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Prospecting for fun and profit.

Prospecting for new tenants can be great fun when you think of it as an adventure. You are out of your office and away from your center. You are exploring new territories and revisiting some familiar old friends. You have an opportunity to see the very newest products, fashions, and store designs. An added benefit of prospecting is that it helps you to position your center in the marketplace.

Through prospecting, you can teach yourself about retailing by observing how retailers merchandise, display, and sell their goods.

Prospecting also lets you meet people in their own environment. Most people like what they do and like to talk about it. So ask the shopkeepers about their stores, and use the knowledge you acquire to help your own tenants. Remember, you have paid the retailer a compliment simply by visiting his or her store.

The very first idea you must accept is that the primary purposes of prospecting are to meet retailers, to interest them in your center, and hopefully to set up an appointment at your center. You are not attempting to write a lease, so do not sell. Try not to discuss rent rates or occupancy charges before the prospect is at your center, because:

* If the prospect does not want to move to the center, the cost is inconsequential; he or she wouldn't take the space if you gave it away.

* If the prospect does want to move to the center, you can usually work out the occupancy charges.

Setting goals

All of us should be prospecting every day, but where do you start? Set a goal. As a manager who leases, I try to be out on the street knocking on doors four days a month.

I try to prospect by telephone at least one hour a day. I do not let myself go home if I have not talked to or visited one new tenant each day. A bare minimum of five new retail contacts each week times 50 weeks equals 250 new retail contacts per year.

Sources of prospects

The best prospects are existing tenants, both in your particular center and in your company's other centers.

All existing tenants should have a current leasing brochure. I often ask my existing tenants to pass the leasing brochure on to someone they think would be successful in the center.

While I have never paid an existing tenant a lease commission, I have bought tenants briefcases as an acknowledgment of the role they may have played in securing a new tenant. Other centers have offered existing tenants cash incentives for helping consummate lease deals. Some centers offer rent credits.

Everyone from the Chamber of Commerce to the Elks, Lions, and Rotary can be useful sources for leads. The problem, of course, is time. No one has time for all these meetings. However, you or your center can pay dues, be members in good standing, have a listing or ad in the organization's book. Membership allows you access to and a commonality with other members. You can use this bond to start or maintain conversations.

Every tenant in every center within five miles should know your center exists and know you are an active player in the market.

This is not an easy task, but it can be accomplished with a combination of cold calling, direct mail, local ads, telemarketing, and word of mouth.

Often local publications are less expensive than big city newspapers. Instead of a want-ad, try a box or tombstone ad. Remember, it is never "space available"; it is always "retail or office opportunity."

I am a big believer in mailing lists. They can be bought from one of the mailing list houses. However, be prepared for a large number of returns due to changes of address. Or you can sit down with the phone book and call or send brochures to all the retailers in a particular category. One consummated lease justifies an expensive direct mail campaign.

Prospect at the neighborhood stores and shops you patronize near home. I live a long way from the centers I lease; however, my barber, pharmacist, and all the local grocery stores and restaurants I patronize know I am in the shopping center business. I have yet to make a deal in one of my centers with these local merchants. However, they keep me posted on the local economy or their industries.

Sometimes these people will know personally or by reputation the people with whom I am negotiating. Some have called on me when they need their questions answered, which is fine with me. They are associating leasing shopping center space with me.

I frequently canvass flea markets. I only pass out my business card to those people I think could be a shopping center tenant or a seasonal kiosk tenant.

Tips of prospecting

Different situations require different approaches. A Chicago-based retail broker I know never wears a jacket or tie when canvassing in Wisconsin. He claims a suit is a barrier and always canvasses in casual clothes. He never carries brochures either, only business cards. Then he returns after a certain level of interest has been established.

One of the women in our organization who is a leasing representative told me she feels being a woman is a definite advantage because many retailers assume all women are experienced, smart shoppers. And female leasing representatives are automatically infused with this knowledge.

Usually I canvass in a jacket and tie and carry a briefcase filled with brochures. As there are not that many men in suits with briefcases at shopping centers in the middle of the day, I attract immediate attention.

I start off with a sincere, specific compliment: "The window display is eye-catching." "Your displays are unique." "That piece of merchandise is beautiful. Is it selling well?"

If I cannot think of a genuine compliment, I usually say "I'm from Arlington Annex. How's your business?" Chances are you will not receive an accurate answer at this point, but that is not important. All you are trying to do is start a conversation.

If you establish early on that there is not a good fit, leave a brochure for the retailer to pass on to friends, and move on. Sometimes, the owner will not be in the store, but I have found store managers and long-time employees to be very conversant about the store, the business, and their industry. The store owner's name is important as is how you can reach him or her. Be sure to get a phone number and address.

Keep the conversation retailer-oriented. No one cares what your name is. Always display interest in the merchandise. Look at the quality, the labels, the prices, the presentation. Keep asking questions:

* "How's business?"

* "When are you busiest?"

* "Who are your customers?"

* "Where do your customers come from?"

* "What sells and what doesn't sell?"

* "Who's your competition?"

Volunteer information at this point. What's true for your center may not be true for this particular retailer.

Sometimes I will not get to first base. I have been thrown out of shops, but if I like the store, I will continue to pursue it.

I find prospecting in the morning more productive than the afternoon because there are usually fewer customers around. I rarely have luck on Fridays, as retailers seem preoccupied about the coming weekend.

Never interrupt a sale. If need be, just leave your card or brochure, and return later.

In conclusion, expect 100 "not interested" responses for every prospect who shows interest.

Pick up a business card, record every tenant's name and address, and add them to your own personal mailing list. Over time, many people will go out of business, so purge the list after every mailing. This is my preferred list, and I keep these people informed regarding new developments in the center, new leases, and promotional events. Sometimes I even send out a sample of our recent advertising efforts.

These retailers remember the shopping centers, and they seem to appreciate being kept up to date. They may not be a prospect today for the center you are working on, but they may be a prospect tomorrow for another center.

Showtime

The great adventure of prospecting has been successful, and you have an appointment to show space. The prospect is now on your turf and it is showtime: the moment to use all the theatrical elements inherent in retailing and the shopping center business.

If you think of your center as a theater, you will quickly realize that, just like the latest production, your retail production already has had reviews. Is it the crowded one--a box office smash? The empty one--a bomb? The one that went into foreclosure--a flop?

These preconceived ideas and attitudes will partially determine how you show space. Hopefully you have been able to identify these attitudes before you begin showing space, so you can respond appropriately. The entrances, landscaping, and parking lot all have to be in good condition or at least not distracting.

The stage

The area of the center you will show your prospect is the stage, and the store you are showing is the main attraction. It is important the area be welcoming:

* Broom clean.

* Walls in good condition, painted if practical.

* Ceiling tiles repaired (especially if damaged by roof leaks).

* Windows washed.

* Utilities operating.

* Adequate floor covering. (If the old carpet is really terrible, pitch it.)

* All lights working. If possible, I try to have the space open and lights on when the prospect arrives. After all, it is showtime.

I have, on occasion, had professional signs made and installed in the space or in the windows that read "Loehmann's Plaza Welcomes Mr. and Mrs. Jones." This is grandstanding, admittedly, but the prospective tenant enjoys seeing his or her name or store's name in print and is impressed you went to such trouble. These signs cost about $20.

If you have a message center on your pylon, this is an even better location for a sincere welcoming--just like a theater marquee. Consider having a canvas "Grand Opening" banner made and putting it up when you show the space. Tell the prospect he or she is welcome to use the sign for opening.

Always walk the prospect out into the parking lot and to the sidewalk to see how the store will look and to allow a view of how many cars (and how many people) will see the sign every day.

The cast

Each role in your leasing performance must be identified and properly cast.

Your role as leasing agent is probably the most important, but it must be a role so well played that your part is almost unnoticed.

You are the narrator, the voice that weaves the disparate elements into a whole story. If your performance is well done, the most memorable aspects of the visit will be the center and how the retailer will prosper in this particular environment. Keep the spotlight off you and on the retailer and his or her new store.

Your initial dialogue should be geared to having the prospect visualize him- or herself in the store.

* Where would you put the cash wrap?

* Could you use this carpet or do you need new?

* What color scheme would you use?

* How many rounders could you fit in here?

* How many units of merchandise would this store require?

* Do you have an architect or designer you usually use? If not, our architect will meet with you to sketch out a plan.

Refer to the space as "your store," thereby transferring possession of the store from you to the prospect. De-mystify the store. Explain the electrical service. How about the lighting? Is there track lighting installed that will help set off the merchandise?

Talk about the HVAC. Is it adequate? Can you warranty it for a year? If it is inadequate for that tenant's needs, identify the problem early so that both of you can solve it together.

The more comfortable the prospect is with the store, the better. It is your job to make sure the prospect sees just how brilliant and dazzling and successful this new store will be.

All the efforts, focus, and spotlights are directed on this new unique entity in the unique environment--the new star of the center.

The most important supporting characters in your leasing show are the existing tenants in your center. Try to introduce prospects to at least a few of the existing tenants. If your prospect is truly interested in the center, he or she will visit it many times independently. By introducing a prospect to your current tenants, you have established an "on-site" contact and encouraged a warm, cooperative spirit. Retailers will talk to one another anyway, so your making the introductions gives you some control.

In order for these introductions to work to your advantage, you have to have good working relationships with your tenants. Visit tenants regularly, and keep them up to date on what is happening in the center. Remind tenants regularly to be upbeat when prospects are around.

Subtly give your retailers the right dialogue:

* "We are up over last year's numbers."

* "We had a great July; we broke all records."

* "Traffic has been good."

* "We expect a strong Christmas."

* "I am glad the road construction that blocked entrances is over."

* "That new stop light certainly made the center easier to get into."

* "We're above industry averages."

It is up to you to make your existing tenants aware of the important role they play in leasing and how important their observations are to retailers unfamiliar with the market or your center.

With your prospect, talk about synergy with the other tenants; talk about the fraternity of retailers; talk about the existing ad budgets of the co-tenants.

If you have nationals such as K Mart, Radio Shack, Kinney, Lerner, or Hallmark, then millions of ad dollars are being spent every year to bring customers into your center--before your prospect has spent a dime promoting his or her own store.

Other supporting players can include the members of the Chamber of Commerce, the mayor, and civic leaders. Recruit these people to be an active and integral part of your production. Introduce them to your prospect, and make sure they know their proper dialogue.

Perhaps the Chamber of Commerce has business meetings that could benefit your prospect, or possibly a business mailing list your prospect could use at little or no cost.

The extras

Customers are the cast of thousands in your production, and it is wise to set up appointments to show space when the center is busy. While early morning appointments may be convenient, there is no one in the stores and few cars in the parking lot. I much prefer mid-day when the business people are out eating lunch or after five o'clock when people stop to shop on their way home from work.

Another great time to show space is during a sidewalk sale or promotional event. You can, of course, draw customers into your production by engaging them in conversation concerning the center. Bag-carrying customers are the best bet because they just bought something. Ask them for their zip code, what they like about the center, what new stores they would like to see.

I recommend you do this in front of your prospect. The results are often enlightening. The fact is that customers are your most important critics and you can learn from them.

In the past, I had movie theaters in one of my centers, and I knew the times the movies ended. I would arrange to be standing with the prospect in an area where we would be engulfed by the wave of people leaving the theater. This crowd helps create and reinforce strong, positive feelings about your center.

Dropping the curtain

As with any good production, you have to know when to end the showing. Hopefully you have been successful in telling your story. Most importantly, remember you are not selling bricks and mortar. You are presenting the opportunity to make money. You are giving the prospect the opportunity to build a business. You are offering the trade area.

Your center is the theater, and the store is the stage the prospect needs to showcase his or her starring goods and services. Your brochure is the playbill your prospect takes home. You will know your reviews are good when you secure a signed lease.

A version of this article appeared in the February/March 1992 Andrews Report and is reprinted with permission.

John J. Fegan, CPM|R~, is divisional vice president of Harold Carlson & Associates, Inc., a Draper and Kramer company in metropolitan Chicago.
COPYRIGHT 1992 National Association of Realtors
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Fegan, John J.
Publication:Journal of Property Management
Date:Nov 1, 1992
Words:2780
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