When you work in commercial real estate, you really do need a good quality database that you can rely on to find the right people and properties as part of a matching process. Whilst it seems so logical, most agents struggle with the discipline of a database. They have issue with things like:
Finding the time to make the calls
Capturing all of the information from meetings and calls
Keeping up the call momentum
Integrating the client list with emails and brochure dispatch systems, etc.
So the list can go on. The database is the prime way to find real estate opportunities and do something with them. Today there are plenty of options with software brands, data collation methods, and pipeline tracking, for some positive results to be achieved by any broker or agent in commercial real estate. Everything comes down to personal application and effort.
You don’t have to pay a lot of money to have such a program helping you grow your real estate business. One key decision in all of this is whether you should go ‘cloud based’ in your data storage. Common consensus says you should, given that most people like to access their client and prospect information from a variety of devices when they are away from the office.
In this audio, John Highman talks about the client list processes and how you can work the data that you gather from your clients today.
As you work through your career as a broker or an agent, take the time to understand where you are positioned professionally and competitively in your town or region taking into account the levels of broker and agent competition. (NB – you can get our free commercial real estate broker course right here)
In the property market today, it is best if you take the time and make the effort to stand out as an industry professional.
Top agents of the market understand exactly where they are professionally in today’s market terms; by professionally I mean listings, market share, commissions, and client service. They also understand exactly what they are going to do to improve their market position over time.
Here are some ideas to help you establish some performance indicators and professional targets for commercial real estate clients, as a broker or an agent. You can very likely add to the list based on your property specialty and location:
Signboards – do a signboard count on a monthly basis so that you can understand and relate to the numbers of signs that you have in the market by comparison to the other agents and competitors around you. Local area presence and signboard activity will always help you attract more inquiries and activities from your exclusive listings. Your signboards are a marketing process to refine and optimize.
Listings by type – compare the numbers of listings that you have in your territory by way of open versus exclusivity. Your exclusive listings are the only ones that really matter when it comes to market share. At least 75% of your property presentations should convert to exclusivity. Open listings are generally a waste of time although the strategy can be a last resort if necessary with a difficult client or a unique property.
Database – review your database on a monthly basis so that you can understand the levels of improvement and the growth of activity with meetings, calls, conversions, and inquiries. You cannot easily delegate the data base process to others within your business. Ultimately the database supports your commercial real estate activities into the future and that client list will be a critical component of your growth of market share. If you are struggling with commissions, listings, or clients, then it is very likely that your database is lacking in some respect. Take the time to understand that client list now and your prospecting activities to grow the database.
Internet – on a weekly basis, review the new listings coming onto the market across all the Internet portals. Compare your online listing numbers to those of your competitors. Understand the positioning and the ranking of your listings within your targeted suburbs and locations. To boost your business, you will really need to take the time to bolster your online profile and the exclusive listings that you have placed on the portals. There are various strategies that you can use online such as search engine optimization, social media, and article marketing. They are all very effective when it comes to establishing and growing a personal marketing profile for any broker or agent.
Commissions – look at your commissions and conversions as they exist today in both sales and leasing activity. Break the commissions down to a transaction level so that you can see the size and the types of property that you are working on per transaction. This simple strategy will allow you to assess preferred listing types and listing sizes. Focus on the listings that the market requires and where the enquiry may be centred at the moment.
A successful career in commercial real estate brokerage will usually be centred on predictable trends and activities.
Keep your business and your efforts simple and direct; that’s the secret to getting anywhere in the industry. Action is very powerful if it is deliberately directed into the things that really matter; they are usually clients, properties, marketing, inspections, and negotiations. Nothing else has priority in our industry.
So what are the things that really matter in the industry, and what are the fundamentals to take you forward? Put yourself into your property business and market yourself accordingly.
Each and every working day, connect with new people, qualify them for the location and their interest in property, and then stay connected for the longer term. Put yourself into the property market; the relationships that you build are really important in so many different ways.
Use the Marketing Tools Available
Use the different tools of communication that you have available both online and off-line so that you can grow a profile of professionalism and market coverage. Most agents and brokers take an ordinary approach to communication today; you can do better than that. Use the marketing tools that are available at your fingertips and within your brokerage.
You are the point of difference that can drive more real estate opportunity over time. There are plenty of other agents and brokers in the location all chasing the same properties and clients. Your relevance and professionalism will be the factors of importance to take you forward as a top agent or broker.
Be Different but Relevant
Build some points of difference into your professional services, so that you can stand out as the agent of choice for the location. The clients that we serve understand the value of a highly skilled agent or broker with deep and meaningful market coverage. Clients will usually choose their agent or broker on that basis.
Here are some ideas to help you build your business from the essential and required fundamentals:
Database growth – at a personal level, you should be building your database each and every day. You cannot and should not delegate the process. Talk to new and fresh people as part of your prospecting model, and then into the detail into your database records. Build your business on local area information and personal contact.
Local area marketing – become a specialist for the location and market every exclusive listing comprehensively on that basis. When you have some listings to work with, you have plenty of reasons to talk to other people in a meaningful way. Use your listings to open the doors of opportunity and communication across the local area.
Connecting with people – there are always plenty of people to connect with locally across the different industry segments. Deliberately research and communicate with business owners, investors, tenants, and property developers. The process of research takes time and effort, so you will need a segment of your day devoted to the required research.
Understanding the property market – look at the factors of change in your area with a focus on listings, prices, and rentals. Understand the future supply and demand for the location, and also track the levels of inquiry for the area.
Refining your professional skills – certain skills are more important than others in commercial real estate today. Put some real effort into marketing, presentation skills, and listing skills, so that you can move most of your listings to negotiation and closure. Every broker and agent should be practicing their skills in a regular and ongoing way. The industry is competitive, and yet the rewards are many. Position yourself for the best properties and the best clients through constant and ongoing practice.
Building your relevance for the location – the clients that you serve understand the value of a top agent who understands the area and the property types. Build your relevance for the location so that you understand the streets, the buildings, and the levels of recent inquiry. When you understand what is happening locally, you can convert your listings more successfully and directly. Exclusivity is also a lot easier when you understand your location in a comprehensive way.
Marketing properties – the properties that we list today can be promoted comprehensively both online and off-line. Look at the tools available to you when it comes to marketing, and then match those tools into the best methods of sale or lease as the case may be.
A successful transaction will usually be the end result of a carefully constructed marketing campaign directed at a target audience. That strategy requires effort and money. Always seek vendor paid marketing funds as part of your listing processes.
So the message here is that you cannot and should not complicate your real estate business as a broker or an agent. Simplify your prospecting and client contact processes. Market yourself deeply into a location as the industry specialist that the people are looking for.
Commercial property activity and hence brokerage should be simplified. Don’t overly complicate things. Establish a system that can work for you with a bias towards simplicity and action. That will then allow you to establish a plan of momentum and track the results that you are achieving.
Condition your clients to the prevailing market conditions – throughout the year certain things will change in your property location and within the property categories. Keep a series of charts and statistics that relate to the prevailing market conditions. You can use those charts as a conditioning process in listing and negotiation activity.
List your properties exclusively – avoid the open listing process. Open listings are of little or no benefit to you. Exclusive listings really do matter in our industry and will provide you with controlled listing stock. When you control the listing, you control the negotiation, the inspections and the marketing. The inquiry with an exclusive listing comes to you as the client’s representative. You can do more with that inquiry and shape the momentum of the deal.
Consolidate and grow your database at every opportunity – from the very start of your career, establish a database and grow it each and every day. It is a personal process and will require your total effort consistently and persistently. You cannot delegate the process. As you talk to new people, you can track the relationships that you establish, and the opportunities that you identify. The conversations that you create with new people will allow you to understand the pressures and the challenges of property ownership, investment, and occupancy.
Look for the pressures of the property market and the people that are needing some pressure relief. Segment your database into locations, client types, and timing requirements.
Every time you create a new listing, revisit your database and see if you can create a match or a short list of people to discuss the listing with.
Many transactions today are the result of off market listing activity and database contact. The conversations that you create as you build your database will be very important to your professional career. Practice the process and improve your client list.
Local property investors will and should be an important part of your real estate business in commercial and or retail property. The important thing here is that you are building your network of investors in a constant and relevant ongoing way.
Commercial and retail property investors are unique when compared to those others investing in residential property. Commercial and retail owners have challenges and opportunities arising in property ownership and development; they work from a base of logic and opportunity. Tenants, market conditions, and rentals are quite volatile and can disrupt property cash flow; I call it the ‘disruption factor’. You can control those things.
What do they know and want?
Investors shift and change assets based on the market conditions and how they are placed in that from an asset perspective. Get to know your clients and their assets from a strengths and weaknesses perspective. It’s really important when you are looking for listings and commissions.
So how can you work with this ‘disruption’ factor in a positive way? You can be the solution provider, by staying ahead of rentals and occupancy issues locally. Your database of businesses, tenants, and property owners will help greatly with that.
Your database and client list
Look at your database now. How comprehensive is it? More importantly, how up to date is the information and contact detail in it? Put your database at the center of your real estate business, and you will then find leads and opportunities to act in sales, leasing, and property development.
Fast formula for investor services
So how can you build a local network of investors and then keep them as property clients for the long term? There is a fast formula here to create. Think about these things:
Market rental updates – Rental changes will happen in precincts, property types, and particular buildings. Stay ahead of those rental changes and chart the gross and net rents for the asset classes.
Supply and demand assessments of the local area – Why are businesses and people moving in and out of an area when it comes to business operations? Look at the historic supply of land and property, and then do some projections in looking at the next 5 years. There will be some property redundancies and new developments to work with if you delve deeply enough. Research your property market comprehensively for both supply and demand and tell your clients what is expected to happen locally.
Regional zoning changes – Pressures of the community, the environment, and local business growth will create situations of zoning change. Roads and local transport activity will also create that change. Stay ahead of zoning activity at the local property planning authority. A simple zoning change will likely create business movement. Look at that factor for listing and commission development. Get copies of the local zoning maps so you can see what property changes are possible in locations. Show your clients the local zoning maps and keep them appraised of what developments are coming up on the ‘investment horizon’.
Tenant movements in and from local buildings – When you know the tenants that are moving locally, you are of real value to the property investors that you serve. Market your professional services on the basis of tenant movement and coverage.
All of this says that you should have a precinct focus for new business and investment service. Don’t spread yourself too far as a property expert; you simply cannot cover every location and property type and then be aware of what is happening in rents, sales, and the supply and demand for the zone.
Be the specialist for the location, and on that basis you will be far more useful to the investors that you serve. It’s not ‘rocket science’. Keep things simple in commercial real estate brokerage and understand how you can serve the investors locally.
Understand your current levels of earnings as they apply to sales and leasing activity. Compare those numbers to the industry averages for your town or city and within your industry, and then identify some real ways to improve commission growth. Commercial real estate success is really all about planning and action implementation. You cannot be complacent as an agent or broker.
Check out the level of competition in your location so that you can understand the people that you will be pitching against when it comes to new listings and client relationships. On average, there will always be a small selection of top agents converting business successfully in your town or city.
Most of the other agents locally will be ‘typically’ average when it comes to business activity. Look at their strengths and weaknesses to see how you can learn the right strategies and skills. Improve your skills and improve your position.
So your target or goal should be to reach the levels of a top agent for your location controlling your own client base and your listing activity.
Exclusive listings are the way to achieve that momentum. Your marketing processes should be considered accordingly so that you are perceived as the property ‘expert’ for the area, and the person that can convert most of the enquiry at the right time. You will need exclusive listings to do that, so refine and improve your listing pitch accordingly. Why should a client list their property with you ‘exclusively’? You must have a good answer that is relevant to your clients.
Costs versus Income
Each year you should be looking for ways to increase your gross income whilst maintaining levels of control on your costs of sale or listing. The costs that you will normally be carrying professionally in your career will typically include:
some personal marketing activities
Internet related fees
Many agents and brokers operate under different business models including those that apply to a franchise situation, an independent operator, and/or a salary based professional as part of a brokerage team. It doesn’t really matter what business model you choose to work to, but it does matter that you are suitably rewarded for the transactions that you create and the commissions that you convert.
The expenses listed above will easily consume a lot of commission before you really get started in your business activities and ‘break-even’ so develop a plan to take yourself forward.
THE INCOME FACTS: Look at the listings that you have currently to determine the average level of commission per sales and lease transaction. Smaller transactions are generally a lot of work, and they can consume a lot of your time. Choose the types of listings of suitable size that can help your real estate business thrive and grow over time.
REPEAT BUSINESS AND REFERRALS: There will be opportunities for referral business after each and every transaction, and with every client and prospect relationship. Ask the referral questions at the right time so that you can grow good client-based relationships with VIP clients.
YOUR BEST CLIENTS: Understand exactly what VIP client should be to you by profile, location, and property ownership. When you know what a VIP client is, you can target your prospecting within the town or city.
CLIENT CHALLENGES: Some of your clients will have ongoing property needs. Make sure that you are connecting with them frequently and directly so that you can understand where the next property challenge will evolve. Constant contact will help you build those relationships as an industry professional.
HONE YOUR PROPERTY FOCUS: Target particular properties that you believe will have a good chance of creating local industry activity and sales and leasing results as the case may be. It can take months if not years to break into a particular client or property ownership structure. Be prepared to make the right connections and grow your business relationships strongly and specifically.
BUILD YOUR LIST: Your database should be personally established and regularly updated. If you want to thrive as an agent or a broker in your location, then your database will be at the centre of the process. The people that you talk to, your prospects, and your clients will all feature within your database for particular ongoing contact and professional support.
If you want to get anywhere in commercial real estate brokerage, you will need good clients and plenty of them. Those clients should be assessed for long term value and opportunity. Then you will have to make some choices as to who and how you will work with those clients. It’s a simple and yet important equation to watch and shape.
Some clients will transact commercial real estate many times over a period of years
Some clients will need varied services to stabilize and improve their portfolios over time
When you consider the different prospects and clients that you can work with, the value of their property and business will vary
Commissions will vary between property and client types
Some of the people that you deal with will be more realistic than others when it comes to marketing, inspecting, and negotiating. A degree of conditioning will always be required to move most deals ahead.
Establish Your Client System
If you take these issues and work with them, soon you will move into some facts and key decisions regards clients. I like to look at things this way:
You can systemize your contact cycles – if you have different client types and levels in your database, you can devote different levels of contact and service. That is where your VIP clients and your database become really important.
Think regional and think local – there are always two levels of business to tap into. The local people that are looking for local property, and the regional people looking to move into the area. You should have a marketing process for both.
When you focus all your business efforts on clients, the commercial real estate market place makes a lot more sense. You can find the leads and the commission opportunities faster and more directly; in some cases, you will avoid the threat of competition in converting the listing. Are you ready to build your real estate business?