Case History: Real Estate Merger Could Lead to Newsletter Growth

Chris Carmen fell into the e-newsletter business. But he’s not looking to get out of it any time soon.

Carmen owns Carmen Commercial Real Estate, a commercial real estate and consulting business. He began collecting e-mail addresses in 1995 for his customer database.

But he wasn’t quite sure how he would use them until the founders of ExactTarget approached him looking for venture capital to start their company. He didn’t invest—but he bought their system and began shipping e-newsletters in 2001.

Due to the transaction-oriented nature of commercial real estate, big-ticket projects can occur only once (or once every few years). The challenge is maintaining a presence in the client’s eyes for return business or business referrals.

“You engage with a client for a project and when you’re done the marriage is over,” Carmen says. “But continued communication through e-newsletters maintains those relationships. Some companies come back to us in two, three or even ten years.”

He adds: “If you maintain the customer, you’ll maintain the business. And if you maintain the business, you’ll grow the business.”

Carmen’s business is growing in many ways. For example, his company recently merged with three other commercial real estate firms to form Resource Commercial Real Estate in Indianapolis.

Carmen plans to continue the tradition of e-newsletters with the new company for which he is president by using it to communicate with two primary categories – the database of clients, any business that utilizes office property, industrial or retail and non-client business contacts that fit into office, industrial or retail property categories.

Prior to the merger, Carmen sent quarterly newsletters to roughly 1,000 clients and contacts and 300 prospects. Other brief stories and news items were sent every other week with an eye toward dates and holidays to maximize open rates. Carmen expects subscriber numbers to increase once the newly formed company merges and filters its mailing lists.

Lessons Learned

The biggest lesson learned was the importance of creating meaningful content for clients. “When we first began using ExactTarget our unsubscribe rates were high compared to where we are today,” Carmen says. “We would do a mailing of maybe 1000 pieces and get 60 unsubscribes. That was unacceptable. As a professional B to B, it was challenging to learn how to provide meaningful information crafted with the virtues of our firm within the message engaging the reader so they want more information.”

But learn he did. Carmen provides readers with information to help manage their business with subtle messages on how his company can improve their bottom line. “We’ll send out announcements and include information on a client doing a headquarter relocation,” he says. “The client will talk about HR challenges, losing employees, etc, and follow up with how our firm helped overcome those obstacles and issues.”

Carmen’s newsletter typically lost less than one percent of subscribers per mailing and gained readers on a consistent basis. “On average, we picked up about 25 to 30 subscribers a month and now with the merger I expect we’ll grow significantly, maybe 100 per month, especially early on.”

Carmen cites a clickthrough rate of around 4-5 percent with an open rate of 75 percent. But conversion rates are difficult to track due to the nature of the business.

While he concedes that he probably won’t sell anyone with information alone, his initial objective, branding, has been met.

“We’re building brand awareness and our image as the industry leader and industry expert,” he says. “When we can burn that on the brain of our prospective client universe, we’ll pick up more business, and we do.”

Carmen adds that e-newsletters have helped his company do a better job of marketing than his competitors at a fraction of the cost.

“Every time I get an open or clickthrough rate from ExactTarget on one of our pieces, a prospective client is reading a brochure on our business,” he says. “They may not know it, but they are.”, he says.

He continues: “If we get a 50% open rate on a piece that we’ve sent to 2000 business people, we’ve gotten in front of 1000 prospective clients. Do you know how long it would take for our people to be in front of that many people? They couldn’t do it in two years, but now they can do it every two weeks.”