As published in Scotsman Guide's Commercial Edition, May 2008.
I used to do a lot of traditional marketing. I attended industry events, met people, gathered cards and followed up with contacts in the days and weeks after those events. This marketing approach had a slow and steady success rate. Eventually, I had hundreds of leads in my database, and I called them occasionally to follow up. I obtained my first group of clients this way.
After years of using this method, however, I deduced that I would have better success focusing more thoroughly on a smaller subset of the leads and that if I paid careful attention to their verbal and nonverbal cues, I could figure out which prospects actually wanted to do business with me and who was just being polite. This increased my percentages dramatically.
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Then I refined my prospect database and focused on the highest-probability prospects, the repeat clients. Then I had another epiphany: If you do what you love doing, and you do it well, you can rise to the top. This happens in every industry and in all walks of life.
As such, I've found that a solid approach to marketing is to try to do a perfect job for your repeat clients. If you do what you do well, people will notice. And the referrals might start pouring in. Indeed, you may get new business almost exclusively from word-of-mouth referrals and enjoy a high client-retention ratio.
Although this may not be considered traditional marketing, it is still a way to market yourself by forming lasting relationships with clients and showing them they can rely on you. Sometimes, doing your best and striving for perfection on behalf of your clients is the best form of marketing.
What are some ways to do this? The opportunities are endless. With current customers, for example, carefully analyze their needs and the characteristics of each loan. You can underwrite and package a financing request and confer with them regarding its content. Or you can try to structure creative solutions derived from your extensive knowledge of the capital markets, for instance.
Depending on the customers' desires, consider contacting many lenders and managing a competitive bid process. Or if necessary, work closely and professionally with one capital-provider that fits well for a specific transaction.
Obtain preliminary financing terms from prospective capital-providers, evaluate the options given the customers' objectives, and make recommendations. Provide a comparison of each financing proposal by reviewing financing terms such as amortization methods, escrows, holdbacks, lender fees, defeasance and other prepayment penalties.
By showing a solid work ethic, attention to detail and a passion for the business, you minimize the clients' involvement with processing and paperwork. And by offering such good customer service, you enhance your reputation.
Focus on your professional development, as well. Read and discuss trade magazines and finance journals. As part of that, you should know what's going on in the industry. Stay informed about various lenders' preferences. Learn about transaction pricing and structuring information. Know the new financial products and the "hot money."
Are these things marketing? I think so. They bring more clients through the door. So if that's not marketing, then we should probably rethink the definition of that word.
Your approach to the business should be to maintain the highest standards of integrity and ethics. Borrowers will know you are not trying to sell them a financing deal, but rather that you are working with them as part of a team effort. Through the years, this can foster trust between you and your clients.
Michael Schwartz works at Financial Compound, a leading national commercial real estate finance broker based in Santa Monica, Calif. Members of Financial Compound's staff have closed more than $2 billion in transactions in their current and past roles combined*, running the gamut from low-leverage first mortgages to structured debt and equity placements.
Financial Compound is experienced with financial structures, including acquisition, construction, bridge, rehabilitation, credit lines, mezzanine loans, joint-venture equity and preferred equity. Visit www.financialcompound.com. Contact Schwartz at (310) 260-5900.
*- Ed. note: This reflects a change from the information printed in Scotsman Guide's May commercial edition following clarification of the author's originally provided biographical information.