This is the seventh in an 11-part series of understanding the key ingredients in all successful real estate transactions.
Have you ever attended an event where people were asked to guess the number of candies in a large glass jar to win a prize? According to Daniel J. Levitin, author of The Organized Mind, “the majority of answers will probably be very wrong, but the group average comes surprisingly close.” This is a great example of using crowdsourcing to find an answer and win a prize.
In commercial real estate brokerage, strategic marketing plans are developed to contact or inform as many potential users of a property as possible. This is a little like crowdsourcing. Large numbers of persons are involved, with the majority not having an immediate interest – like the wrong answers in the candy example above. Yet, the targeted group of people will likely produce the one needed buyer for the property – the prize winner. Here’s how a strategic marketing plan works:
1. Target Market Analysis – The first step is to determine the most likely list of users for the property based on the property’s highest and best use. The real estate professional analyzing the property collects a lengthy list of the property’s amenities, zoning, location, market conditions, demographics, access to streets or highways among many other things. Obviously, marketing a vacant commercial lot at a busy crossroad intersection involves a different list of buyers than a large warehouse or industrial building with overhead cranes. So, connecting with the right group of potential users is important to finding the right buyer or tenant.
2. The Marketing Outline – The second step is determining how to connect with your targeted users. This includes using multiple list systems, i.e. LoopNet, CoStar, Realtor.com, local association of Realtors multiple list systems etc. The professional commercial broker will also use direct mail campaigns, signage, classified ads, and electronic marketing including: email blasts, videos, website promotions, and online advertising to improve search engine optimization (SEO). These avenues are a great method of promoting the properties availability to potential buyers or tenants.
When selecting a professional to assist with marketing your property (see blog #1 in our 14 Key Issues in All Real Estate Transactions), ensuring they have professional designations and membership in the organizations awarding those designation is important. Organizations such as the Society of Industrial and Office Realtors (SIOR), Certified Commercial Investment Member (CCIM), or membership in the local Realtor monthly property exchanges. Having a real estate professional with membership in an organization such as Society of Industrial and Office Realtors (SIOR) or Certified Commercial Investment Member (CCIM), provides additional areas for promoting a property.
3. The Marketing Schedule – The third step outlines the scheduled timelines for the marketing promotions. When done correctly, the schedule outlines the details that will occur in the first 30 days, 60 days and 90 days of the marketing plan. It must answer the most important questions of any plan. That being: who, what, when, where, why and how. For example, who will receive information? What marketing method will be used? When will the marketing occur? Where will property information be placed? Why are the scheduled plans different for the various time frames? How will the seller know what is being done to put their property on the market?
This step also provides for scheduling time with the seller to review the results of the marketing campaign. Additionally, during these time periods ongoing discussions should occur regarding issues learned in the marketing process regarding terms, sale price adjustments, and results of follow ups with prospects buyers.
With a clearly written marketing plan outlining the goals, objectives, and desired outcomes in place, it easy for the seller, landlord, or broker to be able to measure the results of the marketing plan. The process will either provide a buyer or tenant for the property. If it doesn’t, the plan will provide insight to where adjustments need to be made to get the desired end result. Enjoy the candy.