Why more leads won't always grow your agency

CRE Success Principle: Find the stage in your pipeline where you’re losing deals before asking your team to double down on prospecting.

When revenue is below expectations, the instinct for many commercial real estate principals is to focus on generating more opportunities.

More marketing. More leads. More prospecting.

But what if generating opportunities is not the biggest lever to drive more growth?

In this episode of Commercial Real Estate Leadership, I explore the other two parts of the pipeline: Qualify and Convert.

Qualify the Right Opportunities

Treating every enquiry with the same level of time, energy and follow-up can create a capacity problem.

For enquiries, I recommend using BANT: Budget, Authority, Need and Timing. If one of those elements is clearly missing, it should influence how much effort your team invests.

For potential listings, you can use these three questions:

Is it real?

Can we win it?

Do we want it?

These questions help protect your team's capacity for opportunities that are genuinely worth pursuing.

Track Where Deals Get Stuck

The next challenge is conversion.

Rather than simply tracking listing win rates, I recommend measuring conversion between each stage of your pipeline:

Qualified opportunity.

Proposal or pitch.

Listed or on the market.

Offer stage.

Deal closed.

When you track conversion this way, the weak point in your pipeline becomes easier to identify.

You may not have a lead generation problem at all. You may be wasting time on poor opportunities or losing good deals somewhere in the process.

The key is identifying the real constraint before trying to fix it.

Listen to episode 285 of Commercial Real Estate Leadership to learn how to strengthen your pipeline through Generate, Qualify and Convert.

Episode transcript:

Different principals have different problems.

One principal I'm thinking of right now had a team that was generating plenty of leads.

Prospecting was happening, referrals were coming in, inbound was being followed up appropriately, but revenue still wasn't where it needed to be because generating opportunities was never the constraint in this principal's business.

Something was happening, or maybe I should say not happening, after the opportunities had been generated, and that's what today's episode is about.

Welcome to episode 285 of Commercial Real Estate Leadership. My name is Darren Krakowiak. I'm going to be your host today, and I help commercial real estate principals to build an agency that can run without them, so they've got the choice to work on or off the tools.

Now, last episode, we covered the generate portion of pipeline, the four main channels for bringing opportunities into your commercial real estate agency.

Today, we're going to look at the other two parts of the pipeline topic, qualify and convert. We're talking about what happens after the opportunity has been created.

And there's something I see fairly constantly, and it's a team that is treating every single inquiry with the same intensity, same follow-up, same energy, same amount of time invested, whether it's a genuinely serious opportunity or if it was someone who was never really going to move forward.

Now, that can feel like good service or consistent practice, but it is actually a capacity problem in disguise because every hour that you and your team are spending on a lead that was never going to close is an hour that you're not spending on one that would have.

So, in this episode, I'm going to give you two ways to qualify properly.

The first way is BANT (Budget, Authority, Need, Timing).

So, we'll use a tenant inquiry as an example for this framework.

Budget. What's their current rental? What are they actually able to spend?

Authority. Are they the decision-maker, the person you're talking to, or is there somebody else who needs to be involved?

Need. What is actually driving this? Are they expanding, contracting, dealing with a lease that's expiring? Do they have a real need?

Timing. Are they really ready to move now, or are they 18 months out and just having a look?

All four elements of BANT need to be present in order for a deal to happen. And if there's one that's clearly missing, that might be a signal which tells you how you should be allocating your effort to that opportunity.

Now, the second qualifying filter that I'd like to tell you about is specifically for when your team is going after listings.

And this is just a three-question filter. Is it real? Can we win it? Do we want it?

So, ‘is it real’ is about if there is an actual seller or landlord who's ready to transact, or is it someone who's just kicking tires or testing the market with no real intention?

‘Can we win it?’ Do we have a genuine chance, or are we just one of four agents being used to create competitive tension with no real shot?

And ‘do we want it?’ Is this in our patch? Is the fee attractive, and is it the kind of stock that we can deliver a good result on?

If the answer to any of those three questions is ‘no’, that's a very useful signal that going after this listing may not be where your team should be spending their time.

Now, none of this is about being harsh. It's just about protecting your team's capacity for the right opportunities.

So, we've covered qualify. Now it's time to talk about the convert component of the pipeline topic.

Because a lot of agencies that I look at have no real pipeline stages. Deals are either in motion or they're not, which means that when I ask a commercial real estate principal where it is that revenue is getting clogged up in their pipeline, they often can't tell me.

So, there's a few stages that you'll recognize that I'm going to run through now, and you might want to start tracking these.

We'll call them five stages: qualified opportunity, proposal or pitch, listed or on the market, offer stage, deal closed.

So, a qualified opportunity is anything that's passed through the filters that we've just talked about: real, winnable, and wanted.

Proposal or pitch is where you're actively presenting your case to win the business. You're submitting a proposal. You are pitching for the business.

Listed or on market is once you've won it and it's out there being marketed, whether it's on market or off market. You're presenting it potentially to buyers and to tenants in the marketplace.

Offer stage is when genuine interest turns into an actual offer that is on the table.

And the deal closed stage is exactly what it sounds like. That's when the revenue comes in the door.

Now, here's why these matters.

Some agencies track their listing win rate, like how many pitches turn into listings, and that number doesn't necessarily tell you where the real problem in your pipeline is.

What you want instead is the conversion rate between each of those five stages.

So, how many qualified opportunities become a proposal? How many proposals do you win? How many listings generate a real offer? And how many of those real offers that you're generating lead to a deal being done?

I think when you track it that way, the weak point becomes obvious.

Maybe you're winning plenty of competitive pitches, but losing a lot of deals between the offer stage and closing, which might tell you the problem is in negotiation, including how you're managing the vendor and also communicating value to buyers.

The problem there is not an actual winning listings problem.

You are converting at that stage, and that's a completely different fix than if the drop-off was happening somewhere else in the pipeline.

And when a listing is lost or it doesn't turn into a transaction, we want to make sure we're doing a real postmortem, not a five-second, "Oh, well."

We want to know what stage did the deal die at? What was the underlying cause? Was it something that we could have controlled?

That discipline, done consistently, is what can improve conversion rates over time and ensure that when you generate an opportunity, a greater proportion is turning into revenue in your business.

Most of your agents probably just move straight on to the next deal and never look back. That's the type of pipeline discipline, even after deals have died, that we want to have in place.

So, look, across these two episodes, we've covered the whole system of pipeline. We've looked at generate, the four channels for bringing opportunities in.

We've talked about qualifying opportunities, making sure that you and your team are spending time on the right ones.

And we've talked about conversion, that is advancing opportunities properly through the defined stages in your pipeline.

So, there's a question I want to leave you with. Of these three: generate, qualify, and convert, which one is actually a constraint in your business right now?

Most principals, if you asked them that before listening to these two episodes, would have said, "Well, it's probably generate. We probably just need to get more leads in. We need to do more prospecting. We need to do more marketing."

That's almost always the instinctive answer. But in my experience, it's not always the real constraint.

Plenty of agencies are generating lots of opportunities and either wasting time on the wrong ones or losing good ones somewhere in the process because there's no real visibility into where deals are getting stuck.

So, I want to encourage you to actually sit with that question rather than just assume you already know the answer because the fix looks completely different depending on where the real constraint is.

And most commercial real estate principals are often trying to fix the wrong one if they're actually trying to fix it at all.

So, that's pipeline: generate, qualify, convert, the three systems working together, not one lever to pull harder.

Next episode, we move to the second pillar, which is people.

Hiring, developing, and retaining, including the specific one-on-one approach that I recommend my clients use.

It's the one that I used over my commercial real estate career to keep your best agents and help them to perform better.

Now, if you've worked out which of the three elements of the topic of pipeline: generate, qualify, or convert, is genuinely your constraint, I'd love to hear what it is.

You can find me on LinkedIn. Send me a message, Darren Krakowiak, and I will respond to you personally.

That is our episode for today. Thank you so much for listening, and I will speak to you soon.