Is Cold Calling Killing The Commercial Real Estate Broker?
Last week I was invited to write a blog entry for a popular commercial real estate website in the Midwest by Duke Long. The entry got a great response, so I wanted to share it with the readers of MOSatlanta.com. Below is the blog entry:
Is Cold Calling Killing The Commercial Real Estate Broker?
I have been pondering this question for the last couple of years. Ask most veterans in the industry how to generate more business, and I’ll bet you one of the suggestions will be to MAKE MORE COLD CALLS. Has it worked for me? Yes. 33% of my business has been generated from cold calls, including my largest deal to date. Granted, it took 10 follow up calls after the initial one, but the deal was nonetheless generated from a cold call.
So, what makes me ponder the question? Why would I think that a proven method would be killing the business that I love? Two reasons: One, the number of calls my clients and prospects are currently receiving from other brokers; and two, the fact that cold calling puts the caller on a lower playing field than the prospect.
1. Number of Calls. Here is a great example of how bad it has become in my market. A smaller client of mine (5,000 Square Feet) and I were having lunch a couple weeks ago. We were sharing new business ideas, mostly about social media, when I asked him the question: “So, have any of my competitors said or done anything that has really stuck out in your mind?” My client responded, “Honestly, I receive between 10 – 15 calls a week from brokers and it is all white noise at this point. My lease expiration must be on some sort of database or something.” His statement made me realize that even if I had some earth shattering news about my prospect’s current landlord, odds are that person is not going to hear it. Even the best cold calls have now become “WHITE NOISE”. Another example: a larger prospect (50,000 Square Feet) once told me the following, “Unless you can tell me that you’re going to save my company a billion dollars on my lease, I don’t have time to hear what you have to say. Besides, 15 of your competitors have already told me that they’re going to save me money.” I was referred to this prospect by his CEO. WHITE NOISE…
2. Cold calling puts you on a lower playing field than the prospect you are calling. Let’s be honest here. Cold calling makes you look desperate. 
It makes your prospect think you’re either green in the business, or you’re not very successful because you have resorted to making cold calls. Either way, it is an uphill battle just to be considered an equal in the eyes of the prospect. Add that mentality to the number of calls that contact is receiving from other commercial real estate brokers, and you’re now part of the desperate broker business of commercial real estate.
So, what’s the answer? Personally, I’ve decided to look for more efficient avenues to get in front of people. Will I give up cold calling all together? Not yet. However, times are changing, and I am changing with it. So, if and when I do make cold calls; I promise to listen to my own advice. I’ll make the time to research the company and their situation so when I do call a prospect for the first time, I’ll have something to say that will add value and not waste their time. If I continue to approach prospects with a professional and unique message and have a proven template to save them time and money, then maybe, just maybe, I won’t be caught up in the white noise, and I’ll do my part to avoid killing the commercial real estate broker through desperate cold calling.
I would love to hear your feedback in the comment section. Thanks.
This is a great assessment. Tenants are getting a ton of calls from inexperienced brokers who are overpromising what they can deliver. It creates a numbing factor in the marketplace.
An experienced real estate professional will do their homework, and come up with a specific, realistic strategy, that is meaningful to that tenant’s specific situation, before they make the call.
Even in today’s marketplace, you still have to create a mutally beneficial situation for both landlords and tenants, otherwise nothing gets done. That being said, tenant’s CAN get great deals today. But, most brokers aren’t putting forth the extra effort prior to making a call…they’re just dumping irrellevant information on prospects, and making empty promises.
I agree – and especially given the economy and less corporate business being handed out across the country – brokers who are used to waiting for their next assisngment are now relegated to having to hit the phones to make their money (many of them aren’t even good at it) – leading to MUCH more competiation and diluting the messege we are sending tenants.
I was curious to get feedback as to what everyone is finding as to the most effective methods for prospecting these days. I focus mostly on tenant-rep and my entire office pretty much uses Costar Tenant – which isn’t even correct half the time. Does anyone else have any useful tools that they know of – besides walking buildings….
The article is spot on. The corporate real estate market seems to be a very tight group. If I entertain one broker, I get 10 calls in the next 3 days wanting their turn at the table. Also, the “database” which isn’t always accurate, triggers an overload of cold calls as well.
For me, the thing that bothers me most is when I decline a cold call and the broker goes to a board member and gets them to agree that I’ll see them, even though I’ve already declined. It shows little respect for my time.
I believe cold calls are effective. It’s the approach that’s wrong, not the behavior.
Brokers need to stop shoving one solution (I can save you money) down the throats of their prospects. Instead, they need to ask, “What’s one thing you’d like to improve or change about your situation?” Begin the conversation there.