The marketing of a commercial property today needs to be quite specific and unique. The attributes of the property, the prevailing market conditions, and the requirements of the property owner will all have some bearing on the marketing campaign to be created.
Gone are the days of a generic marketing campaign. To be fair to every commercial property taken to the market today, the exclusive listing process is highly important together with vendor paid marketing. In this way you will attract the right levels of enquiry to convert inspections and eventually negotiate on a closed transaction.
Here are some tips that can be applied to the marketing process so that you can achieve a high level of well qualified enquiry.
- Inspect and review the subject property in a comprehensive way. Do so with due regard to the existing levels of improvements and the attraction factors that the property provides. If you were a buyer or a tenant for the property, what would attract you to make the property enquiry that is required? What would trigger you to lift the telephone and contact the agent?
- When you completely understand the subject property, you can look through the local area for any competing properties that may still be on the market. You can also look for any existing properties that may have been recently sold or leased. Get details of any recent sales or rentals that have impact on your subject property. This local information will be invaluable when it comes to client conditioning, and future negotiation. The buyers and tenants that are in the market today will understand the availability of other nearby property and the prices or rentals as the case may be.
- Given the two previous points, you can now consider the ideal target market that will apply to the subject property. From that target market, you can construct an ideal and comprehensive marketing plan. I go back to the point made earlier, where the landlord or property owner should be required to give vendor paid marketing funds to you as part of the marketing effort. It is quite normal for one per cent of the expected sale price to be the contribution required of the property owner towards the marketing campaign. It is very wise to get these funds paid in advance into your trust account or client advertising account as part of the preparation for marketing.
- Determine the duration of the marketing campaign given the known target audience and the complexity of the property. How long will it take you to reach the target audience and activate the right level of enquiry? In most circumstances, this can be achieved in a period of eight weeks. For this reason, most marketing campaigns can be focused on an eight week time frame, with suitable adjustments during that time frame as enquiry comes in. You will know during that period if the right messages are being conveyed to the local business community and target market.
- If the local property market is saturated with similar properties of similar type, then you will need to adjust the marketing campaign after the initial eight week period. If the property is to remain on market for an extended period then a secondary strategy will be required. That being said, the initial eight week marketing focus should have created some form of substantial enquiry for you to establish market feedback and potentially some offers.
- Mix your marketing efforts across a number of media types and media strategies. We all know that the Internet has a major role to play when it comes to the marketing of commercial and retail property today. In your local area, you should know the strategies that work best when it comes to marketing property and generating enquiry.
From the earlier comments made above, you will have noted that the exclusive listing strategy is a key component of marketing commercial and retail property today. A good exclusive listing marketing campaign will always create more enquiries and hence give you a better chance of converting a lease or a sale as the case may be.
When you work with and on exclusive listings you will be building a database of well qualified buyers and tenants in your location and industry. Over time this will lift your conversion factors and potential commissions. If the property owner wants to list their property openly across a number of agencies, it can be a complete waste of time from your perspective. Some top agents will not normally work with open listings for this very reason.
In commercial real estate today, it pays to undertake the necessary market study before you open the commercial real estate office for trading. Preparation will help you attract the right market of clients and prepare the right resources to drive your business forward. Your marketing plan should form part of your business plan.
A successful commercial real estate office will be built from a fine balance of resources, and the right people. Regrettably is somewhat hard to get good people to work in the industry at a high level for a long period of time. It is notable that there are fewer top agents in comparison to ordinary agents. The ratio is probably 2 in 10.
This leaves the opportunity wide open for ordinary agents to move to the top of the industry providing they establish solid performance systems. The proprietors of real estate agencies and businesses require top agents to give stability to the agency and grow the commission base. Whilst it sounds obvious, it is harder to achieve. The proprietors of commercial real estate agencies are always on the lookout for top agents or those people that can be shaped into that level of performance. It takes a person with a particular mindset and drive.
Here are some tips to establishing your marketing plan for your commercial real estate office:
- Determine the size of your market geographically. Ensure that the area is realistically comprised of quality properties and potential clients. Within that region, you can identify the history of transactions over the last few years. Ideally you will be looking for an area that is under change or expansion. Given that the commercial real estate industry is based around local business occupancy, you should also incorporate the review of local businesses into your initial market study. Look for an area that has a vibrant business identity and future. Look for an area that has an abundance of quality properties or vacant land to be so. Look for and area that is growing or active.
- Within your defined territory, identify the property types that will produce the necessary commission for your business. It may be that those properties require staff specialisation. That is certainly the case when it comes to retail property and retail leasing.
- It is somewhat easier to build a new commercial real estate office from a base of industrial property sales and leasing. That is simply because the property type is basic and straightforward. It is also easier for you to apply relatively inexperienced staff to that property type. Over time they can then graduate into Office Property and eventually Retail Property if that strategy seems suitable and the market opportunity exists.
- The size of local properties will dictate the size of commission. That being said, it is necessary to target the right quality listings in the right locations from the moment that you open your doors as an agency. Exclusive listings will produce better quality commissions over time. Initially you may find it hard to encourage exclusive listings, although the attempt should not be overlooked. Initially you will probably need to accept open listings and have your salespeople work on that general stock. When you eventually achieve greater market churn and success, it will be easier to convert exclusive listings given that you will then have a track record.
- Undertake a competitor analysis throughout the region. Some of those competitors will be more successful than others. Identify the reasons for that success and determine the points of difference relative to each agency and salesperson. How will your agency compete against those competitors? What can your agency do as part of attracting new business? How can you pitch for listings against the established local agencies?
So these are some key ideas that can be merged into your commercial real estate marketing plan. Other local area factors should also be considered and merged into the plan.
Before you open the doors of your new real estate office, ensure that you are fully aware of the strategy that needs to be implemented and the staff involved in the process. You can then create your staff attraction process to find the right people for the business.
In commercial real estate today and in your agency, it is necessary to have a good selection of quality listings. Quality listings will always create solid enquiry in any market. It is those quality listings that will help you with dominating your territory and converting more commissions.
It is an observed fact that low quality listings produce poor enquiry. It is much harder to build your market share and listing opportunity as a commercial real estate agent from poor quality listings. That being said, it is also the case that open listings produce poor quality commercial real estate activity. As a priority, pursue exclusive listings for a lengthy period of time with all of your clients. In this way, you will control market enquiry and convert more transactions personally.
So here are some rules that should apply to the prospecting process in helping you with your market share and future commercial real estate business opportunities.
- Get to know your territory intimately. That will mean on a street by street basis and or property by property basis. Your territory should not be too large or too complex. You cannot be a commercial real estate specialist to everybody and every property type.
- Identify the existing properties on the market today and their time on market. There will be reasons for properties not selling or not renting. In each case you should review the competing properties and competing agencies to understand the errors in marketing and the poor performance of some of the salespeople involved. Over time you can market yourself around weaker agencies and properties that have not been correctly promoted.
- Prospecting should be undertaken on a daily basis for at least 2 or 3 hours. That should be the number one activity in your diary regardless of anything else. When you set this rule and stick to it, you will achieve more market share and market intelligence. Over time this will have a major impact on your commissions. Cold calling should feature as a main component of your prospecting efforts. This requires special diligence and commitment, but the rewards are many.
- Get to know the businesses throughout your local territory. Those local business proprietors will understand and potentially help identify for you the changes to property in the local area. Over time those businesses will also be looking for alternative premises to lease and or rent. Those businesses can also be a great source of sale and leaseback activity.
- It is very easy to approach businesses as part of your prospecting model. On that basis it should occur every day. You will gain valuable market intelligence from the process. It is somewhat harder to identify property owners and approach them. That is mainly because they hide behind company structures and property trusts. Create a list of prime properties in your region so that you can gradually work through the potential property ownership structures and identify the right people to talk to. It will take time, however the results are significant.
While this list is not finite or complete, it will give you the foundation for the prospecting process to commence. The commercial real estate industry is very much personally orientated and built on relationships. Over time you must build relationships with key people, business proprietors, and property investors.