The government announced it was over last fall. Conservative financial experts are suggesting it will be over next June. Whoever one listens to, there is a high level of disagreement regarding when the recession was, or will be, over. Regardless of when your brokerage’s management team officially decides it has tired of the recession and is ready to move into recovery, it is clear that there is much to be done inside your firm’s marketing program.
The confusion in declaring the recession’s death is, to some extent, brought about by the fact that making these types of market calls is, for real estate professions, a very emotional decision. It works both ways. Many real estate professionals refused to admit that the market had tanked in 2006. For this group such declarations were considered bad luck and the kiss of death. Accordingly, well into 2007 they were still telling everyone who would listen that “their” market was grand and that the key was to work harder. Oh, the power of positive thinking!
Now, in the spring of 2010, we are at the other end of the spectrum. Now this same group is dragging their feet at the idea that a normal market has returned. Yet industry experts, such as Steve Murray of the Real Trends organization, 
are telling us that their research indicates that over the past thirty years the average market performance has been 4.93 units per one hundred households. Adjusting that for real time (adjusting is the sign of an expert you know) one would come up with a figure of 4.84 residential transactions per 100 household units, a number that is dangerously close to the 2009-year end production numbers.
So, regardless of how your firm will go about declaring the recovery process has arrived, the first test of success will be universal acceptance of the decision within your firm. If half of your management team and agents are still in doubt, your efforts to adopt a recovery mind set and marketing program will fail.
The next step to adopting a successful recovery mindset is to understand and accept the consequences of the recession. Its impact will affect millions of American families for years to come. That same group that wanted to deny the down market in the first place will now work to convince everyone in the office that “their” clients were, somehow, untouched by the recession. This is simply not the case. Real estate consumers in every socio economic category have lost wealth through the devaluation of their property and financial holdings. Pretending otherwise will only further damage existing and new customer relationships that will already be strained by the financial events of the past few years.
Firms that have traditionally dealt with wealthy clients and luxury homes will find the new economic order especially challenging. On one hand, a whole new generation of Americans may now be able to afford homes that, at their 2005 prices, were out of reach. In the same vein, clients, whose 2005 level of wealth and affluence would have allowed them to live anywhere, may now find themselves downsizing into much more restricted circumstances.
Consumers in all ranges will be looking to enter into a whole different kind of relationship with their real estate broker. That broker’s, or their agent’s, insensitivity to their new status or plight may not be consistent with such a relationship.
Another key element of the post recession brokerage strategy will be continuing to emphasize both value propositions and consumer experiences. A recession, like heart surgery, is over years before its effects upon the patient wear off. Over the next several years a significant percentage of real estate consumers will be focused upon value in everything they approach.
In the same vein, many consumers, especially those who were hurt in the recession, will be focused on getting back into a local community environment. Many Americans will associate the recession with the global economy. For this group being a global citizen may not be as attractive as it was ten years ago. This attitude will embrace buying into familiar neighborhoods and re-engaging lost social contacts. Expect to see a rise in “made in America” marketing messages.
Now, more than ever before, consumers will be seeking out and attempting to capture the “essence” of their local communities and even neighborhoods as they create new lifestyles. Brokerages with long histories in the community will want to emphasize this quality in their marketing. A word of warning here would be appropriate. Don’t market traditional roles and values unless the entire company team is prepared to deliver them. Be sure to train managers and agents on the fine points of delivery this unique kind of value proposition.
Smart brokers will be focusing on marketing strategies that communicate effective messages in good markets and bad. The concept of “what matters most” captures this idea. Again, recognize the fact that consumers whose priorities previously included impressing friends and social contacts and enjoying 20% annual appreciation may now just be focusing on owning a nice home with friendly and non-judgmental neighbors as a place to raise their families.
This is also a time in which innovation will be both recognized and appreciated. In this context, innovation is not so much about bringing in new things as much as it is about improving existing things like procedures, processes and outcomes. Successful post recession brokerages will review their marketing and transactional services with an eye towards making the home buying process more dependable, more stable, with less surprises and unforeseen consequences. While the consumer of 2000 may have been willing to tolerate significant levels of hassle on their way to fame and fortune, that same customer in 2010 will recognize these shortcomings for what they always were – a failure to respect customers and an unwillingness to provide a quality and accountable experience.
This is not to suggest that innovation will not include new products, programs and services, for it certainly will. Over the next two years, lifestyle services will become critically important as consumers work hard to adjust to their new social, economic and living environments. The provision of lifestyle services will also represent a key opportunity to expand brokerage profitability.
In summation, whether brokerages engineer their post recession success through transitional messages, product mix or innovation, the single most important element of this new energy will involve updating and refining the brokerage’s relationships with its new and old customers. Think of it as “dating” your customers. They are looking for new experiences, and you are looking for a new space and increased profitability in the marketplace.
We can do this. Now is the time to start.
