Our millennial Consumer Insights Manager Sidney Pell concludes this podcast with:
For fun, choose a home builder or landlord and search the term “[company name] reviews” and see what millennials see. If you just did that, we now have your attention. Companies we tested frequently ranked below 2 on a scale of 1 to 5 for customer satisfaction. Please don’t respond with excuses. That is the first thing your prospective buyers/renters see before they then buy or rent from somebody else.
Sidney shares what baby boomer execs need to change to sell and rent more homes to millennials. Sidney spent four years as the Consumer Insights Manager at a major affordable-home builder in the country, Clayton Homes, and has spent most of the last year advising production builders on how to increase sales.
Podcast host Dean Wehrli pulled the following conclusions out of Sidney.
Stop Your Wrong Thinking
- Millennials aren’t lazy. The Great Recession made them frugal and cautious. The oldest have achieved a 50% homeownership rate by the age of 36, even with unprecedented levels of student debt.
- Stop pretending the Great Recession didn’t matter. Boomers lost the value of their 401K and then watched it snap back. The oldest millennials, which we call the 1980s Sharers, had a horrible time finding a great job. That impacted them—permanently. They are afraid of taking on a mortgage and then losing their job. Recession headlines scare them.
- Millennials are more likely than their parents to value quality of life experiences more than the accumulation of really cool stuff, including a big house. They want to continuously upgrade their life, not the size of their house.
- Quality of life matters. Many will trade off home size for a reduced commute.
- Impact on the world matters. 73% will spend more on a sustainable brand, and 81% expect their brands to make a public declaration of their social responsibility. For example, we recently proved out the premium attained by Thrive Homes in Colorado, which produces a healthy, luxury home. Millennials might brag about that on social media the way their parents bragged about their big house at dinner parties.
Technology Has Changed How They Decide What to Buy
- Millennials are researchers by nature. They have always found the answers to everything online. Are you providing them all the answers quickly and easily?
- If technology in the home will make their life easier, they want it. They are far more likely to pay extra for a smart fridge, smart lock, or smart garage. Millennials born in the 1980s are 44% more likely to buy a product that has the latest technology than their parents born in the 50s.
Use Two Lenses: Technology Plus Personalization
- Technology. Millennials expect a great mobile experience, equivalent to all the apps they use on their phone. They absolutely expect a consumer-centric experience online, not an unauthentic experience that starts with your home page and then highlights how great you are or asks for them to fill out a form to be contacted. You will lose sales to your competitor if your online presence isn’t as good as theirs.
- Personalization. While info is available online, millennials have clearly shown that they want a personal connection to walk them through the process of buying their first home. Nearly half of millennials plan on using a real estate agent for the new home buying process.
Value Matters—a Lot
Value is at the core of millennial purchase.
- A JD Power survey showed that value for money is king.
- Millennials are 2x more likely to purchase a home with smart home technology that is a good value, especially if it:
- Enhances their life
- Helps their health
- Is more convenient
- Style and color are less important than quality and functionality.
Time Matters—a Lot
- Millennials are 3x as likely to consider a smaller lot if it reduces their commute time.
- A location near work and retail is very important. Time is valuable.
- They want an efficient use of space when it comes to home design.
- Some will still do the very long commute if that is what is best for their families.
In summary, shift your business model to be millennial-centric. Make sure your reviews are at least a 4.5 out of 5 online. Make sure your online presence is every bit as easy to use as the most customer-friendly websites and apps millennials use. Maximize the use of technology, while also creating a personal connection for when millennials are ready for that connection. Emphasize the value you offer, your home’s positive impact on the world, and the improvement of life quality you offer, including time savings. As I type this, it all sounds so obvious. Yet, I rarely see this.