The Biggest Challenge CRE Firms Face — And How to Solve It
Commercial real estate (CRE) dealmaking is extremely complex.
You have to understand your clients’ expectations, market conditions, available properties and spaces, and much more to close deals.
If you feel overwhelmed trying to keep track of everything, you’re not alone.
In fact, in a KPMG report — Confronting Complexity: Research Findings and Insights — over 94% of commercial real estate (CRE) executives identified complexity as their greatest challenge.
So, how should CRE leaders go about solving this challenge?
According to the same survey, 84% of CRE executives believe improved information management is the key.
That makes sense, given that many firms still rely on outdated, manual tools like Excel, Outlook, and paper notes to manage their client and market data.
And — as we’ve covered in a previous post — that can lead to disaster.
Fortunately, there is a better method.
Below, we’ll discuss how client relationship management (CRM) technology can help CRE firms streamline complex workflows and processes — and what you should look for when evaluating a new solution.
The benefits of CRM
A CRM can help your firm more easily manage the data you collect on clients, properties, and market conditions.
And because the data is connected in a single platform, it gives you the context you need to see the full picture.
“You can relate objects to each other, so a company can own properties and a property can have a proposal attached to it,” said Michael Brondello, an independent Salesforce consultant who recently helped The Whinery Group at Marcus & Millichap replace spreadsheets and paper notes with Rethink’s CRM. “You just can’t do that with a standard table.”
Why does that matter?
“Let’s say there’s a client who owns a property, and you’re issuing a proposal on that property,” Michael said. “The way Rethink works is you have a record for the contact that’s related to the record for that property, so when you create a proposal, it’s linked to both the contact and the property.
“Then, anytime you go to that contact’s page, you can see the property information and the proposal information right there.
“After you submit the proposal, let’s say they want to go ahead and sell that building. Now, you can hit a button and create a listing based on the information already stored in your proposal,” Michael explained.
And according to Software Advice, that kind of data access leads to tangible benefits. Of the businesses they surveyed that invested in a CRM:
- 74% said their system offered improved access to customer data.
- 47% said it had a significant impact on customer retention.
- 47% said it had an impact on customer satisfaction.
And it doesn’t end there. Research from Salesforce shows implementing a CRM leads to:
- 29% increase in sales.
- 34% increase in productivity.
- 40% better forecasting.
But most impressive of all is how a CRM impacts the bottom line.
According to a report from Nucleus Research, for every dollar spent on CRM software, businesses can expect an average of $8.71 back — a 771 percent return on investment (ROI).
That’s the kind of return anyone can get behind.
But just because CRMs often deliver an excellent ROI doesn’t mean you should rush to invest in just any solution.
What to look for in a CRM
Unfortunately, not every CRM will offer the benefits listed above, and evaluating CRM platforms without prior knowledge of how they work can be challenging.
For example, when first seeking out a CRM, many people think all they need is a contact database, which can lead to them missing out on many of the key benefits an effective CRM can offer, including:
- Improved prospecting.
- Pipeline management.
- Revenue forecasting.
- And much more.
So, what exactly should you look for when evaluating a CRM?
Most CRMs are designed to support a very simple sales process — you find an interested prospect, make your pitch, and close the deal.
But, as mentioned at the beginning of this post, CRE is complex.
You have multiple contacts involved in each deal associated with various companies, firms, and properties.
A CRE-focused CRM will have features built to help you manage this complexity with ease.
Some CRE-specific features you might want to look for include:
- Stacking plans that help you stay on top of lease expirations in specific spaces.
- Map-based searching tools that help you identify properties that meet certain requirements within a given location.
- The ability to automatically generate COMP data from closed deals.
The point is this: If you’re investing in a CRM, it needs to complement the way you work.
Spend some time thinking about your current workflows and processes, and make sure the CRM you’re evaluating can support them.
Another characteristic you want to look for in your CRM is an intuitive design.
As Salesforce consultant Michael Brondello noted, “With brokers, you have to keep it simple. It has to be easy to use — because as soon as there’s any friction, you’re going to lose them.”
Functionality like the ability to drag and drop deals as they move through each stage of the deal pipeline can simplify solution use, promoting higher levels of adoption.
But CRMs shouldn’t just be simple to use, they should also make it easier for brokers to do their jobs.
Look for the ability to create workflows that automate cumbersome, time-consuming tasks, so brokers can focus more of their time on what they do best: closing deals.
For example, task reminders that automatically remind brokers when it’s time to follow up with a client or automated emails that notify back-office staff when a deal has closed can offer the quick wins that get brokers bought in early.
The brokers at your firm probably aren’t spending most of their work hours at their desk in front of a computer.
They’re most likely spending the bulk of their time out of the office, networking and touring properties.
If you want them to actually use a CRM, you’ll need a mobile-friendly solution.
This will help ensure they’re updating contact and deal data the moment something changes — while it’s still fresh on their minds.
It will also give them access to the data and insights they need to drive deals forward while they’re out meeting with clients and prospects.
Another factor to consider when evaluating a CRM is integrations.
If your CRM doesn’t integrate with the other technology you’re using, you’ll end up having to enter the same data into multiple systems.
Not only will that waste time, it can lead to data-integrity issues, as it creates additional opportunities for human error.
But integrations don’t just save time and prevent errors. They can also enhance your CRM’s business intelligence capabilities.
For example, integrating with your marketing solution can make it easy to identify which marketing efforts lead to wins.
And integrating with your CRE data provider can ensure you have the COMP data needed to identify and negotiate favorable deals.
A successful implementation is key to maximizing the value of your CRM.
If a vendor says you can implement their solution yourself or you only need “a simple data upload” to get started, that’s cause for concern.
Correctly compiling, scrubbing, mapping, and uploading your existing data into a CRM is a complex process, and you’ll want professionals with experience assisting organizations like yours to guide you through the process.
An implementation team is also helpful when making configurations that ensure your CRM is set up to encourage success.
They should take the time to learn your business and processes, establish goals, create a plan for your firm’s success, and tailor the system to meet your needs.
Dedicated client success manager
No matter how well your CRM is designed, you will have questions at some point.
Having a dedicated client success manager you can reach out to during those times is critical.
This person will be your main point of contact and your advocate within your CRM provider’s organization.
Their job is to learn how your organization operates, how you’re using the CRM, and what goals you hope to achieve.
Whenever you have a question, they’ll have the context needed to provide the best possible answer. (And they can even help you provide feedback that ultimately drives future solution enhancements.)