Real estate is an intensely relationship-driven business and nobody knows this as well as commercial mortgage brokers. They must always be on the lookout for new opportunities since many only earn income when deals close.
One way to source new leads among both potential clients and lenders is to use LinkedIn advertising. LinkedIn ad campaigns are an often overlooked tool that can help commercial mortgage brokers create, develop and strengthen relationships with individuals who eventually turn into customers or referral partners.
Many people are at least generally familiar with Facebook, Google and Instagram advertising. Anyone who is active on these social media platforms has probably noticed the increasing volume of ads in recent years. LinkedIn offers advertising opportunities, although the strategy for using LinkedIn advertising typically looks different than those on peer platforms. Namely, LinkedIn ads are usually used for business-to-business purposes, whereas other platforms tend to have business-to-consumer ads featuring relatively low-cost products for sale.
Unlike Facebook or Instagram, LinkedIn is almost exclusively used by professionals looking to connect with others in their industry. People are familiar with using LinkedIn to make or request introductions to others, which makes the platform a great fit for mortgage brokers looking to grow their professional network.
Moreover, when people log into LinkedIn, they’re expecting the content in their feed to be at least tangentially related to what they do for work. This is why sharing high-value content through ads is a great way for commercial mortgage brokers to connect with potential clients and lenders.
There are a few steps mortgage brokers will want to take before launching a LinkedIn ad campaign. First, determine your target audience.
Unlike Facebook and Google, which have highly nuanced algorithms to help you get in front of your targeted audience, LinkedIn requires a bit more legwork. It is often helpful for mortgage brokers to create personas (avatars) for their ideal target, thus ensuring that they’re getting the most value from their advertising campaigns. A mortgage broker who’s working with a commercial real estate developer to line up debt for their project, for example, might want to target “senior loan officers” or “loan originators.” Depending on the size and nature of the deal, they might want to focus only on local, regional or national lenders. They also could target real estate professionals who manage debt funds, which can be another great source of capital when trying to line up financing.
Second, you will need to create your offering. LinkedIn ads are generally used to get people into the top or middle of a sales funnel. Ads rarely help draw people into the bottom of the funnel, especially right out of the gate. Therefore, the goals of a LinkedIn ad campaign should be to help establish the commercial mortgage broker or their company as a premier thought leader in the industry, to become a trusted partner and to generate new leads.
Unlike Facebook or Instagram, LinkedIn is almost exclusively used by professionals looking to connect with others in their industry.
One of the best ways to forge new relationships via LinkedIn advertising is by offering high-value content. Mortgage brokers should consider what is likely to best resonate with their audience. Maybe it’s a free, downloadable white paper on what their company is seeing in the marketplace regarding current commercial mortgage-backed securities delinquencies. Maybe it’s a link to a recent podcast in which the broker has interviewed several developers about their perceptions of the most pandemic-resilient cities based on product type.
When deciding what to use as the ad’s offering, remember to not make your sales pitch too aggressive as hard-sell ads rarely tend to convert on LinkedIn. Instead, offer something so compelling to users that they’ll be willing to share their contact information to receive your offer.
You also will need to establish a budget. One of the reasons some people shy away from using LinkedIn advertising is its steep cost. The cost per click can range from $8 to $10 or more, compared to just pennies on the dollar for those who use Facebook and Google ad campaigns. When you get started, you should plan to spend anywhere from $5,000 to $8,000 to achieve the best results. A budget of less than that will not only generate fewer leads, but these leads will take significantly longer to roll in — several months as opposed to days or weeks.
Let’s use an example to show what a LinkedIn ad campaign might look like in practice. We’ll use the example of a commercial mortgage broker who is trying to connect with potential clients — in this case, real estate investors and developers. The broker specializes in industrial assets such as warehouses and storage facilities.
The broker starts by creating a discrete profile of the target audience, such as middle-aged (40 to 60 years old) real estate developers and investors, or developers located in the Northwest. These people will have at least 10 years of experience in the commercial real estate industry. They’ll have titles such as director, managing director, principal, owner or CEO.
In this hypothetical example, the broker decides to use two separate ad campaigns. Each will use a different type of content. The first advertises a downloadable document that describes the myriad benefits of using 1031 exchanges to grow one’s portfolio while deferring capital-gains tax in the process. This is an evergreen piece of content that should appeal to the masses. The second campaign will be more asset-specific and timely. It will advertise a white paper that showcases how retail properties are being converted for industrial purposes, especially in the wake of the coronavirus crisis.
The broker sets the budget at $5,000 for the first month. Rather than using LinkedIn’s on-site lead-generation form, the ad will be geared to redirect to the broker’s website, where a pop-up will encourage visitors to enter their contact information to receive a free copy of the content. This call to action will be the first step in familiarizing people with the broker’s company and brand.
Once the ads have run for a few weeks, the broker should test them to determine which of the campaigns is generating the best results. This involves tracking the metrics, such as the number of clicks, number of total impressions, conversion rates and increases to their company’s website traffic. Depending on how the ads are performing, the strategy can be adjusted to maximize the marketing budget.
Once the broker has several new leads at the top of the sales funnel, they can follow up with prospects individually and offer more information by connecting with them on LinkedIn or by calling them. Again, commercial mortgage brokers are reliant upon their networks for new business.
The broker might host a virtual cocktail hour with five to six people at a time, serving as the central convener of others in the industry — people who may or may not already know one another. It is through connections like these that stronger relationships will form and, over time, these can lead to new business opportunities.
Let’s be clear: LinkedIn ad campaigns are not right for everyone. Someone selling $200,000 worth of residential real estate may not be able to justify the platform’s steep advertising costs. This is quite different from commercial real estate transactions, which often total tens of millions of dollars. For a mortgage broker earning a 50 basis-point commission on a $10 million deal, for instance, the upfront expense can make a lot more sense, especially when you consider that these relationships will often translate into multiple deals over time. ●