Writer Solomon Short once said, "Any great truth can–and eventually will–be expressed as a cliché" In the real estate business, of which home building is a significant part, entire conversations are comprised of clichés, many of which do express great truth. But clichés, like truth, can wither over time; what is true today may not be true tomorrow. Thus, yesterday's broad-scale "location, location, location" or "luxury living" are rapidly being replaced by another, newer cliché: "Builder, know thy buyer."
The truth is, a sparkling amenity package and decent location, on their own, no longer sell homes. In the current atmosphere, even spectacularly situated projects with all-inclusive, top-of-the-line standards can sit collecting drywall dust while a strategically targeted community sells out. The secret is in the word "targeted."
Targeting involves the employment of the semi-science of psychographics, which comes with its own splendid display of clichéd-but-true profiles: urban retirees or "ruppies;" ruralists; technophilic Gen-Xers; lesbian, gay, bisexual and trans-gendered (LGBT) Gen-Xers; the LGBT faction of the Eisenhower generation; Hispanic-, Asian-, or African-American–the list goes on and on.
Demographics groups people according to birth year, gender, race and ethnicity, geography, income, and, perhaps, education. Psychographics goes farther in establishing kinship, to shared interests, buying preferences, cultural and historical reference points, etc.
Merely knowing who these groups are is insufficient, according to Teri Slavik-Tsuyuki, senior vice president and chief marketing officer at San Diego, Calif.-based Newland Communities. "Builders and developers tend to approach these and any groups–Gen-X, Gen-Y, Latinos, LGBT, urbanists, etc.–from the perspective of homogenous groups and then make planning and development decisions that are sometimes based on a generic or narrow view," she says. "At Newland, we do a lot of our own proprietary research, and we combine that with large, nationwide macro trends that have been uncovered by the likes of Yankelovich. We believe that consumers in America today are struggling with some pretty big challenges: time famine, work/life balance, financial stability, and caring for their families (aging and otherwise). These challenges cross all categories, and the trick is to understand their relevance as motivators for each."
Just getting the message to individual members of these broad groups requires more than just cursory research. Scott Choppin, CEO of Urban Pacific Group, explains that while baby boomers tend to be more heavy newspaper readers than their younger counterparts, he sees less and less dependence on–and therefore a decreased value in advertising within–them. "A Gen-Xer won't even look at the newspaper," he says, noting their perception of it as an "archaic medium."
But Choppin has found that while print may still reach the boomers, so, too, does the Internet–boomers, he notices, are not quite as technophobic as conventional wisdom, at least among younger generations, might have it. This has driven the company's entire sales and marketing business plan to digital channels and prompted the creation of a more robust online presence.
Designs And Destinations
There are, however, broad trends that cut across the psychographic spectrum. One such trend is urban infill.
"The Gen-Y group isn't looking to buy their parents' suburban tract house; they're looking for more services close to where they're buying–infill, urban locations rather than suburban," says John Waldron, senior associate with Withee Malcolm Architects' Torrance, Calif., office. The same may be true of their grandparents. "In terms of the move-down buyer in the senior population, there's an advantage in being closer to goods and services rather than being separated from them," he says.
Diane Zile, vice president of Louisville, Colo.-based McStain Neighborhoods, acknowledges her company's previously held misconception that empty nesters would be opposed to multi-level housing in the urban environment. "That is clearly not always the case," she says. "Today's active adults are looking for distinctive design and innovative floor plans located in vibrant, connected, walkable communities."
Waldron notes the importance of single-level floor plans with ample entertaining space and a second bedroom for guests in the housing market's mature buyer segment. Not so for the grandkids, however. "On the younger side," he notes, "they're looking for places in the urban environment, something with a little bit of attitude to it." Waldron characterizes these "edgy, loft-type spaces" as more open plans partitioned through the use of furniture rather than walls.
Of course, it's important to differentiate between psychographic market segmentation and stereotyping. Sometimes they get muddled up. One wrong step, and what's intended as a positively tailored and precisely aimed sales approach can quickly become a prospective buyer's nightmare.
"Builders often mention to me that women should be involved in designing homes because they are the ones spending time in the kitchen," notes Warmington Homes California's vice president of sales and marketing Cheryl O'Connor. "That is a myth and stereotype that needs to go away."
A sales staff that automatically assumes the female faction of married couples will gravitate toward the kitchen packs the negative double wallop of potentially insulting a wife and alienating a culinary-minded husband. All facets of a home's design should be discussed with equal importance and detail across all parties involved, she advises.
Of course, that's not to say that women don't represent a strong potential for increased market share; O'Connor points to single women, both those who have divorced and those who have never married, as the fastest growing population segment to enter the housing market. "This segment of the population is 28 percent, and Fannie Mae says single women are becoming homeowners at twice the rate of single men," she notes.