Proven tactics for selling homes to the generations

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Understanding generational influences could be the difference between closing the sale and having potential buyers walk away. Here are some things you should know about how various generations make purchasing decisions, and negotiating strategies that could backfire on you.

Understanding generational influences could be the difference between closing the sale and having potential buyers walk away.

June 11, 2011

A 40-year-old couple picks out a home site and a floor plan. They’re pre-qualified for a loan. As the sales agent explains the option-selection process, the husband has a question. He doesn’t understand why he can’t break option packages and pick items individually, or why the color choices are all various shades of brown.

“That’s our policy,” the sales agent says with a smile and a shrug. “It’s just the way we do things.”

The next thing the agent knows, the couple is saying they need to think it over. Follow-up phone calls, e-mails, and letters are unreturned. The agent doesn’t know what went wrong.

What went wrong was that the agent tried to act corporate with a Gen X’er. These were the latchkey kids who raised themselves. They have no patience with what to them appear to be nonsensical policies. Telling them, “That’s just the way we do things” is like saying to a cop, “What’s the big deal?” It’s not going to get a sales agent anywhere.

Or try out this scenario: First-time buyers in their late 20s come into the sales office. They’ve done their homework online and they know they want this community. The sales agent encourages them to sign a contract that day to hold their home site. They say they need to talk to their parents first.

“I know it’s a big step, but you’re the home buyer,” the sales agent says. “This is your decision and no one else’s.”

Big mistake. Tampa, Fla.-based new-home sales trainer Kimberly Mackey always tells sales agents that when they’re dealing with Gen Y buyers, ask them this question: Who else is involved in the purchasing decision?

“Usually, it’s one parent, and sometimes both sets of parents,” Mackey says. “Gen Y has a very different relationship with their parents than Gen X.”

Most sales agents have gotten at least some training on negotiating with different personality types, and it’s certainly important to understand those. But beyond recognizing personality types and ethnic sensibilities, sales agents would do well to take into account a buyer’s generation when choosing a closing strategy.

Neil Howe, a generational researcher who helped coin the term “Millennials,” notes that each generation has its own place in history and a certain collective self-identity.

“Each of these generations has some kind of life agenda shaped by their childhood and coming of age,” says Howe. “It influences everything in their lives.”

That includes the way they perceive negotiation and conflict, says Meagan Johnson, who with her father, Larry, wrote “Generations Inc.: From Boomers to Linksters — Managing the Friction Between Generations at Work.”

“Each generation has points of no turning back, points where the way the previous generation did things doesn’t make sense,” Meagan Johnson says. “For Gen Y, it’s the rapid deployment of digital information.”

Here are some things you should know about how various generations make purchasing decisions, and negotiating strategies that could backfire on you.

Selling to Traditionals

Traditionals were born before 1945. The category sales associates are most likely to see are from the Silent Generation, people born between 1925 and 1945.

Jane Marie O’Connor, lead author of “Selling to the Active Adult,” notes that the qualities this generation is known for are commitment, conformity, and responsibility. The first generation to be born largely in hospitals, they are the younger siblings and the children of the GIs who fought in WWII. “They were not expected to do anything better than the GIs,” says O’Connor. “They were expected to adapt to what the GI’s did.”

This generation is generally conservative and private about what they have. They’ve learned to save for a rainy day. “How that translates into sales is that you can’t sell them something they don’t want,” O’Connor says. “They’re looking at properties 10 to 12 times. There’s no sense of urgency.”

O’Connor’s recommendation for negotiating with them is to go back to the old process of making a chart of the pros and cons of the community and the house they’ve selected.

Selling to baby boomers

The generation born between 1946 and 1964, Baby Boomers basically rejected everything about their parents’ love of conformity. This was the generation that went through the civil rights movement, the Vietnam War, the hippie movement of the 1960s, and Watergate.

What boomers want in a house is individuality, O’Connor says. “They don’t want to drive down the street and say, ‘Mine is the third green house on the left,’” she says. “Leading-edge builders are starting to get it. They’re going back to traditional neighborhoods where there are differences between the houses.”

What they want from the buying experience is a sense of connection.

“Baby Boomers want to feel right about the whole thing,” says generational researcher Neil Howe. “It has to be a meaningful decision. They need an emotional bonding.”
Instead of taking the rational approach of crunching numbers and making a chart, help boomers see themselves enjoying life with their children and grandchildren, and improving themselves.

“You can sell boomers just about anything they think will enhance their lives,” O’Connor says.

Selling to Generation X

Born between 1965 and 1980, Generation X was the first generation to grow up with predominantly working mothers. They came from school to empty houses and fended for themselves. They have a sense of survivalism, tenacity, and resiliency that has been widely noted.

They’re very comfortable with risk, they think outside the box, and they’re savvy negotiators who are prepared to walk away from deals, Howe says.

They’re conscious about value and price, and they like the idea of getting rid of the middleman to cut costs. “This is the generation that wiped out the travel agent,” Howe notes. They’re suspicious of statistics and will question them, so don’t throw out numbers you can’t back up. Even better, be pre-emptive and tell them where your numbers come from before they ask.

The easiest way to blow a sale with a Gen X’er, generational researcher Larry Johnson says, is to push him hard to make a decision right now. “As independent buyers, they’re probably going to resent and resist direct pressure,” he says. “Lay the information out there and let them make their decision. Gen X’ers will make decisions quickly because growing up, they had to.”

Selling to Generation Y

Born between 1981 and 1995, Gen Y’ers were raised by Baby Boomers and they’re exceptionally close to their parents. In school, they were taught to work in groups and their after-school lives were highly scheduled, often with team activities. The worst thing you can do is push them to make a decision without input from their parents and peers. This will be a group activity.

What they want from you is authenticity and transparency. They want to be able to trust you to be honest with them and guide them through the process.

“They’ve grown up at a time when our trust in institutions, government, the church, school, everything, is much lower,” says Kit Yarrow, chair of the Department of Psychology at Golden Gate University in San Francisco and author of the book “Gen Buy.” “I’ve seen them pay more for a product — Zappos is a great example — because Zappos is personified as a trustworthy friend,” says Yarrow.

As a home builder, you actually have an advantage with Generation Y, Yarrow says.
“This generation grew up understanding that new is better in a way that other generations haven’t,” she says. “The older generations put a lot of value in tried and true. This generation thinks tried is tired.”

As long as you objectively demonstrate why you meet their needs (third-party certifications carry a lot of weight), they aren’t inclined to haggle about the price.
“Gen Y thinks if someone has a great product at a great price, then why do we have to do this dance?,” Yarrow says. “Authenticity has a way of proving that you have something great at a good price.”

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