Customer self-service

We’ve all heard the expression that the three most important things when buying and selling property are: “Location, location, and location.” We joke about it, and occasionally take it seriously, but mostly people who buy homes use it randomly at best – or maybe ignore it altogether. Yes, schools, shopping malls, hospitals and even access to highways do play a role, but I’m willing to bet that most people put more thought into affordability, future potential in terms of resale, snob value of living in this or that suburb, and many other factors – and probably choose one that works best for them.

But I recently came across an article from the USA that really surprised me. Zillow is one of the largest real estate websites for property buying, selling and rental, and primarily makes its money from advertising. It also has a powerful online advisory service for people who want to ask questions about property, the most common being, “What’s my property worth?”

The company recently tapped into their huge database of information, and analysed a vast amount of different factors that contributed to property values. More specifically, they wanted to discover what factors will most influence prices in a particular area.

What they found was that while location was still important, (thank goodness for that,) what was it specifically about the location that made it so important? One important insight was that property values in gay neighbourhoods were consistently better, and gave a better financial return over a period of forty years. They also uncovered the fact that buying the worst house in the best neighbourhood is a terrible idea, and learned why some neighbourhoods smarten up and improve while others don’t.
However, one of their findings even surprised them: the factor that impacted home values the most in urban areas was the distance from the home to the nearest Starbucks coffee shop!

In their book Zillow Talk – The New Rules of Real Estate, authors Stan Humphries and Spencer Rancoff write: “Over a 17-year period (1997 to 2014) homes within a quarter mile of a Starbucks appreciated 96 percent, compared to the average home’s value rising 65 percent…. We looked at how Starbucks affected home values in 20 of the USA’s largest metros, (like Chicago, Philadelphia and Boston.) Starbucks had the biggest impact on home values in these areas.”

Of course, it’s not that easy, and they also cite examples of urban areas where Starbucks stores had a smaller impact on property values. But it was a great predictive indicator of one thing that you should look for when buying a new property.
Of course, this finding shouldn’t have surprised me, it was just another symptom of what I always say – that customers are not rational, logical and unemotional. Nor should they be, because it is their money.

But it is the fact that we are unreasonable that makes us uniquely human. I see it around me all of the time. Customers spend small fortunes to buy branded goods, and I wonder if they are just gullible or stupid… until I do the same and buy something which I know I spent too much on. For some it may be cosmetics or fashion items. For others it may the latest foodie places or nightclubs. For yet others it may be upgraded electronic gadgets, computers and mobile phones. Private schools, holiday destinations, cars, music, airlines, gyms, cold drinks and booze – you name a product category, and I’ll show you a particular brand that offers the same value, but is more expensive than its rivals products and services.

The key question for your business is: How do you create the same perception of value for customers? How can you get your customers to willingly pay a lot more for what you sell – even while they may be conscious that they are being ripped off? Large businesses may have the resources to create desirable brands, but most of you reading this article will be small business owners.

Your best bet is to focus on giving your customers an exceptional, delightful, personal and memorable service experience, one which most of the big corporations will find it impossible to imitate. You may not be able to create the newsworthy “media buzz” that companies with huge budgets are able to organise and accomplish, but you can certainly give your customers something that will make them want to come back, and to tell their friends.

For example…

  • You can let every interaction become personal by remembering them, their names, and their personal details, and engaging in conversations that are meaningful to them. (Hint: talk about their children, their holidays, their work, or their cars, and you will find this works 90% of the time.)
  • You can welcome them into your business by saying things like: “Hey! Nice to see you again!”
  • You can show flexibility by breaking the rules for them.
  • You can build trust by trusting them, rather than forcing them to fit in with the policies, procedures and rules that large companies need in order to survive.
  • You can create special events and parties that they are personally invited to attend, and even participate in organising or performing.
  • You can share information with them that they would not normally have access to.
  • You can spend time chatting to them and explaining short-cuts, or how things work. You can help them to install stuff that they wouldn’t be able to.

These are just a handful of probably hundreds of examples, but you should always be thinking about new ways to make it happen for your business.

And if you are thinking of buying a property, might I suggest that you look for a really nice house in a gay area near a popular coffee shop?

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