Ever since the Internet became popular, home builders have been slowly aligning their sales strategies to the new normal. But a revolution is afoot and sales will never be the same. It’s what Google calls the “Zero Moment of Truth” (ZMOT).
ZMOT is the dynamic buying experience that happens when companies present their products online integrated with a variety of product options along with real customer reviews. This intelligent combination of online buying tools allows the customer to make informed purchasing decisions in real time.
As consumers become accustomed to the ZMOT experience, builders need to adapt not only to what buyers want in a new home, but also how they shop for one. This article explores how eCommerce platforms (not originating in the building industry) impact the expectations of today’s home buyers, and lead them to scour the Internet before ever setting foot inside a builder’s model.
Do you have Amazon prime? Online retailer Amazon.com revolutionized eCommerce, selling everything from books to appliances, and even home building products. As the most powerful eCommerce platform in the world, it has usurped market share from nearly every retail business. What is it about Amazon and its customer experience that forever changed retail? Behind the company's world-class direct mail delivery, it empowers buyers with three key services available online: the marketplace, reviews, and options.
Disrupter #1—The Online Market Place
Amazon was one of the first companies to sell exclusively online, without a physical store presence. From its inception in 1994, the company has utilized only pictures and videos to display products. It is important to note that many builders today are still skeptical of showcasing their homes online.
However, this reluctance to join the Internet revolution is a losing strategy. A new 2014 New Home Conversion Report by the Bokka Group and NAHB found that 94.6 percent of home buyers use pictures, and 85.1 percent use virtual tours in their buying process.
What Amazon (and other online retailers) did was create the expectation that model homes would be accessible online, just like any other product a consumer shops for.
Disrupter #2—Customer Reviews
According to the Bokka Group's 2013-14 Home Buyer Conversion Study, 80.9 percent of new homebuyers indicated that customer reviews were important when researching a builder, up 16 percent from the year before. Nielsen Ratings findings support this, indicating that customer reviews are now the second-most important source for brand information online, second only to an actual customer referral.
Returning to our Amazon example, the retailer boasts the most comprehensive products review database in the world. Price and convenience remain important, but are clearly not the only factors that make Amazon a powerhouse. Buyers read the comments from customers about the products because it gives them an idea about how they might, or might not, enjoy their purchase.
Home builders today still fall far behind the rest of the world when it comes to customer reviews. Many just allow random reviews to happen to them, rather than proactively drive their reviews like Amazon does. Based on the response rates of sites like Google Plus, Yelp and Houzz, less than 1 percent of customers create reviews. Thus, if you don’t encourage your home buyer customers to provide feedback, you remain a sitting duck for that rare disgruntled customer.
Many builders struggle with negative public reviews populating the first page of an Internet search. Google your company and see what comes up. Anything less than four stars equates to lost sales for your company. Use a professional service to measure and post your reviews continuously so the “real” story of your customer satisfaction reaches future customers.
Disrupter #3—Online Options
Today, few builders offer the complete Amazon buying experience, especially when it comes to the options available for a home purchase. At Amazon, a buyer accesses not only product pictures and reviews; they can select color options and sizes, all on the same web page. Below is a screen shot of the real-time buying experience of the Moxie shower head.
The product pictures, star ratings, and option selections, all come together to form a “Zero Moment of Truth” experience. It is also changing the expectations of consumers regarding the experience of buying products in all industries. Today, it's directly impacting the way homes are bought and sold. How many builders offer the ability to tour homes, view and select home options, and read home buyer reviews? Not many, but you may be surprised that now thousands of new home models in the United States and Canada are being sold using a ZMOT platform.
Ask yourself, “Who on my company’s team is dedicated to winning the Zero Moment of Truth online with customers?” If your answer is nobody, you may be playing a deadly game of catch up as your market share shifts to your competition.
Paul Cardis is the CEO of Avid Ratings, a full-service customer loyalty management firm.