Segments for generational marketing

Generational Marketing for Real Estate Agents

Generational Marketing for Real Estate Agents

 

Generational Marketing for Real Estate Agents is a way to market more efficiently and effectively. This type of marketing works is the case whether you are marketing to get listings or marketing to reach buyers. 

What is Generational Marketing

Generational marketing merely is directing specific marketing material to segments of the population based on an age bracket and the motivations (pain points) that are important to that segment.  In other words, what has a high degree of importance to one segment may have much lower significance to another.

Generally speaking, younger homeowners are not seeking to downsize to a new home; in fact, the opposite is true. However, for older homeowners downsizing to a smaller home is a factor for a large percentage of that segment.

From the example above, you can see that a marketing message that is centering around downsizing would be valuable to some segments, but not all.  The first step to being efficient is to segment your prospects. The first step to being effective is to develop or obtain appropriate market materials that address the pain points (motivations) of those segments.

The 2020 Home Buyers and Sellers Generational Trends Report published by the National Association of Realtors broke down the home seller population into six generations.  They are defined as follows:

  1. Silent Generation
    1. Born before 1945
    2. 74 years old and older
  2. Older Baby Boomers
      1. Born between 1946-1954
      2. 65 to 73 years old
  3. Younger Baby Boomers
      1. Born between 1955-1964
      2. 55-64 years old
  4. Generation X 
      1. Born between 1965 – 1990
      2. 40 to 54 years old
  5. Older millennials
      1. Born between 1981- 1991
      2. 30 to 39 years old
  6. Younger millennials
      1. Born between 1991- 1998 
      2. 20 to 29 years old

 

Marketing for Real Estate Listings

 

If you are trying to prospect for listings, it is crucial to know what motivates sellers in different generations.  It is not always the desire for a larger home, the results of a job change, or to be closer to family. However, if you segment your prospects by generations, you can align your marketing material to address the most common reasons that people move from one home to another in any given segment. The same NAR report mentioned above found that the motivation to sell, by percentage, for the six segments were as follows:

 

      • Silent Generation 
        • 33% forever home – never planning to move 
        • 34% will move for health reasons
        • 12% will move because of life changes (change in family size, marital status, children move out, retirement, etc.)
      •  Older Baby Boomers
        • 32% forever home 
        • 25% will move for health reasons
        • 20% will move because of life changes 
      • Younger Baby Boomers
        • 25% forever home 
        • 26% will move because of life changes
        • 14% downsizing to a smaller home
      • Generation X
        • 34% will move because of life changes 
        • 15% will move due to job change
        • 11% downsizing to a smaller home
      • Older Millennials
        • 26% will move because of life changes 
        • 21% will move due to job change
        • 13% desire for a larger home
      • Younger Millennials
        • 35% will move because of life changes 
        • 22% desire for a larger home
        • 16% will move due to job change

As a real estate agent, you are a businessperson.  A goal shared by many businesses is to produce more profit (being effective) while spending less (being efficient).  If you target your marketing materials using the information above, you can become more effective and efficient.

Prospecting by the numbers

 

Let’s say that you do geo farming to 1000 homes in a given neighborhood. Statistically, a little over 300 of those people will be 65 or above.  If you have segmented your database using the generations from the NAR report, you will be able to identify who those 300 people are. As an example, many real estate agents use postcards to keep in touch with their geo farm. Now you could send the same postcard to all 1000 people in the neighborhood writing about downsizing.  If you did that, you would be wasting about 700 of those contact possibilities.  Wouldn’t it be better to spend out that postcard just to the 300 that are most likely interested in downsizing?   

It is a given that you want to reach everyone in the geo farm. So, target the homeowners with postcards that address their concerns.  Younger millennials are more likely than other groups to buy a home based on life changes.  Typically, this is the segment that will be getting married, having children, or experiencing other life changes, and that may need a larger home. Address their motivation. Send a postcard, email, flyer, etc. asking if they have outgrown their current home.

As an example, if you were to send out a postcard about downsizing to 1000 people in your geo farm, you might anticipate these results. About 50% (500) would throw away the post without reading it. Of the remainder, about 160 would be in the age group for whom this message may resonate.  For 2/3 of that segment, downsizing is not a concern.  Of 1000 postcards sent, the material was relevant to 50 or so prospects.  If 2% respond to your call to action, you will get one lead.

Now, using segmenting and targeting with generational marketing, the same 50 people of 65 and the older crowd could find interest in your message, and you would still get one lead from that segment. However, the postcard you send to Generation X, 25% of that population, will be different.  It will address life changes, so rather than wasting this contact opportunity, you might get one more lead.  The message you send to millennials about relocation services, suggesting how you could market their home and assist them reached a different set of 100 households and could provide you with one more lead.

Now your results will vary, but if you could segment your data, send the appropriate marketing material for each segment whose motivation aligns with your material, and potentially triple your leads, why wouldn’t you do it? 

Prospecting Materials

 

The good news for real estate agents is that they do not have to do everything by themselves.  Customer Relationship Management (CRM) Databases are widely available.  Most allow you to segment your contacts, and some like ZipperAgent have built-in marketing platforms like the Email Campaign Builder.  Templates for emails, flyers, postcards, and more abound on the internet, often at no cost. Several companies print postcards, mail postcards, provide demographic information, sell mailing lists, etc. Some companies even do it all for you.

Marketing for Home Buyers

 

Just as there are generational differences in the motivations of home sellers, there are generational differences in the motivations and desires of home buyers.

Let’s start with what seems to be shared regardless of the generational segment.

All generations of buyers continued to utilize a real estate agent or broker as their top resource to help them buy and sell their homes.

What are the services that buyers want from a real estate agent that should be mentioned in your marketing materials for all  generations

  • Finding the right home to purchase 
  • Negotiating the terms of sale 
  • Price negotiations 
  • Assistance with paperwork

 

Across all segments, 72% or more chose the first real estate agent they communicate with as their agent.

 

The five most essential agent skills and qualities you need to be communicating to buyers in your marketing:

  • Honesty and integrity 
  • Knowledge of purchase process 
  • Responsiveness 
  • Understanding of real estate market 
  • Communication skills 

 

Across all segments, the most popular homes for buyers have three or more bedrooms and two or more bathrooms.

Across all generations, new construction was purchased less frequently than prior owned homes.

Marketing a specific home 

 

Working to sell a newly constructed or to be constructed home, as opposed to a previously owned home, should be different. Consider these factors in your marketing:

More than 50% of buyers of new homes under the age of 40 are hoping to avoid renovations or problems with plumbing or electricity.

Almost 40% of new home buyers under the age of 54 like the ability to choose and customize design features.

Older Baby Boomers, the Silent Generation, and Younger Millennials cite amenities of new home construction communities as important to them.

If you are marketing a previously owned home, consider the top three reasons buyers give for purchasing one.

  • Better overall value than newer construction
  • Better price than new construction (More than 50% or Younger Millennials prefer to purchase an older home based on a better price
  • More charm and character to older homes

Generational factors influencing neighborhood choice

 

Not surprisingly, convenience to a buyer’s job is more important for younger buyers and decreases with the age of the buyer.  Proximity to a job as a concern it significantly drops off after age 65 while convenience to shopping increases.

Accessibility to veterinarians’ and outdoor space for a pet is highest for younger millennials and steadily declines as a home buyers age increases.

The quality of the school district is most important to Older millennials, then Younger Millennials, and then Generation X in that order.  Concerns regarding the school district drop off significantly for home buyers over the age of 54

Ease of access to health facilities increases as a priority, gradually from Younger Millennials to Younger Baby Boomers and doubles after age 65

 

Some things to consider regarding marketing 

 

90.4% of Millennials, 77.5% of Generation X, and 48.2% of Baby Boomers are active social media users.   Since the majority of home sellers and going to be Baby Boomers, social media may not be the best channel for marketing to get sellers, however, Generation X and Millennials may be producing the most homebuyers, so it may be a great place to market to them.

Don’t forget video marketing.  YouTube is the second-largest search engine in the world. 73% of Americans use YouTube.  If you are not marketing, there you are missing opportunities.

91% of people in the United States of American over 65 use cells phones, and the percentage for those under 65 increases to 99% for the 18 to 29-year-old age group.  Phone calls are still a valid way to market your services, so is texting.

Email still woks, snail mail still works, phone calls still work, and even signs on bus benches still work.  If you are not attracting the listings you are marketing to, or not enough of them, try segmenting your contacts and marketing to each segment differently.  If you are getting leads but not the ones you are targeting, it may mean you are not appealing to the right desires or motivations of the consumers you are trying to reach.

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