Matthew Ferrara Understanding Re Generational Differences

Understanding Generational Differences and its Impact on the Real Estate Industry
Matthew Ferrara & Company presents

The Proposition
A Perfect Storm
Economic: Recession
Commodity: Prices, Oversupply
Demographic: Four Active Generations

So get ready to boldy go where nobody has gone before!

The Key Question
How will Gen X and the Millenials Change Real Estate?

!
Real estate today was built by Baby Boomers, for Baby Boomers.
The next generation of buyers and sellers aren’t Baby Boomers!
What they value is a lot different than what we have been prepared to sell.

The purpose of a business is to create a customer. Peter Drucker

Create a Customer?
Different than “serve” customers
To satisfy a particular market desire
Must start with the desire, not the product/service (contrary to current)

It is the customer…
… who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. What the customer buys and considers a value is never just a product. It is always a utility, that is, what a product or service does for him.
- P. Drucker, Effective Executive

So what do we know about customers...
… and what is of value to them?

62%
31%
Gen X
Baby Boomers
Silent
Gen Y - Millenials

Size of Home Purchased

Demograph Transfers
31
Average age of the First Time Home Buyer
47
Average age of Sellers

Is Real Estate Valuable?

64%
Percentage of listings thatwere derived fromrepeat clients or referrals
67%
Contacted only one agent
Before selecting themas listing agent.

What “process” did they use?

How did they hire us?

What did they want from the process?

Disturbing trends?

“
”
The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.
Peter Drucker

Baylor University Study, 50,000 REALTORS, 2009

There is nothing so useless as doing efficiently that which should not be done at all. Peter Drucker

Buyers between 18-44 using Social Networks daily in 2008
95%

35%
* REALTORS use social networkingat all, in 2009

75%
REALTORS never used a blog or podcast

But don't take my word for any of it….


Let’s look at consumer archetypes to determine what they value

Real Estate positioning:
First time and move-up buyer population
49% of new homes, 2006-2008

What constitutes their value set?
Individualists, Competitive
“Question everything, ” skeptics
Distrustful of authority
Prefer / “Certain” in own beliefs
Information age mentality, skills
Image Conscious

The Value Shift
$1.80
16 ounces of actual coffee
It’s hot

You look maaaahvalous….
$3.83
4 ounces of coffee, 12 ounces of foam
Requires special ordering language
Lukewarm

It's happening just like they imagined it!

Gen X’ers Value what’s Behind the Curtain
What they want
WebMD experience: Extensive, accurate, engaging Information on market/services before any consideratoin of personal authority
Consumer Reports level of Process Transparency
Customized to individual needs
They must be “in charge” of the outcomes


Take a closer look at Gen Y

Gen YThe :We: Generation

Gen Y (Gen We) Critical Facts
78 million U.S.; 2b worldwide
Real Estate positioning:
Significant portion of FT and move-up populations
6 - 12 transactions lifetime

Gen Y (Gen We) Critical Facts
What’s their value set?
Group Oriented
Close to Boomer parents
Highly structured lives
Consume/d by entertainment
Technology Normal (Integrated)

Millenials in Perspective

Technology is more than computers

Once again, science fiction becomes fact

What’s new is old…

What does the future hold for Millenials?

Social Networking = Mind Meld v 1.0
Gen X and Y are constantly “broadcasting” what’s happening in their lives…
You just have to be there, listening, watching for those life-changing moments that are associated with real estate needs!

How to Connect with Gen Y’ers
Use technology to establish relationships
Tether then to the process, but not to a computer (wireless)
Decisions must be validated by the network
Future luxury looks more like the rooms at the Encore than at the Ritz.

?
Now that we know more about the Zebra, how shall we catch it?

matthewferrara.comfacebook.com/mfcompany

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Matthew Ferrara Understanding Re Generational Differences

by Matthew Ferrara and Company on Mar 17, 2010

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Matthew Ferrara Understanding Re Generational Differences — Presentation Transcript