Want to grow your earnings? You need to be more specialised

Welcome to edition 47 of The CRE Agents' Weekly. This is a LinkedIn newsletter made just for commercial real estate agents, brokers and leaders who want specific and tactical advice that will accelerate business growth and elevate motivation. Thanks for taking the time to check us out.

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Want to grow your earnings? You need to be more specialised

Most commercial real estate agents and brokers make an important decision early on in their careers that will impact their earning potential over the course of it:

Should they specialise in a segment or remain generalists in the broader market?

In this article, I make the case for specialisation being the more lucrative path.

The Case for Specialisation

1. Expert Status and Credibility

Specialists in commercial real estate often gain a reputation as experts in their niche. This recognition as a go-to expert comes from a deep understanding of a specific sector and a certain segment of the market.

When you're known for a particular expertise, clients are more likely to seek you out, trusting your insights and decisions, leading to more referrals and repeat business, and ultimately higher earnings.

2. Effective Marketing and Client Acquisition

Having a clear specialisation makes marketing more targeted and effective. Specialists can tailor their messaging to address the specific needs and concerns of their client base, which improves marketing efficiency and conversion rates.

This focused approach is less likely to be effective for generalists who must appeal to a broader audience with a more diluted message – which can often fail to land with anyone.

3. Premium Pricing

Experts command higher fees due to their perceived value and unique knowledge. Specialisation allows professionals to offer services that few others can, justifying premium pricing and reducing the ability for clients to make comparisons.

In contrast, generalists face more price competition and fee sensitivity from clients who see their services as replaceable – their fees and services are inherently more commoditised.

Strategic Specialisation in Commercial Real Estate

Choosing Your Niche

Specialisation doesn't necessarily mean limiting oneself to a traditional category like office or retail.

You can also specialise in more niche markets like the care sector, multifamily units (underdeveloped in Australia) or education, which are less saturated and ripe for growth. But that’s not the only way to specialise…

Geographical Focus

Besides choosing a sector, specialising geographically can further enhance a professional’s expertise.

Whether it's mastering the intricacies of a particular city block or a larger region, a focused geographical area allows for deeper market penetration and knowledge, which can be a significant competitive advantage.

Tailoring Services

Beyond property types and locations, specialists can also focus on particular client types or transaction sizes.

For instance, focusing on high-value transactions by serving institutional investors, syndicators or private family offices can lead to larger deals and higher commissions; servicing Asian investors within a broad value category is another segmenting strategy.

Overcoming FOMO

One common concern I hear about specialisation is the fear of missing out on opportunities outside a chosen niche.

But here’s the truth: the depth of knowledge and the network you create within a specialised area will more than compensate you for not being a generalist with a larger pond to fish in.

Moreover, specialists who dominate their niche often find that they can expand more naturally into adjacent markets as their reputation grows – conquer one territory, then broaden your horizons.

The Path to Specialisation

To start specialising, commit to learning everything about a chosen niche. This might involve extensive market research, networking with key players, and continuous education.

Over time, this dedicated approach will position you as an authority, making it easier to attract and retain clients who value specialised knowledge.

In conclusion

While generalists can navigate multiple areas, specialists in commercial real estate tend to achieve higher levels of success by becoming indispensable to their clients.

Specialisation allows for deeper market penetration, enhanced credibility, and the ability to charge premium rates.

If you’re looking to maximize your income and impact, specialisation is the right pathway on your commercial real estate journey.

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And finally…

Stop negative self-talk.

Counter negative thoughts with positive ones. Your mindset shapes your reality.

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About the author

Darren Krakowiak is the Founder of?CRE Success?and the author of?The CRE Agents’ Weekly?on LinkedIn. He works with commercial real estate leaders to accelerate growth in their business. Darren is also the host of?Commercial Real Estate Leadership.