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Friday, August 28, 2009

Are Real Estate Companies Starting to Embrace CRM?

Jim Young has written a nice article on the Realcomm Advisory asking whether a bad economy can positively impact Real Estate IT spending. It’s definitely worth a read and parallels my own thoughts and experiences in the world of CRM and commercial real estate, especially lately.

Having a few grey hairs ourselves - muddling through the “dot-bomb” of 01-03 and now “whatever-they-will-call-this” of 07-present, setting everything else aside, it has been interesting seeing how real estate companies have responded to these conditions. In early ’07 and before, as a CRM solution provider we came across two types of prospects: those who were doing so many deals they didn’t need nor want to slow down to address internal systems, and those who had to because of external factors (usually regulatory) and had big budgets to do it.  Neither made for an ideal environment for a new CRM system, as the change agent was usually external. Successful CRM must come from an internally driven mandate.

Now the rules have changed in a big way. Talent is walking out the door (for many reasons) and the organization’s corporate memory with it. Those still in place are finding they have to do more with less. Brokerage and service companies are being held to a higher standard by their customers as they have to actually deliver on the promises they made when landing the customer. Property owners are working hard to reduce tenant churn. We’ve even seen the end users (brokers/agents) jump on management and ask for better systems that address inefficiency and communication roadblocks.

When the change agent comes from within, as it seems to be trending, it is much easier for a CRM solution provider to do business. Our client is now more focused on the end user and their end customer in terms of system design and requirements. The end user is more open to the culture change of information sharing and the factors for success are much more measurable. The only thing missing from the equation in this new economy is, as I’m sure you can guess: money.

When recovery comes to commercial real estate, it will be just as interesting to see how they respond. Will companies finally address their customer relationship management systems, or will it return to being about the deal? I believe it will be the former.

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