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How To Craft The Perfect Marketing Strategy for Real Estate Developers
By Adam Gower Ph.D.
Real estate developers usually fall into one of two general categories: those who are raising capital for the first time, and those who are experienced developers looking to extract additional capital from their existing networks. In either case, having a solid marketing strategy is critical for real estate developers.
The methods by which developers used to raise capital have changed drastically over the years. Historically, most developers would start the painstaking process of building their prospect list. This may include friends and family, other members of their country club, or people from networking and professional organizations. It would also typically involve a heavy dose of cold calling to build new relationships. With this prospect list in hand, the developer would then set up one-on-one meetings in which they’d present their carefully refined pitch deck. The developer would leave a stack of materials with the prospect and then follow up a few days later to gauge their interest in investing.
To say this was a tedious process is an understatement.
Technology has revolutionized how developers market their projects. Now, through various online platforms and media, real estate developers can convey the same message to a broader audience.
It may seem counterintuitive at first, but it is actually very possible to create strong relationships with prospects online. By using tools such as social media, email marketing, blogs, podcasts and more, real estate developers can bond with more people online than they could with face-to-face meetings. It all comes down to a developer’s ability to establish trust among these people.
In this article, we provide a detailed overview of how to create a thoughtful marketing strategy for real estate developers. It starts with knowing your audience: Who’s your target demographic? What are their priorities? We then look at the ways in which to build trust with these individuals through branding, web design, paid advertising and more.
Related: 7 Steps to Raising Equity Online
Questions to ask before building a marketing strategy
Real estate developers, despite their best intentions, often create haphazard marketing strategies—if they create a marketing strategy at all. One of the unintended consequences is that developers end up spending precious time and resources on marketing techniques that fail to reach their intended audiences. Over time, it can feel like running on a hamster wheel: lots of energy goes into something without being able to show much in terms of results.
That doesn’t have to be the case. One of the best things a real estate developer can do is step back and reevaluate their marketing strategy in whole. This often requires engaging with a professional or other third-party firm that has marketing expertise. After all, most real estate developers know real estate, not marketing (and vice versa!) – though there are rare exceptions of those who know both – GowerCrowd (all modesty aside) being the perfect example of this rarified class of marketing experts.
Before getting started, whether in-house or with the support of an external marketing team, every real estate developer should ask themselves the following questions. How you answer these questions will inform the marketing techniques you deploy in your efforts to raise capital.
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What Is Your Target demographic?
How well do you really understand your target demographic? If you’re an experienced developer who has raised capital previously, start by looking at who has funded these projects. What is the profile of the investor? Are they male, female, or some combination? What is their average household income? Are they accredited investors? Where do they tend to live? For example, do they live in the area in which the project is located, or were you raising funds from far-flung investors who had little familiarity with the project location?
Today, real estate developers are using what’s known as “avatars” to describe their target demographic. For example, one demographic might be investors. Another might be developers looking for investment. Each is a different audience with different needs. A successful marketing strategy will include enough content to keep both audiences engaged.
What Areas Are You Trying to Target?
A natural place to find investors is by looking for those who meet your target demographic in the area in which the project is located. Investors are inherently more likely to invest in a deal when they have some sort of personal familiarity with it. If they understand the local economic drivers, for example, they may see the value in investing in a ground-up development project in a way that someone who lives across the country may not.
To be sure, this isn’t always the case. There are plenty of examples in which real estate developers have raised capital from long-distance partners based on the merits of the deal alone.
Where Can You Find Your Target Demographic?
Believe it or not, your target demographic is probably out there on one social media platform or another. It might not be TikTok, YouTube or Facebook. It might be LinkedIn, Instagram or Twitter. Each of these channels have millions (even billions) of users. There’s a good chance that your target demographic is active on at least one of these social media platforms, making this a great place to start when trying to get in front of new prospects.
Not convinced? Ok. Let’s think more broadly than just social media. There are other forms of digital media that investors use on a daily basis. Consider Google. People often use Google multiple times per day. Google is a great way to get in front of your audience, through search engine optimization, paid advertising and more. The goal is to produce highly targeted content that will grab the attention of your target demographic, regardless of their social media or online browsing habits.
What To Include In Your Real Estate Development Marketing Strategy
People often wonder what they need to include in their real estate development marketing strategy. Isn’t it enough to have a great website? Not anymore. At least, not if you’re a real estate developer looking to crowdfund capital for one of your projects.
A successful real estate development marketing strategy has to be multifaceted. This includes integrated branding, thoughtful web design, consistency across social media channels, organic and paid advertising and more.
The end goal is to help your company spread its message far and wide. It can take time to build out a multi-pronged marketing strategy, but in time, these efforts can be monetized with great success, eliminating your need to conduct in-person pitch meetings while raising even more capital than you did before.
Branding is a critical component to any marketing strategy. It is what allows your brand to become recognized far and wide. The most successful brands are known by a logo alone. Think of McDonald’s. A snapshot of the golden arches will have you conjuring up images of Big Macs and French fries in no time. Few real estate developers will achieve such commercial success based upon their brand alone, but that doesn’t mean they shouldn’t pay equal attention to investing in their brand.
Every real estate developer has their own way of reaching their investors, their own brand image, logo and voice. An essential part of your brand should be how you tell your story, and the value proposition that you offer across your online platform.
Content is a great way to convey your brand. Podcasts, for example, will put your personality on display. Twitter, by contrast, is a way to engage with others in the real estate community, in real-time, which shows that you’re a developer who stays at the cutting edge of news and industry trends. White papers, conversely, are a way to position your company as a thought-leader in the industry. Collectively, these efforts all help build your brand.
Real estate developers, in their quest to raise capital, will be tempted to display their projects on the homepage with a link encouraging someone to “invest now!”. But unless you’ve already built trust with your audience, few people will be swayed by the project’s marketing materials alone.
Instead, think of how your website’s design can provide more comprehensive value to your audience. Use your website to tell your unique story. Who are you? How did you get started in the industry? What are your company’s goals and objectives? There are countless syndications to invest in, so why would they want to invest with you instead of the others? Use your website to establish your differentiators. This, in turn, will help build trust.
Your website is a great way to share content, too. Content can come in many forms. Consider integrating a blog, YouTube videos, market updates and more. For example, you could use a drone to do a flyover of a recently completed project to highlight its unique features and design elements. It’s details like these that get people excited about future projects and their ability to invest with a high-caliber development partner. Your website can be a hub for all of this wonderful content that displays your company’s aptitude, thereby (once again), fostering trust.
Content creation is one of the best ways to build your brand and drive traffic to your website. This is what we like to call organic advertising, or “organic reach.” Organic reach is powerful but limited. Let’s use Twitter by way of example. You could post multiple times per day, but on average, your tweets will only make it into about 3% of your followers’ feeds. This is where paid advertising comes in.
Paid advertising is increasingly taking the place of organic reach, particularly on social media channels. Paid advertising doesn’t need to break the bank. In fact, most people begin with spending just $50 to $100 per day. Since you will have already done your homework on your target audience, you will be able to target your paid advertising effectively. What’s more, there are many tools to track your advertising engagement so you can tweak the ads as needed to have greater reach and impact. As a general rule of thumb, a $3,000 to $4,000 of ad spend should therefore translate into approximately $100,000 worth of investment in your real estate syndication. The return on investment speaks for itself.
Search Engine Optimization
Ever wonder why certain websites show up first when you search for something specific on Google? It has to do with search engine optimization.
Search engine optimization, otherwise known as “SEO,” is the practice of making specific changes to your website to help it appear higher in search engine results pages. By some estimates, the first page of search results capture up to 95% of all traffic. In other words, if your website doesn’t appear on the first page, people may never find you.
SEO takes time. It is very nuanced. For example, blogs need to be updated and tweaked every so often for Google to recognize them as “fresh” content, and websites with more “fresh” content appear higher in the search results.
Google also scans websites for certain long-tail keywords, so knowing which keywords to highlight and then weaving them into your content is key. The structure of content is also important, which means using appropriate headers, sub-headers and the like.
Given the complexity of SEO, many real estate developers will outsource this to a third-party.
Build Out A Funnel
A key component to any real estate developer’s marketing strategy is building out a funnel. A funnel is the term we use to describe the list of prospects you’re trying to reach, and the journey they are on as they come to know, like, and trust you. All marketing efforts should be intended to move people through the funnel – starting at the top, where they’re first getting to know you, to lower down the funnel, where they’re more likely to invest.
Think of the top of the funnel as those who only have a high-level understanding of who you are or what your company is all about. People in the top of the funnel may have come across your social media account, maybe they’ve visited your website once or twice. The level of trust at the top of the funnel is still limited.
Now is the time to use high-quality content to hook these people and get them further engaged. Build a relationship in order to move them down the funnel.
What does that look like in practice? Well, maybe they find you by reading one of your blogs. They liked it and thought you provided some practical advice. Maybe now you ask them to download a white paper that discusses the issue (or a related topic) in more detail. In order to download this content, they have to provide you with their email address. You can now use that email address to do direct email marketing (more on this below). At each level of the funnel, you want to be creating more value for your audience. Eventually, you will have built so much trust that they’ll want to invest in your syndicate.
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Despite what we said earlier about cold calling being part of the “old way” of doing business, we’d be remiss if we ignored it all together.
Cold calling is far from dead. In fact, cold calling (or cold emailing, door knocking, etc.) is still widely used by real estate developers. For example, a person looking to raise $10 million in equity for a new ground-up multifamily development might want to research who else has invested in nearby multifamily developments within the past 3-5 years. Those investors will already have familiarity with the local marketplace and, assuming their product has performed well, may be interested and well-suited in investing in your deal as well. You might not know these people personally, which is where cold prospecting comes in.
Of course, you’ll want to point and shoot. Be very strategic with your cold prospecting. Before making the initial phone call, do some homework in advance to learn more about this person’s other holdings. When did they buy? For how much? Have they refinanced lately, and if so, how much debt are they carrying on the property? Having this information in hand will lead to a more productive conversation.
Conversion Rate Optimization
All of the marketing efforts outlined above will be for naught if prospects never turn into leads. This is where conversion rate optimization (CRO) comes into play. CRO is the process by which your website and other marketing collateral is modified to improve the ratio of prospects converting into actual customers.
CRO can take many forms, including redesigning your website to reformatting your blog pages. Typically, CRO entails making small modifications that allow for simple A/B testing to identify which elements on the website need to be changed instead of designing a whole new website (or email campaign, paid advertisement, etc.). You may find that it’s not the layout or the design of the content that needs improvement, but rather better targeting of key demographics or geographies.
There are many tools to track prospect engagement with your online brand. By understanding your conversion rate, you can make necessary changes to your collateral to improve ROI from every traffic source and campaign you run. Ultimately, the higher your conversion rate, the better your ROI will be.
Email marketing is a great way for real estate developers to stay in regular contact with their prospects. Email campaigns can be used for a number of purposes, from highlighting your new content to providing specifics about a syndication that is seeking investors.
One of the benefits to using email campaigns is your ability to track how specific users engage with your content. You can see, for example, who opens the email, which links they click on, how far down your newsletter they read, how long they watch a video, etc. This allows you to better track people in your funnel.
If you have 20,000 people in your funnel, who are now on your email marketing distribution list, but only 100 of those people are regularly engaging with your content, you know that those are the 100 people to focus your outreach efforts on moving forward. These are the people who you’re building the most trust with and who will be most likely to convert to investors.
Creating a robust marketing strategy is no easy task. You are essentially investing in reputation development. Whenever you are asking someone to buy a product, you’re asking them to put their trust in you. This is especially true when crowdfunding capital for real estate syndications given the large sums of money involved. Therefore, real estate developers should think of their marketing strategy as a key linchpin to investor relations – a highly-skilled responsibility that must be taken seriously.
As such, every real estate developer should invest in a customized, tailored marketing strategy that aligns with their business model, audience and specific goals. The stakes are simply too high for a one-size-fits-all approach.
Just Getting Started?
If you have only just started in real estate development, have completed no deals, have no email list, but know you want the freedom and wealth being a real estate developer brings, then I suggest your first step is to start evaluating deals so you can recognize a good one when you see it.
Here’s where you should start. You’ll learn everything you need to know – the different types of real estate, different development strategies, how real estate cycles influence the market, and all about due diligence.
If you want to find deals and raise money for them so you can start your real estate development business, then learning how to conduct due diligence so you can pitch your deals better to investors is a great place to start.
Up to $20 Million in Assets
If you’ve already purchased one or more real estate project and are seeing more opportunities than you can finance, then now is the time to start building your investor network so you can finance all your next deals quicker.
You’ve already got some momentum; now start finding and educating prospects about what you’re doing so you can build an email list of people to pitch to when you’re ready to raise money for your next deal.
This is what we build for private clients all the time – it’s called the Investor Acquisition System and you can access the entire program right here so you can find prospects, and convert them into being deep pocketed, repeat investors in your deals.
If you are a seasoned pro with multi-cycle experience, a substantial portfolio, a decent deal pipeline, and find yourself spending too much time raising equity capital because you’re still doing it in-person, then it’s time you put technology to work for you.
The wonderful thing about doing this is that you’re not going to be doing anything different than you’re already doing and, guess what, you’ll never have to sit through investor meetings again.
Sounds crazy I know, but I lay the whole thing out for you in this white board workshop where I personally show you exactly what it takes for you to transform your equity raising into a fully automated, capital raising machine so you can find new investors while increasing commitments from your existing network.