Outdoor Billboards - How to Overcome the Money Complaint from a Potential Landowner
Periodically, you will come across the landowner of a potential outdoor billboard location that throws up an unusual response: "it's not enough money". But not in the "I want more money" argument. That's just a part of negotiation. Instead, the argument is "I don't mess with anything that pays such little money, so get out of my office". You can get this response even when the amount you offered is quite large, like $1,000 per month.
Let's first examine what is too little money to mess with for a sane person. Clearly, a lot of people would not bother with something for, say, $1. If you sent a form to 100 people and told them to fill it out and return it, postage prepaid, and they would be sent $1, most of the folks you send it out to would never return it. However, if you increased that amount to $20, almost all of them would. So, for the sake of argument, let's say that most people have a threshold of $20 to be on their radar screen of an attractive offer.
Is your proposed outdoor billboard ground rent over $20? Sure it is. Its' probably at least $100 per month. I think you'd agree that no sane person would dismiss $100 as not worthy of some time on their part.
And then there's the "multiplier" effect on that $100 per month. In real estate, income is discussed in terms of a capitalization (or "cap") rate, normally benchmarked at around 10%. That means that the $100 per month you are offering actually enhances the value of the property by $100 x 12 x10 = $12,000. So clearly, the amount you are offering, even at $100 per month, is substantial enough to attract anyone's attention, and the landowner is clearly screwed in the head.
Let me give you a real-life example of the value of some income. I once approached Wirt Davis, one of the founders of Republic Bank, and one of the wealthiest men in Dallas, about putting an outdoorbillboard on a small piece of vacant land he owned on the Trinity River. I sent him a letter, as I always did, but I assumed that he would never respond, since why would a multi-millionaire have any interest in my offer of $1,000 per year? So you can imagine my amazement when he immediately phoned me with excitement over my generous offer. The reason he was a multi-millionaire was because he knew the value of a buck.
Since we're in agreement that your offer is certainly worthy of respect, we need to come up with a plan to invigorate this individual who clearly has no interest in "petty cash". I've found the only solution is to come up with a plan for the money that gives more benefits than just dollars - it satisfies other needs of the individual besides financial.
Here's a real life example of how to do this. I had a landowner who told me that my offer of $6,000 per year wasn't worthy of his time - "I spend that much at lunch" he told me. So I put together another offer for him. I offered to put together a program for his employees (he owned apartment buildings) in which the "employee of the month" would get $500. Don't ask me why he couldn't do the same thing himself with the money, but the idea of being a big shot with his employees, and be the judge of who won the money, intrigued him. I have used this same appeal on several occasions. My sales pitch goes like this "I realize that you are very rich and the amount I am proposing means nothing to you, but it does mean a lot to someone who does not have much money. Would you allow me to start an employee of the month/scholarship/charitable gift in your honor?" I think it's as pathetic as you do to have to feed someone's ego like this, but if that's what gets the job done, then that's O.K.
So don't be discouraged when someone says your offer is not worthy of discussion. Just take that money and repackage it into something more attractive. Apparently, a dollar worth of ego is worth more than a dollar of cash.