Kevin Thompson is chief marketing officer of Sotheby’s International Realty Affiliates LLC in Madison, N.J.
How Tech Can Interrupt the Luxury Customer Experience
High-end home buyers and sellers may be more familiar with expensive gadgetry, but that doesn’t mean employing the latest tools will satisfy their needs in a transaction.
April 4, 2019
Technology has particular power to enhance the luxury customer experience. Apps like JetSmarter bring the concept of ride-sharing to the world of private-plane travel, and Amazon’s purchase of Whole Foods merges industry-leading tech with a premium brick-and-mortar experience. The mix of technology and traditional industry has also come to real estate, as Sotheby’s partnership with eBay has brought live bidding on properties to online participants. Luxury services are being accessed in more ways than ever before.
Technology’s cool factor is undeniable, but in luxury real estate—where even the wealthiest clients may make only a handful of purchases every few years—great relationships are still essential to sustained success. That doesn’t mean luxury real estate companies and agents have less of a reason to follow technological advancements, but you can’t expect gadgets to replace the human element in your client relationships, no matter how tech-savvy the customers.
Keeping the Luxury in Technology
High-dollar buyers build rich, longstanding relationships with their favorite brands. And it remains the case that brands cannot orchestrate these relationships through technology alone. Only a real person can navigate the conversations that reveal buyers’ aspirations and help them narrow their shortlists until they arrive at the perfect option.
This is true for baby boomers and millennials alike: The new generation of affluent consumers understands how technology plays a role in modern sales. However, it’s wise not to mistake these customers’ affinity for technology as a preference for digital deal-making. Even the youngest luxury consumers still prize human connections, especially in a world where “personalized” recommendations from companies like Amazon can feel more arbitrary than helpful.
You must treat young luxury buyers seriously. Research shows that the number of “mass affluent” consumers in the United States leapt from 24 million in 2007 to more than 30 million a decade later. The top of the market is getting heavier—and young people are driving that growth, according to the National Association of REALTORS®.
Millennials use tech to replace a few traditional agent functions but still benefit from in-person guidance when navigating a changing housing market. Established buyers who have gone through a transaction or two enjoy advanced functionality, as it complements an existing relationship. Across every luxury demographic, real estate professionals remain essential in the homebuying process—and technology will not replace real human engagement. That said, you can follow these tips when using technology to augment the luxury consumer experience.
- Know your client. Agents are responsible for deciding whether a piece of technology is appropriate for the consumer in front of them. Leveraging the right tool at the right moment can secure a sale, but confusing prospective buyers with unnecessary tech could turn them off. Be careful not to throw every new tool at every client. Instead, use the history of each particular relationship to gauge whether individual clients would benefit from the use of a tool. Virtual reality, for example, is popular with people who know how to navigate online reconstructions of houses. People who like to get a feel for a property before they buy might enjoy spending more time exploring the home in a virtual environment. Those who are less able to navigate 3D worlds may not be interested in digital models.
- Customize your relationship management. Historically, real estate companies have not relied on customer relationship management systems. Slow churn and long buying cycles create transactional relationships in which companies ignore consumers until they’re ready to buy again. Today, that approach all but ensures a competitor will swoop in to steal your client before their next purchase. Use a CRM system to keep tabs on every client and keep lines of communication open. Schedule regular check-ins—at least annually—to remind luxury buyers you’re there to help whenever you’re needed. Additionally, invest in tools that help manage relationships and keep buyers engaged by better tracking their interests and preferences.
- Evaluate the trends. Though technology alone can’t build relationships, you should stay updated on the latest technology and schedule regular demos to keep up your knowledge. That way, when a new tool becomes the industry standard, you will already know how to leverage it and can provide the new level of service your clients will expect. Some luxury brands are dipping their toes into Instagram Stories, for example. As alien as it might sound today, platforms like Instagram could one day play a role in helping Gen Z luxury buyers find homes. Companies that fail to keep up with trending tools inevitably struggle to attract the first wave of buyers who may expect them.
- Ask for the training you need. New tools can seem daunting at first, but remember that support is available. If you see an untapped opportunity or do not fully understand the arsenal of digital tools you have, then flag it, ask questions, and get the information you need. Capitalize on opportunities to attend conferences or training to learn the relevant skills you need day to day.
Whether driven by technology or established through old-fashioned in-person meetings, relationships will remain the key to success in luxury real estate for years to come. Technology can make those relationships better, but only when that tech is a complementary part of a personal connection.