will already be focusing on certain segments of properties such as office, industrial, or retail. Within those segments, identify a small group of prime properties locally. Determine the ownership identity of those properties and make contact. Connect with the owners and build relationships at professional level. Understand that those property owners are likely to be talking to many local agents, so your connection will need to be comprehensive and professional at all levels.
THE BIG END OF TOWN: Track the property ownership and occupancy activities of the larger businesses and corporations in your primary prospecting precinct. Certain businesses will be more successful than others and therefore more active when it comes to property. Certain industries will be looking for resolving factors of expansion and contraction. You can and should focus your prospecting into the active segments of the local companies and businesses.
These four simple approaches to commercial real estate prospecting will help you find the right people to talk to in a timely and ongoing way. Focus on building relationships. As a general rule, don’t list or work with low quality listings unless there is a bigger agenda to support the approach.
Understand that your pipeline of prospecting will be an ongoing event and will require a commitment at a personal level to keep up the momentum and the persistence. Over time you should be talking to many hundreds of people in an ongoing and relevant way.
Keep it moving
Connect with all the people in your database at least once every 90 days. When you can identify a property need or challenge, the frequency of contact will be shortened to monthly or even weekly.
Relevance is the key to making the contact prospecting process work effectively with reasonable levels of conversion. The relationships and the trust that you build through that regular contact will eventually lead to listings and property requirements. That’s how any top agent will build market share and grow market relevance.
Most agents and brokers that are struggling in the property market today are doing so for the simple reason that they are not ‘relevant’ to the prospects and clients that are looking for property help.
Relevance wins property business; the ‘generic approach’ to commercial real estate has little magnetism for pulling in listings or commissions.
Disaster strikes when there is no real reason for clients, business owners, investors, or tenants to remember a particular broker or agent, and particularly so at the right moment when they are handling property issues and challenges.
So where are things now?
Want to improve your real estate business? Answer this question. Why should a commercial property client or prospect choose you to help them with a property challenge? It’s a scary question to ask; commonly the answers given by most agents are ‘generic’ and bland like these. They can provide:
Local market knowledge
Team service for the client
Client communication, etc.
All of these things are too ordinary, and just about every agent or broker uses the same ‘ordinary stuff’ which inevitably makes little or no difference to the clients that they serve. The statements are of no real attraction or interest to any client wanting property help.
So what can you do here when pitching your services? Clients prefer ‘specifics’ that are matched to their property challenges. For example:
A database of 2000 tenants in the location, 250 of which have been shortlisted to the client’s property listing (Leasing)
15 parties ready to inspect the new listing in the next week (Sales or Leasing)
Savings of $40,000 to be found in energy by load shedding (Property Management)
4 investors that missed out on the last local campaign are to be contacted (Sales)
If you haven’t got a very specific answer to that question given, then it is likely you will struggle for some time in converting business leads and opportunities.
Why do you have to determine a clear answer to that question? In simple terms you must be able to market yourself specifically as the best agent for the job. The only way you can do that is through a mixture of the following:
Locational coverage – Split your city up into a ‘primary zone’ for implementing all your prospecting, and a ‘secondary zone’ where you will still take business if it arises. In this way you can really cover the right people and the right properties in your ‘primary zone’. This extra level of focus in prospecting helps you with local area information, market evidence, and personal marketing. The question arises as to how many properties and or owners you should have in your ‘primary zone’. The answer is related to your capabilities to cover the patch with a direct marketing approach. You are the person that has to make the calls, create meetings, and door knock streets. In an ideal city location, choose a primary zone of properties and streets containing about 2000 properties. Then you can split the location up into activity zones that you can move through in a logical way.
Marketing mastery – Ensure that all of your promotional efforts are well crafted and implemented. Use words, phrases, photographs, and layouts that pull in the enquiry. Top agents are usually respected and chosen for their marketing skills.
Database depth and relevance – If you prospect directly into your area, you can build a database that will help you build your business. It is very hard for a client to overlook an agent that has a top quality database containing people from the location and within the targeted segment of business owners, tenants, buyers, or business leaders.
Property speciality – Get to know everything that you can about a property location and speciality. From that effort you will then understand where the next listings are likely to evolve and why that is the case. You will also know what things are selling or leasing for. You will understand why some levels of enquiry are better than others with certain listings. When you understand the enquiry, you can do something with it and improve it over time. Know what people are looking for in local commercial property and then market comprehensively into that.
Commercial real estate brokerage does not need to be complicated but it does need to be relevant. Get involved with your property market and show the right people why you are highly relevant to them as they seek to solve a few property problems.
To get a reasonable market share around you in commercial real estate brokerage you should consider your daily efforts and actions. Understand what you are doing and not doing. Understand the things that are wasting your time. From that point it is just a matter of change.
Caution! Some agents and brokers never change their ‘problem’ habits, and on that basis they struggle for their entire career. Things don’t need to be that way.
How’s Your Business?
Perhaps you are wasting your own time in real estate due to a lack of process and quality in your business systems? So it is time to step up to move into a better level of property performance. It’s a good year in the industry and there are things out in the market to be done.
If you are lacking listings, enquiries and clients, then you are likely to be lacking good business processes centred on the best clients and properties. Here are some ideas to help you resolve that:
Think about and action your prospecting around your listings – When you have a listing in your area and within your property speciality, you have something to work with. Use your listings as reasons to talk to others in the street or suburb. Remember that business owners need to relocate from time to time, and property investors look to upgrading their portfolios. Help those people remember you at the right time by getting in contact and staying in contact in a relevant way.
Referrals – When you have finished a successful transaction you will have the opportunity to explore referrals, leads, and repeat business. If the client is satisfied with your professional efforts then there are things to do with referrals and leads. Help other people to direct you to the next clients and property owners that you can serve.
Previous clients – Go back in your sale and leasing records to find those people that you and or your business has helped over the last 5 years. It is likely that some of those people are still active in the property market. Do they want some more help?
Other agent’s clients – Don’t be afraid of positioning yourself with clients that currently use other agents and brokers. There could be some reasons for those clients choosing a different agent. Professionalism will help you connect with those people and stay in their memory for the right reasons.
FSBO – This is a strange market segment, although a useful one. Some FSBO owners eventually give up trying to resolve their property problems. Let’s face the facts; they probably don’t have the contacts, the database, or the skills to negotiate a sale or lease deal professionally. Can you help them?
Investors – Local property investors are great clients for the long term. They need all types of help across tenant mix issues, leasing, selling, renovating, and portfolio mix. When they trust and respect your skills, you can do something to help them.
Business Owners – Stay in contact with local business owners. They will require professional property assistance at some time in the future. Keep them up to date with prices, rents, enquiries, and stock availability. Share your facts about the property market and pull in the local business owners that can use your help.
These simple strategies will help you attract more new business in the best possible ways. Make yourself known locally as the agent of choice; that agent that people must go to when property challenges present.