Not all leads are created equal, so segmenting prospects is an intelligent way for commercial real estate brokers to use their time more productively. Focusing on the relationships that are most likely to turn into revenue means wasting less time on low probability leads.
Segment targeting also allows you to take a more personalized and refined approach to outreach, boosting your ability to craft messaging that is more likely to drive action. In fact, personalized emails deliver transaction rates that are six times higher than non-personalized emails, according to research from Experian Marketing Services. The same concept applies to cold-calling as well: customizing your phone outreach based on a prospect’s persona and needs dramatically improves results.
There are common prospect scenarios in commercial real estate that signal an opportunity for engagement. Brokers who track those scenarios and customize their outreach accordingly will boost their chances of generating new business. Although the details of the scenarios and suggested approaches differ, there is an underlying thread: understand your audience, and reflect that understanding in your personalized approach.
Scenario 1: On-market listings
If someone’s existing real estate broker has yet to execute on an on-market listing, there may be a business opportunity for you. Brokers should track these listings and estimate when the landlord/seller agreement expires based on their market’s typical representation agreement terms. This type of engagement usually lasts between six and 12 months, but every market differs. Note that there could be legal considerations concerning how and when you can contact someone who is already represented, so do your homework. Brokers should plan their prospecting activities for 45-60 days before the expiration so they can begin to form a relationship and gauge the potential client’s likelihood of seeking new representation.
The personalized approach: There’s a specific reason that listing is still on the market. Think about why. Either the current broker failed to market it effectively, or the price is too high. One of those reasons will provide the narrative path to persuasive communication. Of course, be wary of outright criticism or accusations. Rather than focusing on the current broker’s perceived shortcomings, emphasize what you can do more effectively or share your views on price using market data to support your points.
Scenario 2: Recent transactions
Every broker who notices a sale transaction will try to take advantage of the event, and for good reason. When real estate is sold, there are a number of imminent opportunities to consider. Sellers not only have the proceeds from the sale, they also have a substantial tax incentive for re-deploying that capital quickly because of the 1031 exchange tax law. Brokers should consider the motivations of the players in these recent transactions. Why did the organization sell this asset? Perhaps they are undertaking a portfolio disposition effort. Why did the buyer pull the trigger? It could be part of a larger acquisition strategy.
The personalized approach: You will want to congratulate them, but that might not be enough to make you stand out. (Remember, you’re not the only one who realizes this sale could be a harbinger for a business opportunity.) By understanding these players and their motivations, you’ll have a better shot at building a real relationship. Research what else they’ve sold and what else they hold, and try to demonstrate this knowledge in your outreach. If you have a compatible listing, mention that. This will show them that you understand their needs and their timeline.
Scenario 3: Principals with near-term debt maturity
Because of the short-term nature of commercial mortgages, property owners with debts nearing full-term are in a unique position. If they owe a balloon payment on their loan, they may need to go to market with that property. Savvy brokers know the properties, the owners and the debt terms—and they catalog them for strategic outreach at the critical moment. If your firm can’t help with refinancing needs, focus on owners who are more likely to sell than refinance.
The personalized approach: Timing is everything—well, almost everything. Because you’ve done your homework, you know they have to take action, and when. But also demonstrate how you can help. Show that you not only understand their needs and time constraints but that you have unique expertise and experience that can benefit them.
Scenario 4: Trigger events
Top brokers track events such as company expansions, relocations and funding rounds and use them as a reason to reach out. Everyone likes to be congratulated, and these company milestones have real meaning to management. This type of communication is more powerful than a simple “check-in” email or call.
The personalized approach: Start with a “congratulations,” then proceed to have a human conversation, not a sales one. Learn more about their needs and bring them valuable information, such as insights gleaned from working with companies in similar situations. Your communication should demonstrate your expertise and how it will bring true value to their business.
These scenarios are examples of audience segments with a high probability of requiring a broker’s service. The first step is identifying them. But just as important is tailoring the outreach appropriately, in a way that conveys that you’ve done your homework, understand their needs and have the capability to deliver true value.
Tanner McGraw serves as CEO of commercial real estate software provider Apto.