Question: I’m a real estate broker of condominium units. Business has been good in spite of the hard times. But lately, competition has become fierce and is getting fiercer. So the subject of business growth has increasingly become a preoccupation, not only with me but also with my co-agents.
I read your Marketing Rx column last Friday. Somehow, the advertiser market sounded to me much like our target market.
So I told my co-agents and asked if they believe each of us can grow our business by focusing on the “big” buyers, like clients who are in for only three-bedroom or at least two-bedroom condo units.
My colleagues laughed at the idea.
Everyone said we are completely unlike an ad agency. So what will work for an ad agency, they said, won’t work with us. They told me the idea was a sure recipe not for growing our brokering business but for cutting it in half, maybe for even getting every one of us out of business.
I can’t explain it, but I’m still convinced that selling to the advertiser market is just like selling to our condo-buying client market. Your recommendation on how to grow the business of ad agencies should then apply to us in real estate brokering.
So does it? Please help me formulate the correct explanation.
Answer: There are just a few missing premises in your explanation. So, allow us to make explicit those missing premises to complete the explanation.
Business growth in the advertiser market can come more from a few big clients going into big ad campaigns than from many small clients with limited budgets that can only afford small ad campaigns.
The condo-buying market you’re looking at is made up of a few clients who are in the market for large condo units with three bedrooms, or at least two.
Business growth in the condo-brokering market can come more from the few clients buying the large three-bedroom or at least the two-bedroom condo units than from the many small studio or one-bedroom condo buyers.
So we agree with you. In addition to making your explanation complete, what you need in order to convince your colleagues are actual examples.
One way to find these is to benchmark against the experiences of premium and super-premium condo brokers whom you may know.
Just consider how much commission is going to your colleagues who are selling condos in AyalaLand Premier’s two posh condo projects: One Serendra in Bonifacio Global City and The Residences at Greenbelt.
If you know a broker friend who deals with either one or both of these big client condo-buying markets and you know the kind of revenue he or she is generating, then you have a great example.
You can also benchmark against the experiences of your own colleagues as well as your own condo selling experiences, even in the more ordinary condo projects you may be brokering.
Revenue split
Consider your brokering revenue split among your three-bedroom clients and your studio or one-bedroom buyers.
How many studio condos did you need to sell in order to match the money you made from selling the three-bedroom?
By “how much money made,” we refer to your “profit.”
Of course, your colleagues will point out how much longer it took you to sell the three-bedroom unit versus the studio.
But this is an issue of focus.
When you were running after both “big” and “small” condo clients, you found it quicker” to close the sale with the studio buyers.
But are you saying that if the money you made with the three-bedroom condo was about five times that from the studio, the time it took to close the deal with the three-bedroom client was also five times longer or less than five times?
If you focused on “big” three-bedroom buyers and set aside the studio buyers, don’t you think it would make it easier for you to close the deal?
The Senior MRx-er is reminded of an AIM M.E. (Master in Entrepreneurship) student of his in early 2000, who had the license to sell Sub-Zero appliances.
At that time, each Sub-Zero appliance (a refrigerator, a freezer or a cooking range) sold for about P5 million each.
Because this was a Serendra or a Residences type of an appliance, the lady in charge had to look for “big” prospective clients.
On that year, she found just one such account, a “nouveau rich.” She did her homework and found that she could persuade her prospect to make a purchase by telling him that Sub-Zero was the appliance brand of “the rich and famous in the US and also of the Zobels and the families of Henry Sy and Lucio Tan.”
Big buyers
The prospect bought immediately. In fact, he ordered four more sets, one for each of his “other four families.”
That was a total sales revenue of P75 million from just this one “big, big” client (P5 million x three Sub-Zero appliances x five families).
So the real concern you should have is not to prove the similarity between your condo buying market and the advertiser market. Your bigger concern should be on how to focus and go after the “big” three-bedroom condo clients.
And because of the similarity between the two markets, the key to going after a big slice of it is the same as with the “big” advertiser: relationship building, nurturing and deepening.
(Keep your questions coming. Send them to us at MarketingRx@pldtDSL.net or drnedmarketingrx@gmail.com. God bless!)