COMMERCIAL REAL ESTATE NEEDS TO INNOVATE & ADAPT IN ORDER TO STAY ALIVE
Atari, Blockbuster, Borders, Circuit City, Kodak, Motorola and Sears. What do these companies have in common? They were all once leaders and innovators in their respective markets but failed to adapt to their changing markets, and have fallen off, and in some cases are gone forever. In fact, of the top 25 companies on the Fortune 500 in 1961, only six remain today.
With today’s rapidly changing technology, companies and salespeople that do not adapt quickly and adopt many of the new technologies are doomed to failure, while others that do embrace the changes will see continued growth and efficiencies. This is true for all industries, including mine, Commercial Real Estate (“CRE”) brokerage.
CRE & Technology Then
I began my career in real estate in the late 1980s. I even remember someone asking me one day “Have you heard of this internet thing? Look it up, it’s going to be big.” When I first started in real estate we didn’t really use computers. Instead, we made paper notes, had a Rolodex, and carried a day planner. Computers were D.O.S. based, and then Microsoft came around. First it was Lotus 123 and then overnight Excel became irreplaceable and essential to work. If I wanted to conduct a rental survey of available properties, it would take days’ worth of calls and callbacks to determine if properties were still available. To look-up an owner we used microfiche. In essence, these everyday tasks became easier to accomplish due to the advent of technology.
CRE & Technology Now and In the Future
Today newer agents can’t imagine not having CoStar, LoopNet, TheMLS, or access to online profiles and title reports. Cutting-edge forms of information management and sharing are also appearing, and the CRE agent’s, landlord’s and owner’s ability to embrace them will only help to improve the market. CoStar and LoopNet are the giants in this industry, but with new companies such as CompStak, TheRRD.com, Real Estate Deal Sheet, and Sublease.com entering the foray this area is sure to grow.
What will they be looking back at in the future? Where will they see the market as having evolved too? I have been lucky to continually practice real estate for almost three decades, and through three recessions. I truly believe the longevity is due to me and my companies’ willingness to first embrace, then adopt new technologies and adapt to the ever changing markets. I truly believe that the next evolution in CRE will be in the way agents and companies market themselves and their properties.
Marketing to New Clients
The internet -- everyone uses it, not everyone exploits it. Marketing to clients has changed dramatically in the last decade. In the past everyone sent out letters of introductions, market information and requests for business. Many still do, but see a diminishing return as a new generation of decision makers rely even more on the internet. I opened my own brokerage company in 2006. We modeled it after what we knew, we marketed the same way we always marketed, but we saw diminishing returns. In the first six years our company was open, we never received one lead from our website. In 2012 we hired a marketing professional with a degree in the psychology of marketing. The first thing he had us do was to completely change our website design. We also began to disseminate the information we wanted to get out to clients in video format. We created short informational and fun videos that would capture the attention of our clients. We also began to move our advertising from print and mailers to online advertising, using a two pronged approach, direct click through ads, and remarketing to those who visited our site. In short, we now receive 4-6 leads every week from our website and internet marketing campaigns. Additionally, by having an increased web presence it also validates a client’s decision to use us.
Marketing Your Listings
The best way to sell or lease your listing for the highest price is to get it the maximum exposure. This includes online exposure, as well as direct marketing to both end users and other brokers. In addition to placement on your website and email blasts, an agent will want to stand out and engage a prospect. What better way to do this than to offer videos, either informational, or even video tours. For example, we recognized early on that many buyers for our Single Tenant NNN property listings were from out of the area, and were thus not able to tour a property prior to making an offer. We started offering video tours of the property and the surrounding amenities to increase exposure as well as interest. With this success, I believe that we will soon start seeing video tours of other assets, including spaces for lease.
So why doesn’t every company or agent leverage the new technology that is available to them to increase their exposure? Usually it is because they are using old business models and a mindset of “We’ve always done it this way, everyone does it this way, so why change it?” Many companies believed and felt the same way, there’s a list of them at the beginning of this article. Good companies start by selling a service or product that people want; great companies adapt to what people want and start offering what the people are going to want. The CRE industry needs to evolve, but leaders in the field need to embrace the new technologies, whether social media to expand our reach, or multi-media advertising to offer better sales presentations. As George Bernard Shaw once said “Progress is impossible without change, and those who cannot change their minds cannot change anything.”