Technology is disrupting the market, creating opportunity for innovative builders
By KEVIN OAKLEY
You can feel a general sense of uneasiness in the air and often in your gut. As an industry we are nowhere near as bad off as we were in 2009, so what is going on? The trouble is that things are not only changing on all fronts and faster than ever before. Even if you get excited about change (like me), it can be enough to make you reach for the antacids. Hold on tight, because everything is about to change – again.
Chaos in the Existing Market
Take a look at the absolute chaos going on in the existing home marketplace today. Zillow’s hoping to purchase (and then re-sell) 5,000 homes a month directly from consumers in the next three to five years. They want to use technology and data to make a seamless experience for consumers – or as they refer to it – allow today’s consumer to push a button and make magic happen. Opendoor led the way, but Zillow, Redfin, Keller-Williams, and more are racing to catch up – and brokers and agents certainly seem to sound an awful lot like Chicken Little as they scream that the sky is falling.
New Homes are Next
This level of turmoil is headed our way. The types of homes that today’s and tomorrow’s consumers want do not look, feel, or live the same way as we have built them for decades. They prioritize different aspects of the word “home” than before. Product development is extremely time-consuming and we tend to end up with incremental changes (“Look! It’s a traditional home layout from 2005, but we added smart home features!”), versus a bold attempt to solve consumers’ pain points with the current housing stock. AirBnB even hopes to challenge the very idea of homeownership itself – betting big that younger people will prefer infinite flexibility.
Customer expectations defined their interactions with Amazon, Uber, and Netflix and continue to leave them feeling neglected, undervalued, and even hostile. As an industry, we keep trying to explain how hard it is to build a home – as if that will help us “win” the argument (it will not). Ad spending is ramping up to levels I have not seen since the high-water mark of newspapers, and yet much-needed investment in the tools, systems, and digital processes to wow today’s buyer is consistently put on hold.
How builders collect, organize, and use their data is also adapting at lightning speed inside some companies – and not at all in others. Data collection and organization in preparation for use by artificial intelligence and machine learning is the new gold rush for homebuilding companies. Many still using paper, filing cabinets, and cardboard ledger boxes will never catch up. We are seeing the impact today, but it will exponentially increase in the years ahead.
The unknowns of exactly how everything is likely to change can cause us to freeze, panic, or worse. You do not need to let that happen. Of course it is going to be hard, but we are homebuilders! We move mountains, turn nothing into something in the middle of the desert, and organize millions of small parts to come together and assemble a home. It is how we create value for ourselves, our homeowners, and this country. Stay focused on all key aspects of your business, but especially on your customers, your data, and your employees to thrive amidst the coming changes.
You must always be actively listening to your customers. Continual listening is a key trait of top performers. Spend time directly observing them as well. Shake their hands, and spend time in their homes with them (warranty visits do not count!). Do not forget them. Build a tribe that is intimately connected to you and your brand.
Make sure you are collecting key data points in a digital format, organizing it, and making it available to stakeholders throughout your organization. With every new advancement in A.I., those with the data primed and ready will be the first to reap the rewards.
Empower your employees with the data they need to make smart decisions, train them, and then trust them to carry out what needs to be done. Humanizing your business is an incredibly powerful marketing tactic. Let robots and machines do behind-the-scenes work – but stand out from the crowd by making sure your employees are interacting with customers as individuals. Leave the chatbots and templated communication to Old Navy or Target. The market we sell in demands a “luxury” experience at every price point and that means a personal experience.
Kevin Oakley is the Managing Partner at Do You Convert, author of Presale Without Fail: The Secret to Launching New Communities with Maximum Results, and co-host of the Market Proof Marketing podcast.