When you work as a broker or agent in commercial real estate, the marketing funds that you secure from your clients as part of a listing presentation pitch are critical to your listing and commission growth. It could even be said that if you are struggling with listings and market share now, you are likely to not be converting enough exclusive listings with VPA (vendor paid advertising). If that is the case, take a look at your presentation and pitch process. How can it be improved and what would make your recommendations to the client stand out as the most relevant and special?
So let’s go back to the discussion around marketing funds; they are really important to the new business that you are generating. It works like this:
- With most properties listed today for sale you need about 1% of the expected property price to be dedicated to VPA. That money should be paid upfront by the client before the commencement of a dedicated marketing campaign. In a leasing situation, the marketing funds should be equivalent to about 5% of the expected first year’s rental.
- Every exclusively listed property deserves a dedicated and direct marketing effort by the agent into the targeted segments of buyers or tenants as the case may be.
- Any openly listed property on your books should not be given much of your time. Put a sign on the property, and only spend time on the listing if a buyer or tenant happens to enquire.
- An exclusively listed property should be secured for at least 90 to 120 days. If the property is large and diverse then that appointment should be longer and perhaps a full 6 months. In a property with many listings as a project or development, the listing period of exclusivity should be 12 months.
Taking these facts into account, it is wise to track your vendor paid marketing funds on a weekly and monthly basis. Compare your marketing funds approved and paid this month to last month, and then do the same to last year. Can you see an improvement? What is the difference between online and offline enquiry?
The observation is this:
‘You cannot easily sell or lease a property unless you have the funds to spread the word about the listing and its factors of attraction’
It is a very simple rule for agents and brokers to work to. Remember that with most property listings the inquiry that will come to you and that you generate is largely local. Local businesses and property investors understand the property market; they have reasons to act on issues locally.
Ensure that you have the vendor paid marketing funds locked in to your listing pitch and presentation. Secure the listing from a marketing perspective and with exclusivity for a good period of time.