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Home / Property Marketing plan seriously Homeowners part 2
By arlene | June 29, 2008
Promotion activities
Once you have identified your target market by buyer type and where possible, identified individual and company prospects, the question arises: How do I reach these people in my target market? This is the function of your promotion campaign which involves the use of four “tools”, personal selling, sales promotion, publicity and advertising.’ 6 Which of these tools, and in what combination, will enable you to communicate best with your potential buyers. The first step is to simply list all the promotional activities that may lead to a sale. Let us now briefly consider each of these four tools of promotion.
- Personal selling. For commercial and industrial properties personal selling, almost without exception, constitutes the main thrust of your promotion campaign. After targeting prospects, contact them personally.
- Sale promotion. Sales promotion is an important aspect of the promotion of commercial and industrial properties. Hand-bills are frequently used for direct mailing to target market clients. Hand-bills also known as fact sheets, are simply intended to arouse interest so that somebody will make enquiries. They usually do not contain sufficient information to allow the recipient to make final decisions. Hand-bills or fliers are often also mailed in response to phone calls from interested people who phone in to enquire after they have spotted your “for sale” board on the subject property. Decision brochures are also used but are usually only distributed to serious potential buyers. These brochures differ from fact sheets in one important respect — they usually give all the information necessary for decision making. Decision brochures run from five to fifty and more pages, depending on the complexity of the property and the transaction and the sophistication of the prospect. A brochure for the sale of a regional shopping centre site may contain architectural drawings in full colour, building cost estimates from a quantity surveyor, trade area analyses, potential national and lineshop tenant mix, income and expense statements, balance sheets and market valuations. Adapt these brochures to your needs. The golden rule is to avoid swamping the prospect with information. Decision brochures are distributed only to serious potential buyers because they usually are expensive to produce. Other frequently used sales promotion techniques include the business lunch, cocktail parties, monthly newsletters featuring the property, and bonus commissions to salespeople.
- Publicity. Publicity can be an extremely powerful tool, depending on the nature of the property and the amount of interest that it will generate on a local, regional or national scale. A huge new regional shopping centre is likely to receive considerable local and regional publicity, with some national interest. Publicity will frequently attract the actual buyer of a property, such as a regional shopping centre site or a farm of historical interest.
- Advertising. Perhaps the most important aspect of advertising as it pertains to commercial and industrial properties, is your “for-sale” and “sold” boards. Classified advertising is of relatively little, if any, importance. Sometimes a case can be made for display advertising in selected media such as magazines and trade journals but this is an expensive form of advertising which often leads to disappointing results.
The promotion campaign
After identifying the most appropriate promotion activities, these activities should be scheduled and integrated. When must a specific activity take place? If you have a six-month exclusive mandate, is it wise to mail 1 000 colour fact sheets in the first two weeks? Those activities with the greatest probability of success at the lowest cost should be scheduled first. Within the light of this basic premise, consider the following:
- Your personal selling activities should be launched first. Contact your most likely target prospects first. When selling a shopping centre you may know of a specific pension fund which is keenly interested. Contact it first before deciding, for example, to mail 300 direct-mail fact sheets in shotgun fashion to other pension funds in the hope of generating new prospects.
- Your personal selling activities effort should be followed by your more general activities, such as direct mailing to selected buyer types. These activities should be undertaken only later in the campaign.
- The scheduling for contacting individual prospects and for other promotional activities designed to reach buyers will, of course, also be influenced by the response to, and success of, a preceding activity.
It is important to generate a continuous flow of promotional activities. You run a great risk of failure when your consistent flow of well-thought-out and well-directed promotional activities suddenly dries up.
People Involvement
Who will be responsible for what during the promotion campaign? In the one-man or small business a single salesperson will be responsible for most, or all, of the marketing activities. In the larger organization it will be advantageous to delegate some of the tasks to others so that the salesperson has more productive sales time. For example, the office manager could be made responsible for signboard creation and placement, while a member of the administrative staff could be responsible for the preparation and distribution of fact sheets. It is, however, essential that a specific salesperson remain responsible for overall coordination of all activities relating to the sale of the subject property.
Promotion budget
If the commission that your firm stands to earn amounts to $10 000, of which $5 000 will be paid to the salesperson selling the property, how much should you spend on the promotion campaign? Could you afford to spend as much as $5 000?
Most commercial and industrial estate agency firms have set policies governing their promotional expenses. In the majority of cases the budget is set at a certain percentage of the commission that will most likely be received. This means that the number of dollar to be spent is a function of the number of dollars likely to be earned. If this policy is being followed, calculate the potential commission to be received by the firm, subtract the salesperson’s commission, decide on the percentage of the business rand to be spent on promotion, and then allocate the available budget for the transaction to each promotional activity on a priority basis.
Some estate agencies look to the seller for a contribution towards promotional expenses, either to be offset against commission if the property is sold, or as an outright contribution.
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