Note: Apto was acquired by Buildout in January of 2022. More details can be found here.
Successful commercial real estate (CRE) brokers 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 have become available to the industry — and as tech adoption has increased — it’s become clear to brokers that they need to adopt technology to win business, get deals done efficiently, and maintain their leading edge.
New research from Apto (now Buildout CRM) — the first annual “Apto CRE Broker Tech Benchmarking Survey” — measures the extent to which commercial real estate brokers are using technology to optimize best practices at every stage of the deal process. Notably, the survey doesn’t just measure tech adoption, but whether brokers are using technology for its full benefit relative to these key operational aspects of their businesses:
The survey, conducted in April and May of 2021, invited thousands of commercial real estate brokers to report on their use of technology in their brokerage businesses. The result? The average commercial real estate broker scored 64 out of 100 on the survey.
The survey classifies respondents on a scale ranging from “Unstructured” to “Emergent” to “Strategic” to “Leader” in their use of technology. The breakpoint for Strategic in the survey is 60, and for Leader is 80. The 64 average score indicates that most brokers are using technology in a strategic way, but not pushing the limits of what technology can do for them.
More specifically, most brokers are using technology to perform manual or semi-automated tasks to boost their productivity, but are not yet using tech’s full potential to help them automate certain aspects of their business or fully utilizing tech’s predictive capabilities to help them identify their next prospect or land their next deal.
The highest scoring brokers in the survey had one thing in common: They are using CRM database software. Among those respondents, the average score was 74. (Among non-CRM database users, the average score was 52.) Notably even many CRM database software users reported not using the full functions of the technology, which lowered their scores overall relative to how they would have scored.
To achieve the highest score in the survey (100), brokers had to demonstrate that they use technology not just to perform manual, semi-automated or automated tasks and processes, but to aggregate data and draw conclusions from it, or at 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 tech maturity in the 2021 survey, but Buildout (formerly Apto) fully expects more brokers to reach that level in coming years.
Leading up to this year’s benchmarking survey and even as it was under way, Apto (now a part of Buildout) has been conducting interviews with brokers (customers and non-customers) to measure in a more qualitative way many of the issues addressed in the survey. The broker interviews inform the understanding of the survey results.
For example, the survey finding that brokers use technology somewhat less for identifying new prospects than for managing existing contacts and leads is easily explained. Similarly are the highest survey scores. In the case of identifying new prospects, while most brokers use CRM database technology to maintain their existing contacts and leads, they source new leads in inconsistent ways, including through a mix of data sources, referrals and what can only be referred to as old school pavement pounding; thus, they’re not using technology per se. Many brokers also store their contact information in a CRM database but don’t necessarily use the software functionality to automate the process of generating call and task lists.
By the same token, the highest performing brokers aggregate a voluminous amount of data and use technology to map and analyze it. They’re more likely to be able to identify their next prospect, for example, by literally seeing on a map who’s buying into or selling out of a market. Also, while most brokers use CRM database technology, only a few subscribe to services that effectively update the data on an automated basis.
One example of a brokerage firm operating at the “Leader” level of tech maturity is a retail brokerage that integrates into their CRM database information on retail tenants, retail leases, retail sales per square foot, car and foot traffic, and demographics to see ahead to where either their retail tenant client 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 records at the enterprise level 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 intelligence.)
Commenting on the survey results, Apto Founder & CEO Tanner McGraw, himself a former commercial real estate broker, says: “Commercial real estate brokers’ use of technology is maturing — we knew that going into the study. But the research, which is groundbreaking because it doesn’t just measure tech adoption, allows us to benchmark and track brokerage professionals’ use of technology to automate certain aspects of their workflow and to inform their prospecting and deal-making over time.”
Adds McGraw: “The average commercial real estate broker is using technology for about 64% of what it’s capable of relative to the four categories of workflow we studied. We view the score positively — this is not an A through F report card. The fact is, as recently as 10 years ago the average broker probably would have scored below 50 on the survey.”
“The biggest opportunities for brokers are to more fully leverage the technology that is available today — much of which is underutilized even by high-performing brokers — and to integrate and crunch even more data to produce informative intelligence to harness technology’s predictive power.”
“We’re going to do our part to help the industry move forward, including by helping brokers realize the full capacity of Buildout technology, and measure brokers’ tech maturity going forward.”