For every marketer in real estate business, it is essential you do a prospect analysis to be sure of the amount of time and effort you may want to invest on your client, that’s if you will invest at all.
To successfully market a product or service, be it real estate or otherwise, it is important to identify where and who your target market is. Two key elements of your target market are the purchasing power of who you are talking to and the income levels of your target market. Like I will always tell our marketers; they must make certain that the individuals they are introducing their products and services to can afford such if they do not want to be perceived as being on a wild goose chase.
However, if a person cannot afford your products and services, it doesn’t entirely rule out the possibility that the person could still be consequential to you. The person may help in the aspect of giving you links, which may come in trickles or multiples, depending if lady luck smiles on you.
Also, the appearance of a prospective client should not serve as your yardstick of measurement when it comes to knowing who a potential client is. Like the saying goes; You don’t judge a book by its cover.
Albeit, as you advance further in your career, what should serve as a determinant for your target market are well laid out and strategic questions that will give you an insight into the financial capacity of a prospective client. These questions should be at the tip of your sleeves and should be the core of your marketing lay-out.
I will run through the questions that should arise in determining the financial worth of your prospect or better still, the excess or extra income available to your prospect that will prove he/she can afford the product or service you are offering.
For the purpose of this discussion, lets look at this scenario; if you have a product that requires your prospect to pay N100,000 monthly as payment plan for a couple of months before he/she can acquire such product, you should be able to ask somewhat off-beat questions that will guarantee the potentials of your client. You should be able to make your prospect go through a question and answer session that will reveal details of his financial capabilities and social status. The following questions should come handy during your assessment:
1. Who is your prospect?
2. What kind of industry and company/organization is your client attached to?
3. What is the position and portfolio of your client in his organisation?
4. What is his work level as compared to the payment structure in his organisation?
5. You should also be able to establish his take-home pay which can be obtained randomly by juxtaposing his organization’s worth and staffs’ pay package.
6. The position of your prospects’ organization in the industry when it comes to Staff welfare and best paying companies should come under radar too.
7. Also, another thing you should put into consideration after analyzing the afore-mentioned questions is the frequency of payment in your prospect’s company and the nature of payment.
8. You also need to find out if the salary structure is tied to performance or if it is a guaranteed payment i.e is the pay based on commission or the salary is only tied on performance?
9. If your prospect is then a sales person it is essential you find out his ratings in his said company; Is he a high flyer or just someone that struggles with his job
10. You may also want to get answers bordering around your client’s wife, if he’s married. The questions should also hover around the one you asked your main client. Getting answers for some of the questions asked earlier would probably make you rest assured that you have a worthy contributor to the product you are offering which could possibly make her a positive net contributor. Albeit that depends on the aggregation of funds and full financial transparency and disclosure between the couple. If the partner spends her income on herself alone then that would make her a negative net contributor. Having done your research on the financial worth of your client’s partner and the financial relationship between then you can now present your product as a joint acquisition they can both make rather than leaving it to one person who may as well struggle to acquire it.
Other questions that may arise in the course of getting acquainted to the financial worth of your prospects(couples) includes;
11. a) Their present location, b) the rent rate, c) the kind of school their children attend (if any) d) their school fees, e) the kind of car they drive;Is it an official car or private or is it a combination of both? f) do they have domestic servants of their own? g) Is their kind of lifestyle fake or is it something that reflects their true financial status? h) do they travel for vacation? If yes, then where do they go? Outside the country or within their comfort zone? How often do they travel by air? i) You should also be able to find out about their social status; you may want to know if they belong to a cooperative or have another means of saving money or making contributions asides the savings they make in their respective banks, j) You will also need to find out if they are in a cooperative society where they can assess loan.
Read also: Knowing your market – Debo Adejana
If you put all these together depending on the responses you get, it should help you determine the financial worth of your prospects and if really the product is meant for them. Invariably it helps you identify and assess the kind of person you are involved with and his/her importance to the furtherance of your trade.
By way of analogy; if you sell a product that will require your client to pay a sum of N25,000 monthly, you have to also realize that there are some basic expenses an average human being will incur in a month. For instance, it is estimated that the house rent for an average Nigerian will gulp between 40-70% of his income. So, depending on where he stays you can always net that off.
Again, lets say feeding and other miscellaneous expenses will take about 25% of his income then other unforeseen expenses now arise. With these in mind, if a person earns N300,000 monthly, from the deductions we stated earlier, lets say you take out about 70,000 – 100,000 for accommodation, another 100,000 for upkeep and other miscellaneous expenses.
From the analysis, you would realise that the person would be left with about 100,000 or less as excess fund and that’s if he turns out to be a disciplined person. This means that he will be stretching his limits for a while to be able to afford a product that requires he makes a monthly payment of 25,000 or 100,000 naira for a specific period of time.
UNESCO agreement states that, every individual shouldn’t spend more than about 33.3% of their income on their rent. If you are to go by that standard and obtain the net-worth of income after juxtaposing against their rental value, feeding expenses and other extraneous expenses, you would then realise that an average person is left with 10-30% of invest-able funds from their regular income, assuming you know what they earn.
By carrying out these practices judiciously you would have successfully analysed your clients’ worth. This will ensure that you avoid wasting time and effort on a client that has no business with the products or services you are offering, especially for clients who tag along because they don’t know how to say no.
However, like I mentioned earlier; take cognizance of the fact that you don’t judge a book by its cover.
Nonetheless, as you continue in your practice, you will get better and it will become easier for you to streamline your clients and their potentials for your business to flourish.
MD/CEO Realty Point Ltd