CRM for Real Estate Part 1: Why CRM?

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1 CRM for Real Estate Anne Taylor Contents Introduction... 1 Typical Challenges for Real Estate... 2 How CRM can Help... 3 Conclusion... 6 Introduction Some Real Estate organizations are still asking why CRM?. Unlike other industries (pharmaceuticals and financial services, for example) where sales support and relationship management are ubiquitous, the value proposition for CRM systems in Real Estate is not well understood. This is especially odd since real estate is traditionally relationship and sales driven, built on commission incentives, has complex referral models and long sales cycles. The negotiations are complex and resulting transactions are often unique. It operates in a highly competitive environment where retention of tenants and successful sales is directly correlated to asset value and rate of return. CRM can support more than the sales function. Business relationships are managed throughout the organization across functional departments. Look to implement a system that can support and manage all business relationships. Some organizations have shied away from CRM because the high number of initiatives that have ended up in the project graveyard. Simply put, these projects were not well executed and did not consider key success criteria, which contributed to their failure. Also, given the host of technology challenges in this ever changing environment, CRM projects do not get top priority and sponsorship from senior executives. There remains confusion about what CRM systems can do and what they can t do. When you need to manage contacts, relationships and touch points with your customers, no other system is specifically designed to do this and CRM is the answer. First and foremost, CRM projects should identify and quantify the value proposition and success criteria in the implementation of a system to support the sales effort. Sounds easy, but it s not. Luckily most organizations are ripe for innovation. The convergence of access to information, cloud computing, younger sales forces, mobility and social media are creating new paradigms and pulling organizations to reconsider how they manage their business relationships. Copyright HIPERCEPT, INC. 1

2 Typical Challenges for Real Estate The Real Estate industry has unique challenges that get in the way of successful customer relationship management. 1. Multiple sources or lack of contact information Tenant, prospect, lead and relationship information is managed in multiple and isolated databases (individuals , in spreadsheets, other) or not managed at all. This makes sharing impossible and causes duplicative information which leads to administrative overhead and inaccurate business relationship information. Beyond the name and address information, relationship data is critical. Who are the key influencers and decision makers in an organization? What areas of interest do these people have? Who in my organization has a relationship with these people? What other relationships do these people have, for example brokers, banks or legal counsel? 2. No access to the CRM system/data where it is required Often relationship information and functionality is not accessible where it is required to support users. When data entry is required in multiple places (i.e. system and CRM system) time is wasted or more likely, the additional entry is not done at all. 3. Complex Pipeline & sales forecasting Real estate management is focused on short term and long term budgeting, re-forecasting and reporting against actual results. A key component of the revenue reforecast is the sales pipeline. The pipeline revenue forecast is usually a manual and cumbersome process that is not complete, accurate, repeatable or timely. Internal and external (for example JV partners) stakeholders require accurate and frequent reporting on leasing activity and revenue forecasting 4. Disparate, autonomous and independent sales forces Usually leasing professionals are located where the properties are and therefore geographically dispersed. They may also be 3 rd party brokers that are once removed from the organization. This makes visibility into key relationships, pipeline status and consolidated reporting difficult or impossible. In turn this makes it difficult to measure and monitor sales force effectiveness and reduces the opportunity for cross selling. A successful CRM implementation for real estate needs to understand and respect the concept of personal and corporate contacts and the sensitivity of centralizing managing these relationships. Balancing and ensuring appropriate access to information is key to adoption. 5. Younger sales force/younger consumers The next-generation sales force and consumer is here. They are socially networked and they are demanding more from the companies they work for and work with. They expect higher level of productivity tools and enhanced communications provided through more channels. Copyright HIPERCEPT, INC. 2

3 6. Back office systems manage complex lease & billing information Back office property management systems are designed to manage complex and detailed leasing, rent roll, ownership and accounting/operating data. They don t have have contact management capabilities or even if they do, they are not designed for front office users. 7. High volume of communication with existing tenants In property management, a high volume of communication and correspondence with tenants is required. Key accounts expect and require high level of service. 8. Complex REIT, asset management and property management relationships Tracking meaningful and actionable information about key partnerships is critical. In real estate, this includes tenants, investors, analysts, prospective investment targets, joint venture partners, vendors and property managers. Can you easily get a list of your top investors? Can others in your firm? Do you know the analysts that cover your business? Do others? When is the last time your executives met with these companies? 9. Inefficiencies due to non-standard business processes When every lease or transaction is different and the associated process to execute is unique and manual, undue administrative effort and errors occur. 10. Multiple CRM systems within an organization Many real estate systems come with a CRM module or there are departmental implementations of CRM. These are designed and targeted for one group and cannot be extended to the rest of the organization. How CRM can Help Meet the challenges and unlock the benefits that CRM can provide. 1. Centralize tenant, investor, and broker contacts in one place First, centralize contacts in one system. Categorize and segment the prospects. This seems so simple and remains one of the primary benefits of a CRM system. Upon returning from a meeting, the executive can give the business card to an administrator and the comprehensive data can be automatically available in their system and on their mobile device and to any others on the team that require it. By improving the technology in which you keep key business information you improve its quality and reduce the risk of loss. 2. Automate lead generation You can automate lead generation by importing leads from external lists. This enables the assignment of leads to leasing professional for qualification and in turn allows analysis of lead to lease conversion ratios. Key prospect data will allow you to create and manage targeted campaigns ( , direct marketing and events). Copyright HIPERCEPT, INC. 3

4 3. Mobility/ Real estate professionals are by definition mobile. By ensuring that your CRM system is tightly integrated with your system and available on mobile devices, you will get the information to those that need it, where they need it. 4. Automate and centralize Pipeline Reporting By managing prospective tenants centrally, beyond delivering the ability to more accurately track and report on status, it provides the organization with access to the pipeline to the stakeholders that require it. This creates opportunities for cross selling by sharing information across reps, regions and business units. Improving the quality of the revenue forecast is the final benefit. 5. Attract, train and retain talent/meet your prospects expectations Your sales professionals are hungry for and can fully leverage technology to support their work. They expect a robust CRM tool. When you provide one, you avoid them wasting their time creating disparate work arounds and facilitate their success. Externally, the younger buyer making purchasing decisions can easily and thoroughly access their options online and they do. They have no problem jumping to your competitor and ditching the relationship you have put time and money into. Ensure that relationship is closely and thoroughly managed. 6. Enable inquiry into back office systems data (e.g. property management system) Good CRM systems are designed for the front office using familiar and intuitive interfaces. They are often fully integrated into the system (e.g. Microsoft Outlook) which is the only system a senior executive will use. This provides the opportunity to surface key data via your CRM system for example, top 10 tenants and the sales pipeline. This type of user wants and needs graphical representation and dashboards of key leasing metrics, for example upcoming expiries and ad hoc analytics capability. CRM can provide this. 7. Extend CRM to manage operational communications with tenants Quality and service levels are impacted by inaccurate client contact information and non-standardized communication from different properties or geographies. CRM can support tenant communications such as building events (fire drills), targeted marketing campaigns and tenant services. Centralizing the supporting data and automating these activities creates a professional interface with tenants. 8. Manage relationships and key touch points with business partners CRM enables tracking of meetings, s and phone calls for reporting and follow up. Sales management can easily report on sales activities, such as last contact and upcoming activities. Copyright HIPERCEPT, INC. 4

5 9. Automate common business processes: lease approval, notification of lease expiry Users can be notified via of significant events, such as lease expiries. By automating workflow for lease approvals and getting them out of or manual processes, you have auditable and referenceable evidence of approval, adherence to policies and regulatory compliance. This also creates the opportunity to realize standardization for consistency and efficiency. Finally this enables the ability to scale when required. 10. Sustain growth/meet the competition If you anticipate growth through acquisitions or redirection of investor capital to real estate, you need increased analytics to make operating and strategic decisions about revenue targets, costs, and capital structuring. This information needs to flow through the organization in a fluid manner. The small office where everyone knew everyone and knew the key relationships no longer exists. The current environment is creating strong competition for capital and tenants. Differentiation can be created through operational efficiencies and ability to quickly deliver services (lease execution to property management services). 11. Enterprise usage We recommend the extension of CRM capabilities beyond a single department to the rest of the organization. This will let you create a 360-degree view of the business relationship. Make your CRM projects a full CRM program with phased and business driven goals. Key stakeholders are anyone that participates in the client relationship, namely Asset Management, Investor Relations, and all Senior Management. CRM allows you to know who within your organization has a relationship with someone and even when they last met or corresponded. This approach will ultimately improve client service and ensure you can accurately segment your business partners. 12. Other inputs to successful leasing In developing the roadmap for CRM, consider other inputs to the leasing process and potentially allow them to interoperate with CRM. Some examples are Business Intelligence systems, space management systems and document management systems. When a CRM user views a property or a tenant other key data such as the occupancy statistics, stacking plans, floor plans and lease documents from other systems can be integrated into CRM. Copyright HIPERCEPT, INC. 5

6 CRM for Real estate PaRt 1: Why CRM? INVESENTS INVESTOR RE TIONS Analysts Investors Fund positions Publicly traded stock positions Potential investments Acquisitions Dispositions Investment source Due diligence Fees OPERATIONS Operational contacts Tenant meetings Incident tracking Campaigns Vendor contacts BUSINESS RELATIONSHIP MANAGEMENT ASSET MANAGEMENT Tenant exposure Lease approvals Business partners Joint Venture partners Banking relationships ACCOUNT and CONTACT MANAGEMENT PIPELINE and LEASE APPROVAL (Workflow) ACTIVITY MANAGEMENT ( s, Appointments, Call Reports) Leverage 360 relationship information; Enable standardized business processes BACK OFFICE SYSTEM INQUIRY EXTERNAL DATA Financial data services (e.g. Bloomberg) Real estate data services (e.g. mondayreport) Leads LEASING FIGURE 1 ENTERPRISE BUSINESS RELATIONSHIP MANAGEMENT Brokers Legal Renewals New tenants SENIOR MANAGEMENT Senior level relationships Investor meetings Sales support ConClusIon The benefits of CRM are clear and compelling. For each benefit outlined above there is the flip side what happens if you don t achieve these benefits? You will miss the opportunity to have a better understanding of your customer and increase revenue which ultimately improves the asset value. The reality is that these processes are likely occurring in your organization but without the benefit of a system to do it better and more efficiently. Even when all of the above is well understood, there remain challenges to a truly successful CRM implementation. The next white paper in this series, due out next month, will outline how to meet the challenges and realize the vision with a successful CRM implementation. CoPyRIGht hipercept, INC. 6

7 For more information on Hipercept or the challenges met by CRM, please contact Anne Taylor at Hipercept U.S. 239 Washington Street Suite 305 Jersey City, NJ Canada 18 Haslemere Road Toronto, Ontario M4N 1X5 Colombia Calle 7 SUR # Office 209 Medellín, Antioquia Europe 130 Old Street London EC1V 9BD Australia 301 George Street Suite 1102I Sydney, NSW 2000 Copyright HIPERCEPT, INC. 7