Conversations with Amit-Lead generation and conversion in the Leasing sector
Conversations with Amit-Lead generation and conversion in the Leasing sector Hey Amit! You generate 3000 leads annually at the rate of 10 inquiries per day. Then why do you lease…
Hey Amit! You generate 3000 leads annually at the rate of 10 inquiries per day. Then why do you lease just 1 shed every week?
I accept that it’s a great achievement to do a transaction every week but can you please tell our viewers about the challenges that you face in leasing
Well! There are so many lead sources – offline and online. Though the lead quality is generally better offline even if they are few in numbers . On the other hand online leads give us loads of leads but the quality is poor especially on certain platforms where the audience is not focused/ targeted on that platform . Let’s discuss the common challenges faced in the Real estate industry when it comes to lead generation .Its important to do so,as that it will decide the time and resources that you allocate on it
- Firstly let’s look at the various levels of leads – hot leads, warm leads, cold leads and most commonly junk leads .
- Secondly, There are Research leads – In this case people are trying to gather market information and pose as some enquirer ,such leads take a lot of our time while giving no direct tangible result to the company.
- Thirdly, There are inquiries which are done to justify one’s salary or role in the company – Certain staff in the guise of proposing to the company and attempting to do cost-cutting pose as genuine clients. They show a cost saving to their company and justify their roles and salaries
- Fourthly, There are Companies trying to gather market information posing as tenants and buyers. They approach us with keen interest , move the transaction to negotiation and then to the closure level so as to be able to access the negotiation term sheet which they can use for their existing leases in their existing facilities . These waste the maximum time .
- Fifthly , There are leads from competitor – in these leads other companies (brokers) offering similar services post enquiries to gather data from us that they can skim the data and use it for their clients
- All these are in connection with various types of leads. Once we sieve through all these ,we reach genuine leads .There are issues with genuine leads too. Let me explain that as well there are
- Wrong financial expectations – tenant wants lowest and landlord wants highest rentals and this often leads to spending a lot of time to close a transaction. Both parties have to be brought to a common meeting ground to finalize the terms and conditions.
- Differences in financial terms in different cities of India – Sadly, there is no standardization of financial terms in any 2 cities in India – while in the northern cities including Delhi offer properties at one month’s rental as a Security Deposit, Mumbai gives it at 3 months rental, Bangalore works at 6 months rental But in Chennai, landlords are traditionally used to receiving 10 months rental as a security deposit. This becomes difficult to convince as the interest cost adds up and the viability reduces. Similarly Chennai is also the most expensive market along with Pune for warehousing properties.
- Compliances – more than 90% of warehousing sheds do not have Fire NoC`s and do not have CTEs and CTOs – they are also built in a manner where these compliances can never be obtained
- Approvals and plan sanctions – we find that 90% of sheds built prior to 2018 do not have building approvals. In fact most of them have been built on land that is not zoned for warehousing and industrial – even the CLU (change of land use) is not done .
- Time lapse/ delays – Clients close negotiations and then take time to sign the contract and delay the process. They have multiple matters to time as like not to lose on rental and delay occupation, possession and signing to minimize rental wastage which causes a lot of disturbance to landlords.
- 3PL issues – Third-party logistic companies have to find space and then quote to their clients on a consolidated basis for all services – multiple 3PL companies bid for a property and thereby many properties are blocked while just one of them will get the contract – 9 our 10 3PL companies lose the bid and thus the wasted effort is very high while working for such clients
These broadly are the main challenges in leasing and I have summarized these as the main reasons for a transaction to fail