Brokerage

Prospecting 101

Master the basics of finding new clients.

One common thread links the newest CCIM candidate to the most seasoned commercial real estate veteran: the need to acquire new clients and maintain existing relationships. Without clients, you don’t have a business, so prospecting is the lifeblood of any brokerage firm. And the most effective way to turn prospects into clients is to pick up the phone and have a conversation with them.

The brokerage business has a three-part cycle: You enter the business cycle by going to the market to find prospects with whom to do business. Once you have found a prospect, you analyze their needs, make a presentation, and win the right to represent them. Of course, winning the business isn’t enough, since you also need to fulfill the assignment and close the deal.

All these steps are important, but many brokers place their emphasis on the win and fulfill stages. To keep your brokerage pipeline healthy, you need to always keep re-entering the cycle by finding new prospects. This keeps all three buckets in your brokerage continuum full.

Building a Prospect List

Before you pick up the phone, develop a solid strategy based on two essential elements: determining who your prospect is and what you are going to say. You can have the best list in the market, but if you cannot clearly articulate the purpose of your call and the value to your audience, your great list is worthless. Alternately, you can have a silver tongue and deliver consistently, but if your calling list is outdated and not validated, you are not any better off than the broker in the first situation.

Start by defining your target market. Your target market depends on how you see your business. If you’re a tenant representative in a small market, you might need to talk to every office user in the market. But if you’re working in a major metro area, you might focus exclusively on CPA firms that take 10,000 or more square feet of space in class A buildings in the central business district. The more specific you can make your market, the easier it will be to prospect synergistically. However, you also want to have enough opportunity to meet your earnings goals, so don’t make your target market too small.

The next step is to determine whom to call. When building your prospecting database, try to only include the most qualified prospects. Ralph Spencer, CCIM, a principal of Innovative Learning in Orlando, Fla., offers a list of attributes of qualified prospects:

• needs commercial real estate services;

• knows he needs commercial real estate services;

• has the authority to act on his need;

• has the budget to back up his authority;

• feels a sense of urgency to act;

• knows your company and has had a positive experience in the past;

• knows you and likes and trusts you; and

• is willing to follow your guidance.

The more attributes that a person has, the more qualified as a lead they are for you. A prospect with the first couple of attributes is worth talking to, but a prospect that will take your guidance is practically a guaranteed client.

Formulating Your Pitch

Once you’ve identified your prospects, research what would interest them. This last step is often forgotten. Determining a prospect’s issues gives you a good reason to call and move the relationship forward. Learning about them, their companies, and their real estate needs can help you to have a more pointed conversation that is more likely to lead to a face-to-face meeting.

Two popular research sources for company information are Hoover’s and LexisNexis. Hoover’s “First Research” product provides good insight and suggested questions for key decision makers. For more direct research, leveraging an online assistant such as Elance or Guru allows you to delegate your research activities.

In looking for discussion topics, don’t focus on the usual transactional indicators such as lease expirations. Pay attention to bigger business issues. This is the No. 1 mistake brokers make — focusing too much on lease terms and too little on the business issues. Business issues drive real estate decisions. Real estate issues generally don’t drive business decisions. For example, if you learn that a company has just acquired a competitor, you can assume its space needs will probably change and it will need brokerage services, regardless of whether or not its leases are scheduled to roll over.

If, for some reason you can’t find a specific topic in your research, call for other substantive reasons. These may include:

• a recent lease or sale that you successfully completed at a nearby or related property;

• a listing of yours that is of interest to the prospect; or

• a shared social networking connection with the prospect, such as being a member of the same LinkedIn Group.

While engaged in a discussion with the prospect, focus on the issues critical to the prospect. Remember everyone’s favorite radio station — and I mean everyone’s — is WIFM: What’s in it for me? Focusing on your prospect’s needs will set you apart from the average broker who is simply trying to sell services. Critical issues can revolve around building space, budgets, the industry, or more specific items such as changes in the prospect’s employee staff size.

Making the Call

Once you have finished preparing, generate a call list so you can sit down and do your prospecting in one block of time. As you go through your call list and contact your prospects, remember the reason that you are calling — to get the prospect to sit down with you.

In response to your call, prospects can give you one of the five reactions discussed below.

If the client says yes, book the meeting and end the call as quickly as possible. Send a confirmation via email and, if the meeting is more than one week out, send additional information between your call and the appointment that adds value. For example, if you are meeting to discuss a lease, send a client testimonial regarding a lease you just renewed or a tenant you successfully relocated.

When the prospect says no, try to find an area of interest that you can use to book a meeting. Remember the cardinal rule of WIFM. Use your research to address possible business issues the prospect is facing, or share what their competitors are doing in the market. Also, if the prospect is rude or hurried, consider that you may have called at a bad time. In that case, call back in one to three months.

When the client asks you to send information, consider offering to send it as long as they agree to have another conversation with you to discuss it. You can send the information without such a commitment, but inevitably you will end up chasing the prospect for weeks if not months.

If you find out that you have the wrong person, ask who the correct decision maker is or go back and re-research your contact information.

If the prospect isn’t interested in meeting with you, find out why. If the timing isn’t right for them, attempt to get a sense of a better time to call. This is also an excellent opportunity for you to re-examine the value proposition that you’re presenting on the phone. If it’s not compelling, you probably will get a lot of uninterested responses. Sharpen your pitch and call them back in one to three months.

Evaluating Your Performance

The most important thing about any prospect call is to evaluate each call when it is over. Record your notes from the call in your database, but also take the time to record what you did well and where you can use some improvement. Again, it’s not about the quantity of calls you make, it’s about the quantity of targeted, quality calls that you make.

As you prospect, remember that persistence is key. If you don’t get someone on the phone, leave them a voicemail message, then leave another if they don’t respond to the first one. If you send out a blast email, send out another one the next month. When a prospect turns you down, try again and respectfully give them another reason that a meeting would be valuable for them.

I have captured numerous opportunities based on my persistence. True, there is a fine line between persistence and annoyance, but very few of us ever get near this line. We quit much too early. If you have never been called a pain, then it’s highly likely you aren’t calling as much as you should.

Every phone call you make brings you closer to your ultimate goal of winning assignments and fulfilling them. Every contact you have with a prospect increases your likelihood of securing that meeting, and that is what prospecting is all about. Ultimately, prospecting is one of the key factors in building a successful brokerage business.

Rod Santomassimo, CCIM, is president and founder of the Massimo Group, a commercial real estate brokerage coaching and consulting firm, and author of Amazon.com’s No. 1-rated commercial real estate book, Brokers Who Dominate: Eight Traits of Top Producers. Contact him at www.massimo-group.com.

CCIM Strategies for Making Contact

Phone calls aren’t the only way to prospect. Many real estate professionals also have success leveraging the power of the CCIM designation and CCIM networking opportunities.

“Referrals are the absolute best way to connect with others,” says Lee Y. Wheeler III, CCIM, president of NAI Wheeler in Beaumont, Texas. He utilizes contacts made through social media, local networking, and past clients to gain personal introductions to potential new clients. “The CCIM designation alone helps tremendously as it adds credibility to anything I do,” he says. “And by educating those who refer me on what CCIM means, it allows them to refer me better.”

“I use the events sponsored by my local CCIM chapter to engage with many different decision makers,” says Ira Korn, CCIM, managing director and partner at Coldwell Banker Commercial Meridian in Rochester, N.Y. “I find that people are generally more relaxed and open to making new acquaintances.” Attendees are also a great source of market information, he adds. “Recently I explored the purchase of a value-add opportunity located near a new development done by a CCIM. Our conversation gave me a better grasp of the marketplace and local politics, and allowed me to more accurately value this particular asset.”

Derek J. Doke, CCIM, agrees. “There isn’t anything better than a good face-to-face networking event,” says the managing broker and senior asset manager at Barclay’s Realty & Management Co. in Kirkland, Wash. After meeting a fellow Washington State CCIM Chapter member at a chapter-sponsored deal-making session, “we negotiated a $1.4 million land transaction within 30 days that closed shortly thereafter.”

Doke also makes a point to connect with decision makers outside of commercial real estate. “It’s important to get out from behind your desk and mingle with other professionals. I receive leads from doctors, accountants, financial advisers, teachers, fellow tennis players, and a host of others,” he says. He leverages his past experience as a former international tax specialist not only to make connections, but also to educate and instill confidence in clients, something that many CCIMs can do, given their depth of experience. “Most if not all CCIMs bring much to the table aside from their CCIM credentials,” he says. — Sara Drummond, executive editor of Commercial Investment Real Estate

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