Do the 3 P’s of CRE Apply to You?

Last week, I  had the privilege of being in Portland, OR for a commercial real estate conferencence.  I had never been before and discovered it to be a beautiful and unbelievably clean city.  I was blown away.

Courtesy of iStockPhoto

Courtesy of iStockPhoto

Our Pacific Northwest franchisees put on a great training conference.  I got to speak on how to improve efficiencies with technology.  I also got to lead a couple of break out sessions on measuring outcomes and accountability.  It was a blast.

Curt Arthur, our managing director and franchise owner in Salem, OR said something there that I had to write about.

He mentioned in his opening remarks the 3 P’s.  These are the three things that typical commercial real estate brokerages do with a new listing.  He was not complimenting our industry of commercial real estate.

3 P’s of Typical Commercial Real Estate

  1. Put up a sign.
  2. Put it online.
  3. Pray that someone will bring an offer.

These are not bad things.  A sign is a great way to broadcast to locals that property is available.  Most property searches start online, so you have to make sure your listings are there.  And I am a huge believer in prayer so don’t get the wrong idea here.  For those of you who would substitute the word ‘hope’ for ‘prayer’ – hope is not a strategy.

This is called Passive Marketing.  The definition of passive marketing is to flood the market with information on all fronts, and then wait for the phone to ring.  That is simply not good enough.

But this is the norm.  Too often, a seller signs a listing contract and doesn’t hear from the broker for 6 months when it’s time to extend the contract.

The other side of the coin from Passive Marketing is Proactive Marketing.  Proactive Marketing is taking the initiative to ensure everyone who could be a buyer knows the property is available.  That takes work.  That takes a system.

So here are some questions for you to consider as you start your week.  I encourage you to ponder and share your answers in the comments section below.

  1. Is hope your strategy?
  2. Will you be described this week as proactive?
  3. In what ways will you proactively market your listings, products, or services?
  4. What are the most effective ways you proactively ensure that every qualified buyer knows about your listing, product, or service?

Question: Will the 3 P’s describe you this week? You can leave a comment by clicking here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

  • No, not a chance, but I also say, it depends and each property requires its own marketing plan and approach.

    • I agree – so how do you do that? How do you come up with that plan? What does it depend on?

  • Fred Waldman

    I’ll suggest 3 additional P’s:

    Prepped Is the building/space Prepped for disposition? Cleaned, vacated, deferred maintenance, aesthetics? Is a due diligence package prepared?

    Pricing/ Pro Forma- has the broker provided required market info for the owner to determine an expected and acceptable return? Market supply, demand, activity, returns, etc? Financial analysis suggesting returns based on a range of capital & expense assumptions?

    Promptness- Does the broker respond quickly to info & showing requests? Does ownership respond promptly to offers/counters & make repair history, tax appeal & other info readily available?

    Each of these will contribute to the success of a disposition plan in a competitive market.

    • Fred – very nice sticking with the P-theme!

      The 3 Ps you suggested are still not what I was talking about regarding proactive marketing, though they are great suggestions to prepare a property to sell quickly.

      What I want to know is what do you do to proactively get information to the most likely buyers?

  • Tim Davis

    Bo – I have a 2-3 page marketing plan that is practically a living document, in that I alter and change it with regularity. I still say that a morphed “buyer list” is still how sucessful agents market property. If I list a hard corner parcel, and the land use dictates free standing retail, fuel, etc – then you generate a short list of those types of users and/or developers that build them, and set out to market your listing to them.

    I’ve ready one of your posts about “the pitch” a while back where you mentioned that everyone claims to have “buyer lists” – the reality is that I do have a very organized set of contacts, and I record details about them when I put them into that contact database (google apps). I can search “fuel” and get anyone related to a fuel station.

    I think they next frontier after your 400-600 properties may be working on your database of buyers, brokers/ developers, etc – that could be far more important once your prospecting is done and you have steading listing flow.

    • Tim – you are right on. This is what I’m talking about when I talk about proactive marketing. You are going after a targeted buyer list. You should be able to profile the likely buyers, build your list, and then pursue them.

      The passive marketing is for the rest of the market who doesn’t make your list.

      What other ways can your proactively market a property? How do you contact your list?

      • Tim Davis

        I call them on the phone. I prospect by phone. I followup by phone. I give owner’s updates/status reports by phone.

        To quote Boiler Room, “This is a contact sport, the more contacts you make, the better you will do.”

        I had Clientlook for a year, and none of my clients ever used the client window. They thought it was neat, but all had the same response, “you pretty much keep us up to date with what is going on”

        • Bo Barron, CCIM

          I love the Boiler Room.

          I couldn’t agree more. The top producers in our business spend their days dialing, informing, and adding value to prospects and clients. Thanks for commenting!

        • The phone is the most important tool that we have, and top producers have it glued to their ear all day every day.

          One thing I saw my dad do all the time was just drop in. We’d be heading back to the office after a lunch meeting and he would notice someone’s office. Instead of picking up the phone, he’d just pull into the parking lot. I was petrified when he did this the first time. He had created such strong and trusting relationships, however, that people would see him and be happy to do so.

          I think technology and social media has replaced some of this kind of ‘see the people’ action, and it’s a shame.

  • rnschmidt

    Great post Bo. Here’s a good write up on CRE marketing plans including a marketing action plan template that brokers can use:

    I’m curious – is there anything you’d add or subtract from that list to make it more proactive?

    • That is a great list, and I don’t know if I’d have anything to add. I think the execution of those items – which encompass both passive and proactive marketing tactics – is the key. Thanks for sharing!

  • Chad Grout

    Passive vs. Active Marketing is breaking this business down in terms that are too simplistic. We’ve all had listings that we couldn’t pay someone to lease or buy and we’ve all had those listings that moved before the sign went up. To stay with the P theme, I put much more weight on Preparation and Positioning, which is more about coaching the owner in advance of the listing coming to market. Of course, the owner has to Pick the right broker who knows their market the best.

    • Chad – you make a great point, and nice job sticking with the P theme.

      Along with Preparation and Positioning, you can add Pricing. Those tasks are crucial in getting to the won listing. Once you get there, and do so Properly, then what?

      Thankfully, I know you, as a former coaching client, and I know that you don’t go the way of Passive only!

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