On separate occasions, I recently met with two owners of commercial real estate firms. The two firms are similarly sized, about 20 to 25 brokers each. Both are traditional brokerages, full-service CRE firms with one office each and doing business primarily in their home metro areas.
The two managing brokers don’t know each other, but they have a lot in common: Despite being generally successful, neither is happy with their revenue. Both companies are profitable but have not reached the “thriving” level. And both are certainly not reaching their potential.
A quick examination revealed the same reason why revenues are falling short of goals. Both owners are mistaking promotional activity for selling activity. Let me explain …
Both managing brokers tirelessly promote their companies. They belong to service clubs and chambers of commerce. They are involved in local economic development efforts. They show up at networking events. They lead active social lives. They advertise. They have a social media presence. They sponsor events. One of them even sponsors a youth sports team. Yet despite this activity, neither is getting enough new business to come through the door.
So, what’s the problem?
While they’re doing a great job with promoting, neither company has a true sales culture. Both owners are getting their brands out in the marketplace. They are creating name recognition and associating their brands with positive feelings. But promotion is simply not enough. Promotional activities don’t in and of themselves lead directly to signed deals. If you stop at promotion, you’re not going far enough.
No matter how tirelessly you promote and no matter how much you spend on marketing, making a sale usually requires someone from a company to do five very specific and very important things:
1. Interrupt someone’s day when they don’t expect to hear from you and turn them into a prospect;
2. Conduct a live discovery process in which you figure out what prospects truly care about and what problems they need help solving;
3. Demonstrate how the product/solution exactly meets their needs. In the case of commercial real estate brokerage, you show how valuable your representation services are when seeking a listing or how valuable a property is if you’re trying to get someone to buy or lease it;
4. Answer questions, instill confidence and overcome objections;
5. Confidently ask them to sign up.
To be successful, all brokers in your company must repeat this process with multiple people each and every day. If you’re not focused on the five activities above, you are wasting time and money.
Disturbingly, many CRE professionals spend very little time actually selling, and nobody is holding them accountable. That’s right, people whose jobs are to specifically sell/lease real estate, often focus on promotional activities as a way to avoid actually trying to sell something.
I have met countless CRE agents who think if they are well known enough or if they post enough interesting things on social media, that they’ll magically attract tons of clients. Rarely does it work that way. Rarely is it so easy to win new business. Getting a bunch of “likes” for your Facebook post might feel good, but you can’t deposit “likes” at your bank.
It’s easy to do the relationship-building part of sales, but it’s harder to follow through with the selling part. Calling a corporate decisionmaker who has never heard of you can be intimidating. Asking for the order is inherently difficult, because it’s not fun to be turned down. It’s human nature to avoid rejection. Because of that, many people put themselves out there, build relationships and simply hope and pray that the clients will come to them.
That’s too passive. Waiting for people to volunteer to be your clients might work occasionally, but it won’t generate enough business to make you a top producer.
There are some benefits that come from promotional activity, but they are generally limited to branding and lead generation. Promotional activity is simply a means to an end. To succeed, a company needs a sales-prospecting culture and an individual agent needs a sales-prospecting mentality.
All activity should ultimately be focused on landing clients and closing deals.
Omaha, Nebraska-based Jeff Beals helps CRE brokers find better prospects and close more deals. He is an award-winning author, international speaker and accomplished sales consultant. Beals is creator of the DEALMAKERS Commercial Real Estate Online Sales Training Program.