Another marketer I respect, David Armano, recently published “Marketing In A Post-Consumer Era“, which I found very compelling. With his permission, I’ve included quotes from David, along with his famous graphics, and offered my point of view on how it applies to the real estate industry. [Fingers crossed I don't disappoint him].
Once upon a time …
Check David’s diagram on Pre-Consumer attitudes below. What I keyed in on is the “modest consumption” behavior. At one time people bought a home with intent to one day host a Mortgage Burning Party. It was where they would raise family, retire, enjoy their twilight then leave the house as a legacy for their children. And, the thought of taking a Second Mortgage was considered a desperate act [clever banks would later rebrand 2nds as HELOCs - "a wise use of equity" - but, I digress].
A good example of this behavior is my father – who has had the same car for years. He balks at my suggestions to replace it, as “it runs just fine”. After all, he’s retired, so why would he spend money on a car, when he can travel? He simply buys what he needs.
We like the boom!
Now, let’s consider the Consumer Era or recent “boom” years created by easy access to credit, and how this applies to real estate. I remember a statistic that people lived in their homes an average of 5 years [will be interesting to re-measure that trend in 2012]. Granted, we are a more transient society than in previous generations – jobs change, lives change, etc. But, in essence real estate during these years was almost considered disposable, as it was an easy-to-get asset which could be easily replaced.
“Credit lines have ensured that we can purchase beyond our means and advertising has had years to perfect its craft making us believe that we don’t want the latest and greatest product-but that we actually NEED it.” – David Armano
When I read David’s quote, I thought of the McMansions “owned” by 30 year olds. I mean, do two people “need” 15,000 square feet and an 8 car garage?
Bye bye bling
Then it all came crashing down. Hard. The heartbreaking perfect storm of financial markets collapsing has people making big changes, and realigning priorities. First, we cut back out of necessity. Now it seems attitudes have aligned with our new more modest lifestyle.
[Sidebar: was this more simplistic set of values lying dormant deep down inside, or do we feel the need to justify a forced shift in lifestyle by making it the social norm?]
As a result, there is almost a revolution against excess. Even fashion designer Karl Lagerfeld has proclaimed “Bling is Dead”.
According to David, people are searching for more meaning and relevance in their lives. With that in mind, they may be reconsidering what they really “need” when buying a home. Not to mention the lack of confidence that real estate is a sound investment. I believe we will see the latter dissipate over the next 18 months, but the shift in values may remain long-term.
Is everything old new again?
Yes. And, no. In this Post-Consumer Era, there are great similarities: primarily our moderate consumption and our re-use of goods – although these days re-use is fueled by the green movement as much as moderation.
“The future of business will be simple. Providing better products, better experiences and providing indisputable value through things like services will get the right people saying the right things about you.” – David Armano
As it relates to you, how will you provide a better experience and be of more value? How will you position homes to prospective buyers? Consumers are empowered with more information than ever – not all of it accurate – and have networks of strangers that they trust more than advertising and marketing campaigns. How will you differentiate yourself?
Graphics courtesy of David Armano