There is considerable uncertainty about when the next downturn in the commercial real estate market will come, but most analysts agree on one point: The market will eventually slow down.
This means that commercial mortgage companies should be preparing for a time when deals get harder to find and close. Todd Kuhlmann, CEO of CRE Tech Inc., discussed how individual mortgage brokers and lenders can use marketing to stay relevant in the changing times.
In what ways can marketing be used by commercial mortgage brokers?
Marketing, in many ways, is about branding and perception. Like in all industries, it’s incredibly important for commercial brokers and lenders to brand themselves. You want to be perceived as the expert in the industry and the only way to do that is to market yourself.
Has the skillset of the typical marketing professional changed?
Marketing is constantly evolving, constantly changing. And so, what may work for one broker may not work for another based on their region and the size of their market. I was a mortgage banker prior to the Great Recession, and we did a tremendous amount of direct-mail marketing. Direct mail is very expensive. I’m not seeing a lot of success with direct mail when you take a very broad approach. Smart marketers are doing direct mailing to target their exact audience, instead of shotgunning it out to thousands of people like we used to do before the Great Recession.
One marketing method that has remained constant is, of course, networking. Building my network really helped me get through the last recession. I created lifelong business and personal relationships through networking and networking events. For the most part, people want to work with people they know. They want to know people who are educated and knowledgeable about the marketplace, and they want to work with people who they like and trust.
How is data being used by marketers?
Using big data to really pinpoint your exact audience will help lower your costs and improve the efficiency of your marketing. Identify your market area and specialization, and use the data to inform your marketing program. It can be a geographic area of responsibility, a property type, property size or any combination of these.
That said, you have to be careful of getting analysis paralysis. A lot of times, all I’ve seen people do is analyze the market. It’s important that once you have your focus area, you get out there. Get in front of your audience. See the people, talk to the people and make yourself known as that expert in the industry.
Can marketing be automated?
I’m actually a really big fan of automation and efficiency. I like to tell people, however, that content is king and the best content comes from you. You need to be consistently posting valuable content, even something as simple as writing a blog or doing an explainer video on a commercial [real estate] subject. For example, how to calculate your maximum loan based on [the] debt-service-coverage ratio question.
Can marketing help you prepare for the next downturn?
Yeah, absolutely. I’ve been through three downturns in the economy. The only times I failed in the previous downturns was when I didn’t do anything — just ignored the business cycles to maintain the status quo. So, build and maintain your network if you have not done so yet. Establish that online presence through your website, social media, blog, video. Educate your audience on the current market cycles.
This is something marketing departments can definitely do: Educate the audience on where we are in the marketing cycle, keep them aware of the changes in their industry, but remain positive yet realistic in how you relate the information.