As any public relations expert will tell you, visibility is the name of the game in marketing. In the words of Stephen Tyrrell, CCIM, an investment specialist with Grubb & Ellis Company in Sacramento, California, "The more visible you become, the more deals you get."
Sheldon Good, CCIM, president of Sheldon Good & Company International in Chicago, puts it somewhat more pithily. "My quoted line for years," he quips, "has been, ‘You’ve got to circulate to percolate. You’ve got to make contacts to make contracts.’ "
Today’s commercial real estate professionals have ample marketing options to get their names out. In addition to tried and true methods such as advertising and promotional efforts, direct mail, and designations, brokers also can take steps including networking at organization meetings, picking up leads from residential brokers, and taking their marketing endeavors international.
Most commercial real estate professionals recognize the truth of the "circulate to percolate" mantra, though not all follow the advice. Tyrrell says he constantly is surprised by the failure of industry colleagues to attend professional functions. Referring to a recent presentation by a major local investor, he says, "I’ll look around the room and see that 90 percent of my colleagues aren’t there."
Tyrrell goes to everything from networking forums where brokers exchange information about listings to monthly luncheons of real estate and business organizations to regional conferences. He also speaks several times a year at these types of events. "It takes a lot of energy to go out, but if you want those deals, you have to do it," he advises.
It’s neither possible nor profitable to attend all professional functions in your area, so the key is target marketing: Find out which groups are geared toward the clients you are pursuing. For instance, if you are building a stable of corporate clients, local chapters of national professional business associations might be where you’ll meet these movers and shakers. Consider your market first, then peruse the pages of the business section of your local newspaper for meeting opportunities.
Even commercial brokers who make themselves seen around town often fail to make themselves visible in a wide enough realm. For example, a common mistake is to limit visibility to the commercial side of the industry. A rich but often overlooked source of leads, especially for small properties, is residential brokers, according to Kenneth Li, CCIM, broker/owner of the commercial division of Century 21 Southwest in Houston.
Li says he regularly exchanges leads with agents in the residential side of his firm, who are coached to ask all of their clients whether the homebuyer has considered the benefits of commercial investment. Assuring clients of their ability to take such a step is the most important part of the presentation, he says. To make this work, Li emphasizes, commercial agents must instruct their residential counterparts in the basics of commercial investment. "They need to be able to explain how someone with their income could afford to invest," he says.
Between 10 percent and 20 percent of homebuyers talk with one of the firm’s commercial agents in person or over the phone; of those, perhaps 20 percent take the step, though sometimes only after a long delay, Li says. Most homebuyers never think about property investment until the idea is presented to them, he adds. Li says if he worked in an agency without a residential component, he would seek out contacts in other firms.
According to Michael Whittemore, CCIM, owner of Trident Pacific Real Estate in Coronado, California, homeowners can be excellent candidates for investment purchases of small rental properties. Many, he says, are unaware of the advantages of investing. By exchanging information with residential brokers, Whittemore says he is better able to get the word out to this pool of potential investors and increase his client base.
Today, visibility need not be limited to local or even national markets. Globalization is a reality and opportunities to participate exist for brokers at all levels. Clearly brokers who work for national or international firms have the advantage, but others need not be left out.
According to Good, the best way to make international connections is through participation in associations such as FIABCI, the French acronym for the International Real Estate Federation, of which he is a past president. Good also led trade missions to Berlin, India, and South America, which provided him with additional foreign contacts. Many local and regional governments send trade missions and generally include local business representatives in their parties.
Thanks to his high profile, Good and his firm are considered sources of expert information on commercial investment real estate. Publications with international readerships such as the New York Times and Wall Street Journal frequently interview members of the firm.
Most professionals may not make it into such prestigious publications, but more modest outlets may be accessible. Many business and fraternal organizations have international memberships and publish magazines or newsletters with worldwide distribution. Getting into the news sections, contributing articles, or simply placing advertisements can, over time, produce contacts in other countries. Attending overseas conferences and trade shows, such as MIPIM, the International Property Market held each March in Cannes, France, can do the same.
Placing property ads in foreign newspapers is a simple but often ignored way of finding foreign investors. Doing this effectively, however, requires research into both the appropriate media and the investment patterns of the country or region in question.
Probably the simplest route to foreign contacts involves establishing a presence on the Internet and searching the World Wide Web for leads. The 24-hour nature of electronic networking dissolves time barriers and lets you zero in on specific requests for information. You can contact people in any corner of the world in a matter of minutes through e-mail, download or upload property information, and conduct negotiations without ever leaving the office. (See "Making Technology Work for You," CIREJ, November/December 1997.)
Advertising and Promotion
With the advent of Internet marketing, conventional forms of advertising may diminish in importance. Don Neal, CCIM, a broker with Beck Property Company in Pensacola, Florida, and Tom Hill III, CCIM, president of Tom Hill Realty & Investment in Waterbury, Connecticut, both report they have abandoned newspaper advertisements entirely. "These days I use only the [World Wide] Web," says Hill. "I’m tired of spending a ton of money in a lot of different newspapers and getting mostly unqualified responses."
Nonetheless, for most of the industry, traditional media still play a significant role. Good, for example, estimates his firm spends $2 million a year on print and radio advertising.
A significant shift in attitude toward advertising and promotion has occurred in the last few years. Many commercial real estate professionals are adopting innovative methods, often borrowed from the residential sector.
Beck Property Company has contracted to have a movable billboard message displayed alongside Pensacola roadways. Emblazoned with the company logo and the slogan "We Make Deals Happen!" the billboard message remains in place for 90 days and then moves to another location. The panel costs between $700 and $800 a month to maintain, according to Neal. It has not been up long enough, he adds, to evaluate its effectiveness, but he believes it will give Beck a leg up on the competition by attracting the attention of the business community. "It is designed to increase the company’s name recognition within the community and to produce incoming calls," Neal says.
Noting that the Florida lifestyle promotes a less formal approach to business, Neal says Beck probably is more willing than most to experiment with novel marketing tactics. For example, agents are welcome to wear Beck Property golf shirts as casual business attire. "One or more of us," he comments, "is always wearing one."
Others across the country also are willing to try new marketing methods. Hill reports his New England firm gives out promotional T-shirts. While agents are not likely to show up in one to an appointment with an important investor, they do wear them around town during off hours.
Jeffrey S. Weil, CCIM, SIOR, a senior vice president in the Walnut Creek, California, office of Grubb & Ellis, reports that his office has borrowed a technique from the residential sector—holding several open houses—though they work only for new or redeveloped buildings with no tenants. "They would be somewhat disruptive in an occupied building," he says.
Weil describes a recent open house he held for a 90,000-square-foot property. Scheduled for midday, the affair was catered so other brokers could combine a free lunch with touring the building. "We wanted to create a presence and make it conducive for brokers to take time out to see property," he explains.
Increasingly, newsletters have become an important direct mail tool for both large and small firms. Brokers send them to clients, prospects, and the media to keep them abreast of developments.
Any newsletter’s success hinges largely on content. Simplistic, dated, or irrelevant material leaves a poor impression. For maximum effectiveness, a brokerage newsletter should contain at least three elements: news on significant firm transactions and listings; market commentary; and advice or analysis. The more specific the content is to the audience, the better.
Sources for material are not difficult to find. Whittemore writes his own articles, covering topics such as changes in tax law, simple steps to increase the value of investment properties, and other practical issues that clients can put to use. Other brokers prefer to hire professional writers, at anywhere from $20 to $75 an hour, to translate their ideas into coherent prose. Alternatively, experts from other areas of real estate such as appraisers, loan brokers, or developers may agree to contribute articles in return for the publicity.
Reprinting existing articles is another good source of material. Many trade journals, local business newspapers, and organization bulletins will sell one-time reprint rights to individual articles for a relatively small fee, or even give them for free, provided the material is credited and will not appear in a competing publication or be offered for sale. The publishers of other newsletters likewise may agree to share material, providing you are not a competitor.
The cost of producing and mailing a newsletter varies according to quality, quantity, and the amount of work done in-house, but most professionals believe the results justify the effort and expense, if only because of the additional exposure. "If you get your name and face in front of people long enough and often enough, it will begin to register," says Whittemore, who reports that clients frequently call in response to something they read in his firm’s newsletter.
Tyrrell, however, says that he suspects the Grubb & Ellis newsletters attract more press attention than client response. Nonetheless, he believes they ultimately help generate business by reinforcing the image of a firm as an authority on commercial real estate.
For small firms and individual practitioners, a simple black-and-white four-page newsletter is likely to suffice. Reproduced at a copy shop on a laser printer, folded for mailing, and addressed, it costs about 35 cents to 45 cents per page. Adding in postage, printing and mailing 100 copies would run about $200. Design and writing services bring additional costs if not done in-house.
As the quality, size, and mailing list increases, so does the price. For example, Neal’s firm produces an eight-page color newsletter that it sends to 15,000 clients and businesses every four to five months. The cost of a mailing like this can range from $7,500 to $10,000. The actual cost depends on a number of factors, including paper quality, finished size, binding method, number of photographs, and the form in which the material is provided to the typesetter or printer. Mailing alone could run $2,000, depending on the stock.
For very small operations, or for brokers interested in a more-personal connection with clients, a simple letter discussing current market conditions may prove an effective alternative to a full-blown newsletter.
Regardless of how aggressive an approach you take to marketing, there is little question that designations boost credibility. For instance, other commercial real estate professionals recognize the value of a designation such as CCIM and often favor fellow designees when looking for properties or buyers outside their area. "I’m going to turn to the CCIM in the region I’m interested in who I know has the expertise," says Elizabeth Sink, CCIM, owner of Sink & Company in Avon, Colorado.
Another plus is being able to take advantage of the marketing and networking framework provided by the national organization that confers the designation.
At the same time, brokers stress that designations and affiliations enhance marketing efforts, but they do not substitute for them. Similarly, Weil points out, no amount of fancy brochures, newsletters, or high-tech gadgetry can substitute for one-to-one interactions.
"No matter what, it still breaks down to personal relationships," he says. "It’s the people who count. That has been and will always be the backbone of success in this business.