The Spin Cycle
New marketing twists take the starch out of business-building challenges.
No matter how long commercial real estate professionals have been in the business, the same marketing challenges rise to the surface year after year. Issues such as time management, self-promotion, market visibility, reputation, and cutting through the competition face industry pros in every market.
A little originality and a fresh outlook go a long way toward addressing these common marketing woes. Some CCIMs have found new ways to succeed and break away from the crowd.
Finding New Business in a Saturated Market
“It's all about standing out versus blending in,” says Jasper E. Tramonte, CCIM, president of Tramonte Commercial Brokerage in Houston. Tramonte uses some unique marketing strategies to ensure that everyone in his local area knows his name — especially the lenders that he relies on for obtaining foreclosure properties. Tramonte has found that networking with banks is an effective way to build a pipeline of clients, but it takes some work.
“My greatest marketing challenge today is to get more banks as customers. I track the commercial foreclosure reports, so I want to get on the banks' ‘good' list for my specific market area,” he says. Tramonte networks with bank lenders at the many CCIM get-togethers he attends each year. “At CCIM events, lenders are like sharks waiting for the fish. CCIMs are the ‘crème de la crème' and lenders flock to them,” he says.
After this initial meeting, Tramonte works to establish a good rapport with the lenders. For example, he sends qualified buyers to the banks to get their attention. He also helps out with informal valuations. “I'll do a broker's opinion of value, which is less expensive than a full-blown appraisal,” he says. While not a substitute for a formal appraisal, lenders consider this a favor, Tramonte says.
Sometimes building a relationship with a bank can take years. If things don't seem to be moving along fast enough, Tramonte takes an extra step. “If I have to, I even open up an account at the bank, so now I am a customer. If I do business with them, they should do business with me,” he says.
After establishing a relationship with a bank, Tramonte keeps an eye on foreclosure reports and asks the bank if he can list one or two of the properties. “I only ask for one or two in my area because I wouldn't be able to handle a huge bank's foreclosures,” he says.
Since Tramonte has sent some business the bank's way, he counts on them to reciprocate. “By doing them a favor, they owe me a favor,” he says.
Educating the Client
Since CCIMs are commercial real estate industry experts, they often can provide potential clients with market information or an opinion of value on a property that garners their interest.
The most effective cold calls offer something to the person on the other end of the line. “A sales call should be an educational call. I believe that you need to add value from the start,” says Samuel P. Thomas, CCIM, senior investment adviser for Sperry Van Ness/Tenant Solutions in Boston.
Educating the client includes anything from offering demographic information to quoting local capitalization rates. “Everyone wants to know their property value, even if they are not thinking of selling. Offer to give them a free opinion of value. It builds a relationship and the more you are willing to do without being asked, the better the chances are that the relationship will grow,” Thomas says.
David J. Buurma, CCIM, vice president of BT Commercial Real Estate-NAI in Napa, Calif., also uses his role as a commercial real estate professional to educate clients. “Most clients do not understand the concept of buying and selling based on where the market is going, not where it has been. As agents we must educate them on this before we submit an offer to purchase or list a particular property. If we know our markets and do a good job of educating our clients on the entire story behind recent sales and on the direction of those markets, we have better-informed and happier clients in the end,” Buurma says. And happy clients do business with you again and give referrals.
Between making calls, closing deals, and networking, the life of a broker is a hectic one. “Our greatest marketing challenge is time…just not having enough,” says John M. Crossman, CCIM, principal and senior vice president of Trammell Crow Co. in Orlando, Fla. To find enough time to handle everything, brokers have to achieve balance.
“Almost every broker I know is much more focused on closing a deal at hand today at the potential expense of not feeding the pipeline of future deals to be done tomorrow,” says Todd A. Gold, CCIM, president and managing partner of REOC Partners in San Antonio. It is possible to build up a positive reputation with potential clients while simultaneously closing commercial real estate transactions, but it requires brokers to devise and initiate marketing strategies that include team work.
In Gold's office, brokers are encouraged to pour their energy into deal making, while a team of support staff works on marketing efforts. “Our philosophy embraces that broker characteristic — [they] need to be out making deals while other team members should be doing the heavy lifting on their behalf,” he says.
In his mid-size office, Gold created a director of marketing position and hired a marketing professional. “Our structure enables us to also sell the positive benefits of this added level of service to our potential clients. Brokers need to sell, and the use of a marketing director increases their efficiency and ultimate success,” Gold says.
But even in an office where support staff handles the marketing, brokers still need to play a role in promotional matters. “Brokers need to be engaged in the development of the marketing plan to direct and guide the vision of the effort,” Gold says.
Brokers should stay in the loop. “We have numerous in-house communication initiatives, which are largely newsletter and electronic-oriented,” says Brian P. Hayes, CCIM, director of national business development at Opus North Corp. in Rosemont, Ill. Internal communications help ensure that there is consistency from broker to broker. Opus even has brought in outside consultants to streamline the company's internal communication and message. “We want to be able to look at things that are being done collectively without taking away from the entrepreneurship of the individual brokers,” Hayes says.
The Local Market Advantage
In today's high-tech business environment, demographic and market information is available at buyers' and sellers' fingertips via the Web. How can local real estate pros compete with this resource?
“In order to serve your clients well, you must help them understand the direction of the market; being in the market every day is the only way to know this,” says Buurma, who finds that having brokers who live in the area is an advantage for his brokerage. “For a buyer or seller to make a truly informed decision, they need a complete understanding of all the relevant information,” he says.
For instance, some nonlocal commercial real estate pros use Web resources to gather market information and use it to lure new clients. While they can offer general information, “the only real way to know the actual direction of the market is to participate in that market daily. Internet information is not timely enough to show us market trends in the immediate future, and that is what is really needed,” Buurma says.
For example, in a Santa Rosa, Calif., transaction earlier this year, an Ohio pension fund purchased a multifamily property for $250,000 per unit, which is double the average market price. A broker unfamiliar with the area might not have realized that the purchaser in this case was buying future cash flow, Buurma says. “A local broker would instantly know that this sale does not represent the norm.”
Tramonte also finds that living and operating in the same area is beneficial. He concentrates the majority of his services in a specific corridor between Galveston, Texas, and Clearwater, Texas. In this region his local area knowledge is well known. “Everyone knows me and I know everyone in this little pocket. Even competitors send people to me. We refer back and forth,” he says.
Sticking to a territory allows Tramonte to zone in on specific properties, rather than taking on more than he can handle. When approaching banks for foreclosed properties he asks only for those in his area, which makes him appear less demanding.
His unique marketing strategy has allowed him to stand apart from the crowd. “You can't be all things to all people. You have to specialize and be dominant in a small area,” he says.