BY LANCE EDWARDS—
What’s In It For Me
This technique goes by the idea that there are two things involved in marketing any product. Those two things are features and benefits.
Features: These are the things that make the benefits true. They allow you to produce the benefits. The features contribute to the benefits.
Benefits: The benefits are in the Four-Part Formula and include control, low risk and high return.
For example, let us look at the benefit of Control. One of the features of control is having a recorded first lien. Another feature is a controlled release of monies. Yet another one is the ability to intercede. These are all features of control and that is what the investor is interested in. Telling them how you are going to give them control helps convince them that they actually will have control. The way you promote control is by demonstrating it through its features.
The benefit of Low Risk is the fact that your multifamily deal is secured by real estate. The feature you offer to your investor is the experience of your team. This contributes to the feeling of low risk. You can further this security by bringing in extra collateral of a blanket mortgage.
To demonstrate the benefit of High Return, you will need to show your investor that the return they will receive from the deal is higher than what they indicate to be a good return on their Profile Sheet. Find that benchmark of what they consider to be a good return and then either match it or beat it.
You need to start with the reason why they need the money. The more you can speak to the potential investor’s reason why, the more money you can raise and the less return you have to pay. Once you determine their reason why and then explain to them how you will enable them to meet their reason why, you can then explain all of the benefits to them.
Only after you address the benefits of control, low risk, and high return do you then present the features to prove how you are going to deliver those benefits. So your process is simple: start with the reason why, discuss benefits and then the features.
You need to be sure that you do not spend the bulk of your time promoting features and neglecting the promotion of the benefits. Just remember to always have the investor’s perspective of “What’s in it for me” at the forefront of your thoughts and you will be able to address their questions and concerns and successfully market your product.