Successful commercial real estate brokers (CRE) have been closing deals and maintaining their networks for years, even with limited use of technology. But as more and more sophisticated software and information services become available to the industry – and as technology adoption has increased – it is becoming clear to brokers that they need to use technology to win business, close deals efficiently and stay ahead. .
New research from Apto – the first annual “Apto CRE Broker Tech Benchmarking Survey” – measures the extent to which commercial real estate agents use technology to optimize best practices at every stage of the deal process. In particular, the survey not only measures technology adoption, but also whether brokers are fully utilizing technology in relation to these key operational aspects of their business:
- Investigating data on people and property;
- Managing contacts;
- Prospecting for buyers and sellers or tenants and landlords; and
- Manage offers.
The Apto survey, conducted in April and May, invited thousands of commercial real estate agents to report on their use of technology in their brokerage. The result? The average commercial real estate agent scored 64 out of 100 on the survey.
Is 64 good or bad?
The survey ranks respondents in their use of technology on a scale ranging from “Unstructured” to “Emergent” to “Strategic” to “Leader”. The breakpoint for Strategic in the survey is 60 and for Leader 80. The average score of 64 indicates that most brokers use technology strategically, but do not push the boundaries of what technology can do for them.
More specifically, most brokers use technology to perform manual or semi-automated tasks to increase their productivity, but are not yet using the full potential of technology to help them automate certain aspects of their business or take full advantage of them. the predictive capabilities of technology to help them identify their next one. prospect or land their next deal.
The top-ranking brokers in the survey had one thing in common: they use CRM database software. Among those respondents, the average score was 74. (Among non-CRM database users, the average score was 52.) Strikingly, even many CRM database software users were not using the full features of the technology, resulting in lower scores overall than how they would have scored.
To achieve the highest score in the survey (100), brokers had to demonstrate that they use technology not only to perform manual, semi-automated or automated tasks and processes, but to aggregate data and draw conclusions from it, or on at the very least gain insights, at a level that is essentially predictive of where their next prospect or deal may come from. Only 15% of brokers scored at the ‘Leader’ level of technical maturity in the 2021 survey, but Apto fully expects more brokers to reach that level in the coming years.
Interviews with brokers provide insight into the research results
Leading up to this year’s benchmarking survey and even while it was underway, Apto conducted interviews with brokers (customers and non-customers) to explore in a more qualitative way many of the issues addressed in the survey. , to measure. The broker interviews inform the understanding of the research results.
For example, the study’s finding that brokers use technology slightly less to identify new prospects than to manage existing contacts and leads is easy to explain. Likewise are the highest survey scores. In the case of identifying new prospects, while most brokers use CRM database technology to retain their existing contacts and leads, they seek out new leads in inconsistent ways, including through a mix of data sources, referrals, and what only old school can do. are called. pavement pounding; so they don’t necessarily use technology. Many brokers also store their contact information in a CRM database, but do not necessarily use the software functionality to automate the process of generating call and to-do lists.
Similarly, the best performing brokers collect a large amount of data and use technology to map and analyze it. They are more likely to identify their next prospect, for example by literally seeing on a map who is selling or selling a market. While most brokers use CRM database technology, only a few subscribe to services that update the data effectively and automatically.
An example of a brokerage firm operating at the ‘Leader’ level of technical maturity is a retail brokerage that integrates information about retail tenants, retail leases, retail sales per square foot, car and foot traffic, and demographics into their CRM database to look ahead. where either their retail tenant should open their next location or to identify a likely retail tenant for an available space. (Several brokers interviewed by Apto maintain CRM databases with millions of enterprise-level records and subscribe to multiple data sources, some of which are automatically updated and all of which allow them to query the data for a variety of information.)
“Technology use is maturing” among CRE brokers
Commenting on the survey findings, Tanner McGraw, founder and CEO of Apto, himself a former commercial real estate agent, said: “The use of technology by commercial real estate agents is maturing – we knew that when we took part in the survey. But the research, which is groundbreaking because it doesn’t just measure technology adoption, allows us to benchmark and track the use of technology by brokerage professionals to automate certain aspects of their workflow and to improve their prospecting and deal making. information over time.”
McGraw adds, “The average commercial real estate agent uses technology about 64% of their capacity compared to the four workflow categories we studied. We rate the score positively – this is not an A to F report card. The fact is that just 10 years ago, the average broker would probably have scored less than 50 in the survey.
“The biggest opportunities for brokers are to make greater use of the technology available today – much of which is underutilized even by high-performing brokers – and to integrate and crunch even more data to produce informational intelligence to drive the predictive harness the power of technology.”
“We will do our part to move the industry forward, including helping brokers realize the full capability of Apto technology and measure broker technical maturity in the future.”
How do you rank against best practices and your colleagues? Hold on! Soon you will be able to complete the survey yourself to find out. In the meantime, don’t forget to download our ebook, The maturity model of commercial real estate technology.