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.
When you work in commercial property sales you will soon know the pressures of the day, the listings that you work with, your clients, and the prevailing property market. There are lots of things that can distract or divert you into many different activities. That diversion can lead to a loss of listing opportunity and ultimately commissions.
In investment sales your main focus should always be on:
Prospecting for new business
Clients currently served
Listings on your books now
Inspections of listings
Negotiations of property offers
Documentation of listings, sales, and contracts
Followup of transactions
You could add other items to this list given your location and client base. The fact of the matter is that you will always be busy in commercial real estate brokerage. There are plenty of things to do. Systems and factors of focus will help you get through the working day and the week. Always track your progress in what you are doing, so you can see where improvements are required.
In this audio program, John Highman talks about setting the right priorities in your real estate business and how that will help you with sales and listing results.
Those clients that fail to adjust to market circumstances deserve what they get (or fail to get). The best clients will always listen to market circumstances and allow their agent to refresh the property and push on with other marketing and pricing ideas.
A Brokers Job
Our job is to match the strengths of the property listing into the market conditions and make things happen. It is also our job to resolve the weaknesses that may be present in the property so results can happen with inquiries, inspections, or offers. There are some real skills to be tuned and developed there.
In this audio program, John Highman talks about the ways that you can and should approach those difficult commercial property listings to get better results.
A sales team in commercial real estate brokerage is typically (or should be) a group of like minded sales professionals in control of their market, their clients, the territory and their special property types. When you look into the team there are special indicators to watch and track as the team gets results in listings, clients, commissions, and referrals.
Commercial property today is as competitive as ever; top sales teams should be working to a plan and strategy for their location. The real estate ‘year’ is most commonly between February and November each year. Most of the sales and leasing transactions will be done in just those 10 months.
In this audio program, John Highman talks about the importance of tracking and monitoring the performance of the sales team.
In commercial real estate brokerage today develop a personal focus on performance relative to your location and property specialities. When you focus in this way, you can develop some real momentum and levels of outcome in both listings and commissions.
The agents the struggle in the industry are those that generally do not know where they are currently when it comes to industry based performance. That is a problem but it can be easily fixed.
Top Agent Focus
The top agents of the market understand exactly how they have performed over recent time when it comes to:
Listing Activities within their specialized property type – you cannot be a specialist across every property type and location so determine the things that you can get some results and listings from in the local area.
Commissions per listing – when you drill down into the commissions per listing you will soon see levels of quality that can be improved on a listing by listing basis. Good quality listings will always move faster and the time on market will be shorter.
Commissions per transaction – you can split your transactions into sales and leasing activity. You will then see the levels of activity created from each transaction and then you can assess the size of the transaction taking into account the amount of effort required in the marketing and the negotiating. Selective listing activities will help you improve commissions per transaction.
Listings per location – assess your current listings on a precinct and locational basis. Do you have a good sure of listings in the prime precincts and areas where people are making most of the property enquiry? You may need to adjust your property prospecting activities to convert more listings per location. The best locations will always create better levels of enquiry and that has a direct flow through into levels of inspection, frequency of negotiation, and database size.
Commissions relative to database size and activity – review your current database for both size and relevance. Also consider the accuracy of the information contained within the database. If you are struggling in the market today when it comes to new business opportunities, then it is time to look at your client list and your prospecting activities. The database will be at the centre of that assessment and review process.
Referral business opportunity – from your recent successful transactions the referral question should have been asked and encouraged. It is reasonably easy to reach out into new market segments and property opportunity through a deliberate and direct referral strategy. Your VIP clients should be at the centre of your referral business and referral questions.
VIP clients – understand exactly who your VIP clients are today and why you should consider them for future business opportunity. Segment those VIP clients into levels of activity, location, financial capability, and timing. You should be connecting with the VIP clients more frequently and directly as part of your prospecting model.
Competing agents and brokers locally – an assessment of competing agents locally will help you re-position yourself into the market segments that are underserviced or offer the best opportunity. As part of your professional business plan is a commercial real estate agent or broker, make some deliberate choices when it comes to personal marketing processes and strategies in and around your competing agents.
Be a Problem Solver – make it easy to your clients and prospects to see that you are the agent of choice when it comes to solving a property problem in a timely and direct way. When you have a successful transaction, be that in sales or leasing, spread the word about your success and the results achieved for your clients. Get some success letters into the location with a particular focus on property investors and local business owners.
From the list mentioned, it is easy to see that commercial real estate brokerage business is all about assessing the numbers and developing appropriate levels of personal improvement.
In a commercial real estate team, you cannot have negativity in any way or form. Individual agents performing poorly can easily influence the activities of others simply through sharing their negativity in the office and during sales meetings.
If this is a problem for you, the particular team member will need to be personally managed and redirected to solve their listings slump or commission problem. If the problem cannot be solved quickly, the person should be removed from the team.
It is a fact that most under-performing agents in any property market will have created the problem for themselves through lack of planning, a lack of action and poor focus. Training and skill development can help redirect those agents back to the important tasks and industry standards to build the business. That being said, any agent or broker with a negative attitude needs to be willing to learn and improve under the pressures of poor performance. That is where the leadership skills of the sales manager or team leader become very relevant.
Here are some good ways to control and remove negativity within the real estate agency team:
Whilst the property market will have variations of enquiry and seasonal change, there will be listings to attract, properties to market, and deals to negotiate. The attitude of the team and the actions of individual people within the team should be encouraged and promoted to a high level. You can do that through regular role playing, team meetings, and industry updates. Every sales meeting should be a positive event encouraging feedback from every team members and discussing market opportunity; high performing team members can be encouraged to share their experiences with others. The story of success goes a long way towards building ideas and momentum across the team.
Agents and brokers that are struggling with any part of their business may need to work with high performing agents for a period of time to experience and see the successful ways of working in the industry. Whilst every top agent or broker will do things differently, it is the advantage of a personal system that takes them forward; their system takes them into the opportunities of the property market in sales, leasing, and property management.
Every broker or agent should have a specific business plan relating to personal performance, territory management, prospecting, and new business focus. The plan should set the momentum for the financial year and be tracked on a monthly basis. It is unfortunately common to see agents create their plan for the year and then forget about the document and its application from that point onwards. Top performing agents structure a plan based on their skills, the property market, the location, and the identified opportunities of the property segment. In the case of top agents, that plan will be formulated prior to the beginning of the financial year and will be pursued vigorously each week and each month through the year. Adjustments will be made by the agent when necessary to ensure that growth of listings and commissions occur efficiently and directly in any property market.
On a weekly basis, every agent and broker should be tracking their results when it comes to essential activities such as cold call prospecting, meetings, listings, negotiations, and commissions. The best way for them to track the results will be through a chart or graphing process. That information can then be shared with the team leader, and on that basis by compared across the team. The team leader can then see areas of poor performance in agents that are struggling with certain segments of property activity. In identifying problems early, it is easy for the team leader to provide the necessary guidance and professional training. For
So the message here is that any negativity can be removed from a commercial real estate brokerage team through direct action and close monitoring. The skills of the team leader will have a lot to do with the results achieved.
In commercial real estate brokerage, the use of prospecting letters will help boost your networking and new business efforts. New clients and listings can be generated by a good prospecting letter system. That being said, it is not just a matter of sending letters and hoping that results will occur; you need to develop a real logic to the process. You should also follow up the letters with a telephone call whenever possible.
Why would you send these letters? In most cases it is to achieve one if not all of the following:
More Sellers as listing prospects
More Landlords for leasing services
Better enquiries from the market
Buyers and tenants for your listings
Establish your brand as an industry expert
Looking at these things very simply, it is essential that you design your prospecting letters in separate ways for the market that you want to tap into; understand the new business that you are looking to attract back to you. Write your letter accordingly.
Here are some rules to creating a marketing system of letters for commercial real estate brokerage:
The letter process is a repeated system. In each period of 12 months the letters should be sent every 2 or 3 months. Each letter sent should have a separate message and theme.
Understand the ‘pain factors’ that apply to the market today and reach into those issues as part of the letter layout and message. Establish your brokerage as the ‘solution’ for all the pain and discomfort that a landlord or property owner could be experiencing.
Focus on listing stock. When you control the listings you control the market. Exclusive listings should be part of your proposal and presentation process.
Any of your competitors listings will be a trigger for prospecting letters in the same location. Any other property owners looking to sell or lease may like to compete with the other property.
Write ‘success letters’ for every sale or lease that you achieve. Send them into the immediate vicinity of the successful transaction.
Follow up all letters with a telephone call whenever you can. The personal approach is really important to conversions.
Purchase a good book on ‘copyrighting’ and ‘words or phrases that sell’. These simple books are invaluable when it comes to attracting the eye of the reader in your message.
Your marketing letters should be simple and composed over 3 or 4 paragraphs on one page only. Enclose your business card with each letter. Make it easy for people to get back to you.
If you want more listings in commercial real estate brokerage today, this strategy of sending prospecting letters really does work beyond the all too convenient ‘email’ strategy used by many. Most agents only rely on emails for prospecting communication; in those situations the client or prospect will usually not even read the content. The ‘delete’ button is all too convenient.
In commercial real estate from time to time, you will get a slump in sales. That will come from a variety of challenges and market changes. When that occurs, it is important that you adjust your prospecting processes and market focus.
A slump in sales is a reason to shift your personal business practices and market segments. If the sales activity is genuinely slower for a long time, then you should start to look at the alternatives of helping landlords with leasing activity in the local area. Invariably you will find that a new commission opportunity still exists, albeit in a different way.
Here are some rules that should apply to the changing market conditions and a personal slump in sales:
A slump will only continue if you fail to adjust your prospecting and business efforts. In many respects, the downturn may have been created through a lack of personal prospecting and client connection. It is easy to stop prospecting when you have plenty of business on the go. That is the most common problem we see when it comes to this type of industry downturn.
Review your activities when it comes to new business generation. Take a serious look at your database to ascertain that it is up to date and accurate in every respect. If your database is lacking in any way, it will require immediate attention and that will involve plenty of phone calls talking to those people that you have overlooked or not connected with recently.
Talk to all of the clients that you have serviced over the last five years. It is a known fact that property owners and investors work to a cycle of ownership and disposal. Many property owners will act on a property decision or transaction once every 5 to 7 years. That is why the cycle of contact is so important to the business that we generate.
Ask for referrals from the clients and the prospects that you know. This is the easiest relationship building process available to us.
Get back into your sales territory and the streets that contain the quality properties. Door-knock the local businesses to introduce yourself and question them about their current property needs and activities. Most business owners and proprietors will know a lot more about their immediate local property market than you do. They are likely to share some of that information that can lead to some good leads and other connections.
Look for any new property developments and any rezoning applications. You can get this information from the local planning office. Whilst some of these transactions take months if not years to come to fruition, you can position yourself to help those property owners impacted by the changes.
Lift your presence on the Internet through social media activity and also specific property blogging activity. Show the online world that you are a real expert when it comes to the property type and the location.
To get over a slump in sales activity, it is simply a matter of changing your focus and your business habits. Put yourself back into a prospecting mindset and reconnect with the market in every way possible.
In this property market, you really do need to have a business plan when it comes to your personal commissions and listing opportunity. You need to set some benchmarks that can take your commercial real estate agency career forward through growth and opportunity.
For many salespeople and agents the process of business planning is relatively detailed and boring. It is not unusual to find many business plans created by commercial real estate agents and then overlooked. Perhaps the process requires a different name to help the acceptance that it requires as a critical part of the agency process.
I like to call the business planning process that of ‘strategic growth’. It infers that the matter is important and that it offers opportunity for the agent and the agency. On that basis you have a real reason to establish the plan and implement its momentum. It is a very personal process and cannot be delegated to anyone else.
So what do you need to improve your market share and your income over time? Here are some points of focus for you:
A good database of quality clients
A source of future opportunity in sales and leasing activity
Dominant market share
Exceptional skills when it comes to marketing, presentations, negotiating, and inspecting
The knowledge to do the job at a high level with accuracy and relevance
To achieve these very important goals, you need to research the right information and make some key decisions. Here are some ideas to help you get started:
Understand the local property market and its activities over the last few years. Will the property market be changing over the next four or five years? That being the case, can you service that change? Will you require further information and knowledge? Will the change give you some opportunity in sales or leasing activity?
Look at the upcoming opportunities in the market and the growth potential of the business and community segments. Can you service those growth segments and in what way?
Assess the competitors that you will be working against when it comes to new listings. Are there any competitors that will present you with challenges when it comes to market share? What can you do to be different and better than those competitors?
Understand the role that technology and marketing plays in the local area when it comes to new listings. Can you bring anything new and fresh by way of technology and marketing to your listings?
Your property location and market share is likely to show some trends and have relevant indicators when it comes to average deal size and average deal type. That will then drive a commission average from every transaction. How many transactions will you need to make from your target market segment on an annual basis to achieve your income? Is there business available for you in that segment, and how would you tap into it? What can you do that is different when it comes to building your market share?
Taking all of these things into account, you really do need a business plan or a strategic plan to take your listing and commission opportunity forward. In an average calendar or financial year, you have approximately 10 months of listing and deal opportunity. The rest of the time will be absorbed in community festivities and school holidays. For this very reason, your plan is critical to your progress and success in the industry as an agent. Focus your efforts in that 10 months of time so that you can build a pipeline of solid income and client growth in commercial real estate.
When it comes to your career in commercial real estate today, consistency is a key component to help you to progress in the industry. Without consistency, chaos is usually the result. Poor performance then follows as well as lower income or commissions.
Given that most salespeople work on some form of commission reward system, results will always be high on the agenda when it comes to personal performance. Every day contributes towards the future.
Here are some of the biggest hurdles that we find with salespeople in the industry:
Lack of focus on prospecting
The listings that are poorly served
A database that is not up to date
Client connection and communication systems that are random at best
Generic marketing systems that produce little momentum towards enquiry
These issues should not occur. If we are to achieve more momentum in the industry, then results are really important to us and the agency we work for. This then says that we should be very consistent in what we do every day.
Systems can take us forward in generating new business, serving the clients that we act for, and dominating the local commercial real estate market. Systems are a personal thing.
Here are some ideas to help you with consistency and building the correct momentum in commercial real estate today.
Start the day early with a planning process to connect to the right people that can help you move your business or listings forward. This will usually mean a prospecting process. In commercial real estate today, it is really easy to make prospecting calls the first thing every morning. Systemised action is the only thing that makes any difference in our industry. Everything else is pure luck. Luck is not a good thing when you work on commission; directed control will get you a lot further and faster.
After you have completed your daily prospecting process, connect with all your clients to update them on recent marketing activities and property enquiry. Clients with exclusive listings should receive a priority in all communications and follow-up.
Develop your skills so that you can convert more listings to your exclusive control. Open listings in our industry are really a waste of time, over which you have no control. Exclusive listings allow you to focus your marketing efforts, and control the enquiry that comes towards you. In this way you have a much better chance of converting the business. If you are finding it difficult to convert exclusive listings, then you probably need some skill upgrade, and the only way you can do that is through practice. Find some good books on pitching and presenting, and learn the best ways to go about it relative to your area and property type.
Are you the best commercial real estate agent locally? Hopefully you have answered yes. Develop some real reasons and points of difference for your uniqueness in the local property market. Why should people use you? How can you provide the best service over quality listings? Develop some real answers that can help you drive your market share and listing conversions. Generic answers are a waste of time. Far too many agents use generic and bland statements relating to experience, time in the industry, and agency profile. Develop your answers that are far more significant than these generic statements.
It is not hard to see how you can improve your commercial real estate career and listing conversions. It all comes down to your personal systems and focus. Start taking some real action.
When you work as an agent in commercial real estate, it pays to understand where you are going and where you have been in relation to commissions and listings. In only that way can you tap into the better ideas and changes that will help you get more market share.
The property market is always changing, both seasonally and economically. Planning for those seasons and changes will help you find the sections of the market that are really active (or potentially so).
Gone are the days of waiting for a call or a prospect to walk in the door of your office to seek your help. There are far too many agents around for that to be of any benefit to you. In this property market you must:
Prospect every day via the telephone (this is a critical habit in our industry)
Call into businesses in your area to introduce yourself and your services
Reconnect with old clients that you helped with other transactions over the years
Watch the time on market of your listings so you know when changes are required to freshen the listing
Track the other agents listings to see if you can help those property owners when the listings expire
Market every listing that you have personally into all the adjacent businesses and property investors
It should be said that you cannot advertise a property in the newspaper or internet and hope that a deal will be forthcoming. The only listings that should get the ‘random’ service approach are the ‘open’ listings in your books. Exclusive listings are to be given priority marketing. When you control your market through ‘exclusive listings’, you control your progress and market share.
The industry is all about people and how we connect with them. Rarely will you win commercial real estate business from people that have only just met you for the first time. Relationships are the key and your ratios of meetings and calls will help you understand just where those ratios are improving or could improve.
So here are the key ratios to track in your team and for yourself as a property expert:
What is the average commission that is paid per transaction? This information will help you understand the quality factors that apply to your existing listings. In many cases, salespeople just need to lift their listing quality to get more commission.
What are your conversion rates between presentations, to listings, to converted and closed transactions? These ratios will help you understand just how you can improve your outcomes. You may have a weakness in presentations, or negotiations; when you find a weakness you seek to improve it through practice.
How many prospecting calls must you make each day to get 2 new listings per week?
Are you closing and completing at least 50% of your listings? If not, then you have a problem and you should look at the client conditioning and your listing negotiation skills.
What is the average time on market for your listings and how does that compare to the other agents and listings in the area?
What is your ratio between exclusive and open listings? You should be listing in the majority exclusively.
You may be able to add to this list, and importantly you do so to keep on top of the market trends and opportunities. The top agents of the market understand just what is going on with local property and how to tap into it at any time.