Why Homebuilders Must Adopt Personalization Strategies and Tools

Who are today’s home-buyers?

Millennials are now the nation’s largest demographic group at 70 million people, which dominate the home buying market with 32% of the total U.S. housing market and 68% of all first-time homebuyers. As opposed to the previous generations, which were focused on a good job and raising a family, millennials can afford to “find themselves” and “do what they love”.

They are also a lot more demanding than previous generations. This is true to the terms, quality of products they buy but also to their available resource and time to research, compare and learn about products they are looking into.

But this is not just true for Millenials. We live in a time and age in which customers expect a personal connection with the companies with which they interact. They expect brands to predict their desires and needs and offer tailored, personalised shopping experiences and products.

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What is Hyper-Personalization?

The use of data, analytics, AI, and automation enables custom and targeted experiences. Often referred to as hyper-personalization. Hyper-personalization is a way for brands to tailor the entire customer experience to individual customers.

Personalization can reduce user acquisition costs by nearly half, and increase revenues by 5% to 15%. It can optimise the efficiency of marketing efforts by 10% to 30%. Across US industries, shifting to top-quartile performance in personalization would generate over $1 trillion in value.

According to an Epsilon 2017 survey, 80% of respondents indicated they are more likely to do business with a company if it offers personalized experiences and 90% indicated that they find personalization appealing.

How can Hyper-Personalization be Utilized to Optimise Home-Buying?

Home-buying is typically a family’s most significant purchase and is both financially and emotionally a very demanding process. Ironically, it is often a very frustrating, inefficient and unsatisfying process. Homeowners, especially off-plan buyers, are normally dragged into unexpected expenses and upgrades.

Approximately one-quarter of homeowners who renovated in 2019 did so because they wanted to customize a recently bought house.

Both large US homebuilders Taylor Morrison Home and PulteGroup recently piloted programs in which buyers can choose, design and finance a new home virtually.

“what our industry needs to do is catch up with the world of e-commerce and what every other industry is doing,” said Sheryl Palmer, CEO of Taylor Morrison to CNBC. Palmer admitted even she was surprised by the swift demand for the new program.

How can smaller Developers Compete With the Larger Home-Builders?

More and more developers and homebuilders are now allowing homeowners to customize their homes and upgrade fixtures, finishes, and even layout elements. With many of the larger developers offering such services, opening up designated departments and hiring designers and customer service representatives to accommodate such services, smaller developers find themselves competing in an impossible battle. Owners are demanding to be able to tweak their properties, while the extra work, time, and liability this brings up, makes it almost always more costly than it generates.

While the appeal for purchasing new build properties grows further, the likelihood of smaller developers being able to afford such a service deepens, therefore increasing the larger developers’ hold in the market.

Innovative technology, along with a change in approach, can optimise such processes and enable not only a smoother, more efficient experience, but can also generate a new revenue stream through an increased customer base and added service fees.

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