Recently, I’ve heard industry folks downplay the role of the Internet in selling homes and making option selections. I was stunned to hear this and am concerned how damaging this viewpoint could be to home builders struggling to grow their businesses in a tepid market. There is little room for error in marketing your homes, so please consider that the Internet has changed home building forever. Here are the top five reasons why:
1. Of home buyers aged 18-44, 96 percent use the Internet to search for a home, and of those 45 or older, 76 percent use the Internet to search for a home, according to the 2011 National Association of Realtors’ (NAR) Profile of Home Buyers and Sellers. Overall, the Internet was the No. 1 information source cited by the average of all consumers in NAR’s national study (88 percent of all home buyers).
2. According to the Nielsen Global Trust in Advertising Survey, online consumer reviews are the second most trusted source of brand information and messaging, with 70 percent of global consumers surveyed online indicating that they trust online customer reviews—an increase of 15 percent in four years. An elite group of home builders—in addition to companies such as Amazon, Travelocity, and Netflix—already has forged ahead of the competition through open customer reviews, with dramatic results.
3. Nowadays, consumers are less apt to physically visit a store or sales office to research a product. According to Coremetrics Web Analytics, there is a 35 percent increase in the sales conversion rate among shoppers who viewed online video tours versus those who did not. Also, shoppers perusing product tours online spent more than 2.5 minutes engaged in viewing detailed information about each product—far greater than the average visitor’s 33 seconds. Companies that increase buyer convenience via the Internet will outsell those who avoid providing multimedia home information online.
4. The average Facebook user has 125 friends linked to their page. Picture it: If 50 customers post a complaint about your company on Facebook and 10 percent of their friends repost it, and 5 percent of their friends’ friends repost it, and then 1 percent of those friends of friends, that message will be conveyed to 1,183,009 people. Imagine if your company had a negative post like Whirlpool Corp. did in 2009 by one disgruntled customer, whose message reached tens of millions of viewers online and eventually mushroomed into a story written by The New York Times. Conversely, though, a positive post could reach a similar number of viewers.
5. Only 16 percent of respondents in the NAR study indicated that home builder information is useful to consumers who are searching for a new home. Home builder information ranked seventh out of 10 possible choices on the survey. Clearly, overlap exists between what constitutes the “Internet” versus “home builder information.” However, the results do indicate consumers still don’t consider home builder information to be an important resource for finding a home. The NAR study also found that only 5 percent of buyers found the home they purchased from a home builder. Perhaps it’s time for home builders to embrace new technologies such as virtual home tours, online options selections, and open online customer reviews to increase engagement with home buyers.
Unfortunately, our industry has been slow to adopt new technology and the NAR study indicates that we hold a marginal position in the eyes of consumers because of it. If home builders want to increase their market share, our industry will need to compete better against the resale market, where the majority of home buyers shop first. The Internet has made the most powerful impact to society in the modern era, so don’t let resistance to change put your company at a potentially fatal disadvantage, while your competition embraces it and leaps ahead.