Should You Be Marketing for Millennials?

If you listen to the big real estate pundits, in fact, if you listen to our own weekly Power Hour, that title looks like a stupid question.  Of course you should be marketing to Millennials!  They are the next great home buying wave!  They represent something like 20% of the American population!  Of course you should be marketing to them!

Well . . . . maybe.

There are some realities about Millennial home buyers – born between roughly 1985 and 2000 – that are often ignored, realities that could inform your decision about pursuing them.  Here are two:

  • While high tech jobs and massive starting salaries do come to this group, the vast majority exit college and enter jobs paying near subsistence wages.  There are a whole lotta Masters Degrees working at Starbucks and the Verizon Store.  But that’s not all;  in most industries, entry level salaries have not kept pace with the cost of living.  In brief, Millennials often don’t have the income they would need to qualify for the entry level home.
  • Millennials and debt seem to go together.  For the college grads, it’s student loans – that $20,000 to $40,000 noose that hampers the creditworthiness of these home buyers.  For others it is the over use of credit cards to finance a lifestyle that is bigger than their entry level salaries.  Between lower income and higher debt, many Millennials present significant qualification challenges.

But so what?  We thrive on challenges!  Nobody is better at solving these kinds of problems than we are, right?  Yes, right, and with dozens of new financing instruments and special programs to help first time buyers, we have the tools in our arsenal.  But there is a third reality that just flattens home buying possibility for  many.  It is rapidly rising home values.

Coupled with the realities of lower salaries and higher debt, the affordability crisis is pushing home ownership out of the reach of many Millennial buyers . . . in fact of many buyers of any generation.  In California today there are many markets where fewer than 28% of the population makes an income sufficient to qualify for a mortgage on the median priced home.  It is a trend that shows no signs of reversing and that is spreading across the country.

My advice to you is to think, focus and aim before you fire your marketing at Millennial home buyers.  Are you in a marketplace where young home buyers can afford to buy?  Do you have inventory – condos or single family homes – that price somewhere in the $150,000 – $250,000 range?  Are you in a location where there are good jobs for college educated young people?

When I consider those questions, I immediately think of Greensboro, North Carolina, home of Jack Bailey and Steve Vincent, two Help-U-Sell brokers doing a great job of putting young people into their first homes.  It is a marketplace where housing is relatively inexpensive: the median sale price is still below $200,000.  It is also a market where employers are expanding, so there are jobs.  This may be a great place to seek out Millennials.

But then I consider David Bartels in Westlake Village, CA.  There, the median sale price is $775,000.  Yes there are some lower priced areas close by, and there are even lower priced condos, but prices still put those properties out of the reach of most Millennials.  You’d think Ventura County with its proximity to the employment mecca of Los Angeles would be a perfect Millennial market . . . but affordability creates huge headaches for this group here (despite what I wrote about Millennials in your blog, David).

Look at your market place and make a logical decision about whether or not to target Millennials.  Consider home prices, employment opportunities and typical starting salaries.  You may discover that it’s not worth pursuing this group at all . . . despite what the pundits may say!

Working with Buyers, Step-by-Step

Kendra, Alejandro and I were talking with Stephen Taber today.  He is setting goals for the new year and one of the items that jumped out was the lopsided mix of anticipated buyer and seller sides.  Stephen was planning on just 30% of his production being from buyer sides.

Of course, we all know why buyer sides are important.  Truth is, we market like crazy for sellers so that we can dominate the listing inventory . . . because doing so will create a strong and steady stream of buyer leads.  Yes, we make plenty of money selling our listings; but we generally make MORE working with buyers.  Even Don Taylor said it:  ‘People forget, but Help-U-Sell Real Estate was always about the buyer.’

By the way:  Stephen’s lopsided mix of buyer to seller sides is not unusual.  Almost every Help-U-Sell office is weighted toward seller sides.  Often the imbalance is slight, but it is usually there.  We strive for a 50/50 mix of buyer to seller sides, but usually fall a little shy of that goal because our marketing is so heavily weighted toward home sellers and it’s easy to spend all of your energy and effort there.

Stephen said, ‘I just like listing!  I enjoy it.  You never know with a buyer when they’re going to go somewhere else or drop out all together.’  What I heard was that listing is predictable;  working with buyers is not.  We know what to do when we are working on a listing.  Conscious or not, we know step 1, step 2, step 3.  We know our scripts and how to respond when the prospective seller voices a concern.  In other words:  when it comes to listing, we have a system.  When it comes to buyers, well . . . not so much.

Of course, there is a very notable exception to that generalization:  Jack Bailey’s Buyer Consultation system.  Nobody does it better than Jack and as proof of that, his buyer to seller sides mix is usually weighted to the buyer side.  He usually does more buyer sides in a year than he does seller sides!   For Jack, working buyers is as easy and predictable as step 1, step 2, step 3, and he’s helped many Help-U-Sell Brokers and Agents get to the same comfort zone.  But still there are a lot of folks out there essentially winging it when a buyer calls.  I think it’s time we had a simple, systematic approach to buyers.

Today’s buyers can and usually want to do a lot of the home search process on their own.  One of the ways we can establish our value to buyers is to help them do that.  Maybe step one is to ask the buyer how they are currently searching for homes.  They will probably say Zillow or Trulia . . . both of which we know are horribly flawed, with duplicate listings and dead listings and bad Zestimates of value.

Right now, you know of a superior home search tool focused on your local market.  It might be your own Help-U-Sell office website.  After all, it is updated from your local MLS every day and gives buyers the ability to search very much like an agent would.  It might be your MLS’s own public home-search portal.  Or it might be a 3rd party tool like Listingbook.  Whatever the best site for searching in the local market, you need to know how to use it backwards and forwards.

Then when the buyer calls and you ask how they are searching, you can give them a better alternative.  Stephen had the great idea of:

  1. Pointing out the limitations of their current search method (trust me:  if they’re searching on Zillow, they are painfully aware of the limitations)
  2. Asking if they are in front of a computer and if so, emailing them a link to a free online meeting site like join.me*
  3. Once online together, showing the buyer how to search on the broker website or MLS public site or Listingbook or whatever the best local tool is
  4. Exploiting the opportunity further by showing them how to set up a ‘First to Know’ profile and so on.

In less than 1o minutes you will have established a comfortable rapport based on your desire to HELP them.  What could be better.

I’m going to be looking into this whole issue of buyer step 1, step 2, step 3 and how we might have a simple system for working with these important customers going forward.  In the mean time, if you are so inclined, perhaps you could begin to think about how you might make the process a little more predictable.  I’d love to hear from you if you do!  And Thanks, Stephen for the great brainstorm.

*join.me is a free GoToMeeting type of online meeting/screen sharing platform.  What’s great about it is that you, the presenter, need to install a small piece of software, but the person you’re meeting need only go to a website – and you will be together.  There is nothing for  the attendee to install.  Once in the meeting, you can share you screen and show the person how to search effectively.  It is sooo coool.  

 

The Bullseye in Your Backyard

I’ve grumbled about this before but apparently, not loud enough. I am afraid, in the interest of being ‘techno-current,’ we’ve strayed from the core marketing strategy that made us great.

Help-U-Sell was founded on one powerful marketing principal:  geographic targeting.  As a broker, your job is to study your overall marketplace – I mean, really study (massage the numbers until they throb, to quote Dr. Dick McKenna) – to determine which specific neighborhoods are most likely to produce listings, the fuel that feeds our lead-generating fire.

There’s a lot in that statement.  Unlike our ordinary competitors who believe the answer to any marketing challenge is to add another agent, we look at hard data about the market and solve our marketing issues by going where the action is.  And we market for LISTINGS.  That’s it.  Just listings.  What about the other side of the business, what about buyers?  We love buyers.  As Don Taylor once said, “People forget, but Help-U-Sell has always been about the buyer!”  But we’ve learned that the best way to find a buyer is to get a listing and another and another.

I talk with brokers every day.  Often I hear the complaint, ‘My website isn’t working, I don’t get any buyer leads!’  My answer is always a question:  ‘how many listings do you have.’  I usually hear something less than 5.  Well Duh!! You don’t have any buyer leads because you don’t have any listings!  Real estate, whether the enlightened Help-U-Sell model or the tired old agent model, has always been an inventory business.  He who controls the inventory, controls the business.

Back to the idea I presented at the start of this post, the notion that we’ve lost our focus in favor of being technologically relevant.  With the entire Universe – especially NAR, Trulia, Zillow, et. al. – screaming that almost every single buyer starts their home search online, we have been lured into believing that we have to market online.  We spend money on AdWords and Facebook pay-per-click, and Google Display Ads; we obsess over our websites and constantly re-work them to become more attractive to search engines.

The results are almost always disappointing.  Even when leads are produced, the quality is iffy at best.  And what kind of leads are we getting from all of this online mania?  Buyer leads.  Again, we love buyer leads, but we also know how to produce them and it has nothing to do with point and click.

Meanwhile, as good Help-U-Sell brokers pour countless dollars and lots of energy into their online programs, I see them ranging all across God’s Green Earth to take a listing here and another way over there and heck – you’re an hour away from my office and in another area code, but shucks, I’ll take your listing!

Stop It!

Use your market data to pick the two or three specific neighborhoods in your Target Market that have the highest turnover rates, and then focus all of your energy in developing listing inventory there!   When a FSBO sign goes up, you know it and are in contact with them that first day.  When one of your competitors gets a listing, you immediately do 50 ‘Arounds’ so the neighbor who is also thinking of selling knows there’s an alternative to 6%.  When you get a listing in your Target Market, you regard it as a gift from the Marketing Gods and you exploit it to the max with signs, and brag cards and open houses and half a dozen other strategies.

Now, once you’ve done that, once it has begun to produce, once you’re getting at least 15% of the listings in your Target Market . . . then, you can consider online marketing.

And the  online marketing you do should be aimed at further establishing your brand.  It’s things like putting your latest Sold & Saved or Testimonial on Facebook and then paying to promote it within your target market.  It’s things like creating a well-focused landing page for a Google pay-per-click campaign aimed at FSBOs in your target market.

Yes, there is a place for the Zillow/Trulia/Realtor.com ‘buy a Zip Code’ programs.  I know of a few offices that have thrived with those additional marketing pieces.  But you know what all of them had in common?  Tons of listings.  Really.  Go onto Zillow and search for homes in Chino Hills, CA.  Patrick Wood will turn up in Spades.  Why?  Because he has a huge share of the listings in that town.  Zillow works for him – just as it works for Ken Kopcho – because he has a nice chunk of the listing business in his target market.

So, Help-U-Sell Brokers:  use the Internet.  Use it to gather as much data as possible about the individual neighborhoods in your overall marketplace.  Pick a few that have the highest turnover rates.  And then pursue the listing business in those neighborhoods with an unwavering focus.  Do it on foot, in the streets and the mailboxes.  Do it on billboards and bus benches, community sponsorships and involvement, Do it with signs. Get a listing and another and another.  And then, start thinking about how you an further establish your brand in those neighborhoods with online marketing.

Please.

 

Two New Videos For You to Use

Robbie Stevens sometimes asks me to write and record a short video for use on various Help-U-Sell websites.  Usually these are consumer-focused pieces designed to present the superior Help-U-Sell offer and encourage viewers to seek more information.

As a new Corporate website is just around the corner (and if you haven’t seen it, it is a home run), he asked me to do two new ones.  One is a Help-U-Sell overview, mostly directed at potential sellers; the other is directed at potential buyers and presents our unique approach to helping them find their dream homes.

You can add these to your own Help-U-Sell website by logging into OMS, going to ‘Marketing and Content’ and ‘Website CMS.’ Click ‘Edit’ and select the page on which you’d like to use the video.  Scroll down and select the HTML view, then copy/paste the embed code from YouTube where you’d like to see the video.  Once you have done that a few times it is VERY easy, but I’m sure if you’ve never done it, my brief instructions seem daunting.  Give yourself 10 minutes to get as far as you can with it, then call tech support at Help-U-Sell and let them walk you through it or do it for you.

You may also email the link to prospective sellers and buyers.  I’ve included the YouTube link under each of these videos.  Here is Help-U-Sell for Buyers:

Here is the link to this video:  http://youtu.be/agkvmZYN5-8

And here is ‘The Help-U-Sell Difference’:

And here is the link to this video: http://youtu.be/sxgnCJi1CMc

Feel free to use these in any way that may help you garner new business!

Cautious? Or Crazy?

There was a piece in the industry trades this week about a new ‘trend’ among home buyers. Seems some folks are making their offers contingent on a ‘sleep-over.’ They want to spend a night in the home before they solidify their commitment.

Before you snicker, too loudly, think about it . . . from the home buyers’ perspective. You love the house, you love the neighborhood, at least you love it during the day . . but what happens after the sun goes down? Is the house next door owned by young Jesse Pinkman from ‘Breaking Bad,’ trashing the place with regular week long parties?  Is that rarely used rail line half a block away actually used every night around 2 am?  Is the proximity of the Hospital Urgent Care facility comforting and disturbing at the same time (what with the near constant siren noise)?  How else would you know about the ambiance of this particular house at night unless you just GO THERE?  Spending the night, while unusual, is certainly not weird or strange.

I’m remembering the condo I owned in Atlanta 25 years ago.  It was what I could afford.  Enough said.

After I settled in, a very predictable night time pattern emerged.  I’d hear my upstairs neighbors laughing a Johnny Carson close to midnight (the floors were not that soundproof).  Soon after, they’d go to bed  . . . and then the squeeking would begin.  Rhythmic bed squeeking.  You know:  eek eek eek eek eek eek eek eek. It would eek and eek and eek and then it would stop for a moment and then it would start up all over again.  Sometimes the eeking would continue for an hour or more.  I’d lay in bed, staring at the ceiling, almost as much in awe as a I was angry for the loss of sleep!

After several weeks of  sleep deprivation and hours wondering how in the heck I was going to deal with it, an opportunity presented itself.  I happened to be coming into the building at the same time as my neighbors.  When we got to the front door, I opened it for the lady and then turned to the guy and asked if I could speak with him for a moment.  As the wife started up the stairs we hung back.

‘I don’t know how to say this,’ I began.  And I didn’t; it was possible he’d take great offense, possible he’d threaten violence, who knew?  ‘But your bed has a squeek.’

‘A  sqyeek?’ he came back, head tiled, brow knit.

‘Yeah,’ I said, ‘You know:  eek eek eek eek eek eek eek.’

‘Oh, that!’  he answered.  ‘We hardly notice.’

‘Yeah, well, I can’t help but notice, and though I am in awe of your stamina, I need my sleep!’  I said chuckling.

‘Oh!’ he said,’I had no idea!  I’ll go work on it right now.’

And he did.  No more sleepless nights, no more  eek eek eek eek eek.  And the best part was that I’d met my neighbors!  We became friends and socialized a bit over the next couple of years.

Now, what if I had spent the night in that condo before buying it?  What would I have done differently?  Would I have gone ahead with the purchase?  I don’t know – but I’d like to think I would.  My time there – and the appreciation I experienced  – were worth a few weeks of discomfort and it was strangely rewarding to take care of the problem the old fashioned way:  by talking about it.

I don’t want to suggest that pre-purchase sleep-overs are a great idea.  It’s certainly a stretch and I’m sure there are some serious paperwork issues that would need to be taken care of before anything like this occurred.  But I do believe that home buyers should get to know their prospective new neighborhood at all hours of the day and night.  I think you can usually learn what you need to know by simply walking the neighborhood after dark, by visiting the super market during a peak time, by visiting the closest school when kids are getting out fo the day.

Beyond that, as a purchaser, you have an implied duty to be flexible, to get along, to work with your neighbors to make your neighborhood a better place to live for everyone.  And never be afraid to put a damning squeek in its place!