Value-Based Service Quality for the New Generation of Home Buyers

June 1, 2011

By Stacey Schetzsle, PhD and Casey Ray Rusk, NALP

With a constantly changing market and a new generation of home buyers on the rise, value-based service quality will play an important role in customer satisfaction. Service industries, including the real estate industry, have begun to engage with consumers who insist on non-traditional service processes. Value is created throughout the service delivery process as opposed to previous, result-oriented models. A value-based approach is especially important in the real estate industry where customer decisions are emotionally and aesthetically influenced. Competitive markets, new technologies, and more demanding customers are changing the way business is conducted. Realtors recognize that the new generation of home buyers provides distinct opportunities and challenges. The Millennial Generation is quickly gaining prominence in the real estate market and first-time home buyers have different expectations about the service delivery process compared to previous generations. Communication methods, information gathering techniques, sales process efficiency, need customization, and the use of emerging technology differentiate this generation from their predecessors. Continued success with Millennials will depend on the real estate professional's willingness to adapt sales and marketing activities to meet the expectations of a new generation of home buyers. Satisfaction with services is found to be a primary relationship determinant in the service industry (Siddiqui and Sharma 2010). Realtors must understand and meet the expectations of the contemporary home buyers by providing flexible home buying solutions and personalization through preferred technology-aided methods. Sales organizations are using technology as a strategic tool to enhance sales performance (Sharma and Sheth 2010). Realtors are using technology to make the service delivery process more efficient. Previous research on sales technology has traditionally focused on areas such as CRM, SFA, and additional tools to improve sales force productivity and performance, however there are many emerging areas to explore. With new technology easily accessible and heavily used by customers, sales organizations can leverage technology's unique offerings to satisfy customer needs and expedite the sales. The purpose of this paper is to present technology applications that focus on the real estate industry to provide a value-based service delivery process that meets the expectations of Millennial Generation home buyers.

Service Quality

Service Quality provides additional value as an interactive relativistic consumption preference experience (DeRuyter et al. 1997). In a service context such as real estate, added value represents the quality of process, interaction, and experience. The service delivery process includes value-based service quality in addition to the purchase outcome. Previous measures of service quality are based on the comparative judgment of customer expectations and perceptions of the service process. Customers form expectations prior to the interaction with the agent, develop perceptions during the service delivery process, and then compare expectations against the perceptions of the service performance. A recent study conducted in the service industry examines underlying dimensions of customer satisfaction. Of the dimensions, Siddiqui and Sharma (2010) found that corporate image impacts satisfaction with the company and technology impacts satisfaction with functional services. Corporate image refers to the innovativeness in introducing products and processes, courteous agents, value for the money, and efficient procedures. Technology includes such items as easy online transactions, prompt handling of concerns using online communication, and proactive information through a variety of sources, including email or texting. Millennial home buyers expect these value-based services to provide quick, customizable solutions. Providing services using modern communication and presentation aids may influence perceptions of corporate image and technology to impact overall customer satisfaction in the real estate service industry.

A New Generation of Home Buyers

How to Turn Your Employees into Brand Champions

Representing persons born between 1977-1994, the Millennial Generation is entering the housing marketing by the masses (US Census Data 2009) and represents a dominant force in the real estate market. Presently, there is a focus in literature on the need to adapt, engage, and manage relationships with Millennials differently than previous generations. Failure to identify generational gaps can result in misunderstandings, miscommunication, and perceived under-performance in the service delivery process. Millennial home buyers hold different expectations and views on the home buying experience and outcomes. For instance, these consumers communicate differently, preferring text messaging and social networking media to build relationships compared to traditional communication methods (e.g., phone, fax, email). An online study revealed that since 2008, U.S. cell phone subscribers send more text messages than they make phone calls each month (Kaplan 2010). In 2000, 12.2 million text messages were sent each month, compared to the more than 7.2 billion sent each month only 5 years later. Translated, these figures reveal that 240 million text messages are sent each day and approximately 160,000 text messages are sent each minute. As a result, realtors are adapting communication methods to meet these consumer preferences. For example, some realtors have incorporated text message prompts with yard signs at their listed properties to provide convenient property information. A text message prompt that may read, "Text 'info' to 55555," can provide instant listing information on any given property at the touch of a button. This added feature diversifies the buyer's communication options and incorporates multiple platforms to receive property information. The average age of a first-time home buyer is 30, signaling that the Millennial Generation is quickly transitioning into the home buying market (Daily Real Estate News, Oct 2010). Today's first-time home buyers have set a new standard for technology use in the home buying process. These "tech savvy" buyers are fast paced; they move fast and expect the people around them to move just as fast. Tech savvy buyers use smart phones to text message and email, expecting instantaneous responses. Realtors serving this market will need to be highly accessible and quick to respond to consumer needs and desires.

Sales Technology Usage in the Service Delivery Process

Realtors play an important role in developing and maintaining customer relationships. Relationships are built based upon the value and attention that an agent brings to the service delivery process and the agent's interaction with the customer. Technology is used as a tool to facilitate the customer-salesperson interaction (Ferrell et al. 2010). In relationship selling approaches, salespeople can leverage technology to enhance and provide additional value to the sales process. Use of technology in the service delivery process provides opportunities for the salesperson to uncover and communicate identified solutions. More specifically, value-based service quality activities use interactive technologies to engage customers, enhance sales presentations, and improve the efficiency of the sales process. For example, a realtor may incorporate an Apple iPad equipped with relevant search process applications into the service process. New technology has empowered the buyer to customize their property search in real-time, and the iPad enables the realtor to adjust to facilitate the buyer's needs and wants without unnecessarily extending the service interaction. Additional value-added solutions include use of technology to replace remedial tasks and information requests. Technology may be used to assist a customer in the information gathering process and expose the homebuyer to a full range of services that an agent can provide. For example, home buyers may be granted access to technology that allows them to search listings, neighborhoods, photos, and additional information to determine available options. With the ease and availability of new technology, home buyers can narrow the search for a home based upon online postings. In this case, the role of the realtor is to focus on the service process of finding, showing, and navigating the customer through the home buying process. Using technology has enabled realtors to communicate quickly, provide real-time alternatives and solutions, and build a trusting relationship with Millennial home buyers.

Using Technology to Meet Millennial Generation Expectations

As "tech savvy" home buyers, the Millennial Generation expects quick communications and solutions. Many realtors have identified one way to meet this demand by incorporating the Apple iPad into the service delivery process. Using the iPad throughout the delivery process helps agents build relationships and improve efficiency in the home buying process. Relationship building applications on the iPad allow agents to manage contacts, take notes during the discovery process, send emails, update and communicate through social networking sites, quickly provide customers with information about listings, and customize property searches and comparisons. In addition, iPad provides applications to improve efficiency when agents create advertisements, post listings, provide e-versions of documents and automate the closing process. The iPad uses a Wi-Fi connection or a cell phone carrier's 3G connection, which allows agents access information anywhere to provide quick responses to client demands. Below are ways realtors can incorporate iPad as a sales tool to help them provide a value-added 'wow' factor to the service delivery process:

Be Relational

  1. Portable Client Management: Manage client information in the office or on-the-go with numerous iPad applications (apps). Storing and accessing client information from any location will increase connectivity and provide greater accessibility. The realtor can structure specific category searches based upon client needs and quickly forward updated listings to clients in the market for this size of home. Frequently staying in connection with home buyers and customizing property searches allows realtors to build and maintain relationships.
  2. Access Most Current Listings: With the iPad's wireless and network capabilities, realtors can easily access web-based information for clients, including home information sheets, even while out of the office.
  3. Check Email and Set Appointments: The iPad with Wi-Fi and 3G compatibility allows the agent to use email and set appointments anywhere. Accessibility 24/7 allows real estate agents to be in constant contact with clients and other agents.
  4. Get Face Time with FaceTime: When it is not possible to have a face-to-face meeting, iPad's FaceTime app enables the realtor to videoconference with other iPad/iPhone users anywhere a wireless network is available.

Market Your Product

  1. Presentation Applications: Realtors can use the KeyNote app to create and present presentations on-demand. Millennials are highly visual consumers. Presenting listings, virtual tours, and immediate access to property information provides a value-added experience. Realtors can provide visuals by displaying the iPad at open houses or sharing visuals while touring homes.
  2. Share Listings and Property Photos - in High-Def: Realtors can use the iPhoto app to upload and share pictures of past and current listings. High-definition pictures and albums can also be uploaded and shared though email, Internet listings, or even Facebook.

Increase Efficiency

  1. Find Accurate Data and Provide Quick Solutions: Create charts and graphs for up-to-date market views thereby providing clients with quick solutions. Applications such as ZipRealty and the Numbers app enable the realtor to compile data on-the-go about specific houses or a particular neighborhood. The data can then be converted quickly to help determine listing prices or make quick decisions.
  2. Map-plications: Create maps and quickly get detailed directions for you and your clients. The pre-installed Map app and the downloadable MapQuest provide real-time, accurate data on the iPad. A real estate agent can use the MapQuest application to visually compare housing prices of homes sold in an area and display the results for her client.
  3. Document Management: Providing information electronically using e-documents will streamline the service delivery process. Realtors can provide rich data (charts, graphs, comparisons) and forms electronically. iAnnotate is an iPad applications that allows users to save and share important documents and forms into a PDF, even enabling users to produce legal, usable signatures on the PDF file. Closing documents, contracts, and agreements can all be finalized and saved into an electronic format, which can then be shared online, through USB, or on a CD.

Realtors must understand and meet the expectations of the Millennial Generation by providing flexible solutions through leveraging new technology during the sales process. Using an iPad throughout the service delivery process is just one technology-based tool that supports realtors with relationship-building activities and improves efficiency in the home buying process. The chart below outlines some of the best iPad apps for realtors:

Table 1
iPad Applications for the Real Estate Industry

Activity App Benefit
Look up listings App or Zillow Allows the user to find listings close to their location using GPS
Sign Contracts Zosh (SP) Allows the user to sign and write contracts in any location (no longer confined to the office)
Paperless Docs Quickoffice Gives the user Microsoft Office-like programs (MS-Office is not compatible with the iPad
Maps, Neighborhoods Google Earth, MapQuest, Blue Atlas Broker Version 3 Allows the user to pinpoint his location and identify proximal selling benefits (close by selling advantages)
Presentations Apple Keynote Allows the user to put together presentations on their listings (a PowerPoint-like program)
Easy access to files Dropbox Allows the user to sync her iPad documents with her computer, and vice versa

Managerial Implications

The paper has some important managerial implications. With the entrance of Millennial Generation home buyers on the rise, it will be important for realtors to adapt the sales process to provide a value-based service delivery process to meet the expectation of the Millennial market. Agents should consider value-based sales activities to meet Millennials' expectations by incorporating technology to enhance customer interactions and expedite the home buying process. Realtors need to have a clear understanding of Millennial expectations before they can attempt to build relationships and incorporate activities into each dimension of the service delivery process. Therefore, management should not only focus on customer satisfaction with the sales process and outcome, but also assist agents on improving customer perception of service quality provided throughout the service delivery process. This article provides managers with service quality improvements in real estate market and improving Millennial Generation satisfaction as they enter the home buying market for the first time. Incorporate technology to enhance relationship and sales process experiences. Managers can use technology, such as iPads, reduce resource expenses, provide agents with strategic tools to create customized real-time communications and home buying solutions desired by the Millennial home buyer.


Daily Real Estate News (Oct 2010), "How to Reach the Millennials." DeRuyter, Ko, Martin Wetzels, Jos Lemmink, and Jan Mattsson (1997), "The Dynamics of the Service Delivery Process: A Value-Based Approach," International Journal of Research in Marketing, 14, 231-243. Ferrell, Linda, Tracy L. Gonzales-Padron, and O.C. Ferrell (2010), "An Assessment of the Use of Technology in the Direct Selling Industry," Journal of Personal Selling and Sales Management, 30 (2), 157-165. Kaplan, Seth (2010), "The Communication Shift: Don't Call Me...Text me!" Sharma, Arun and Jagdish N. Sheth (2010), "A Framework of Technology in Consumer Selling: Implications for Firms and Sales Management," Journal of Personal Selling and Sales Management, 30 (2), 121-129. Siddiqui, Masood H. and Tripti Ghosh Sharma (2010), "Analyzing Customer Satisfaction with Service Quality in Life Insurance," Journal of Targeting, Measurement and Analysis for Marketing, 18 (3/4), 221-238. U.S Census Bureau Data (2009).

About the Authors

Stacey Schetzsle, PhD
Assistant Professor, Department of Marketing and Management, Ball State University

Dr. Stacey Schetzsle (PhD-Purdue University) is currently an assistant professor in Marketing and Management, specializing in professional selling and sales management, at Ball State University. After receiving her undergraduate degree in selling and sales management at Purdue University, she spent three years in business-to-business sales and corporate training before returning to Purdue to earn a master's degree and PhD. She has worked on several consulting projects, focusing on a variety of personal selling, sales management, and leadership areas. Her teaching has been focused on professional selling, advanced selling, corporate partner development, and executives in the classroom series, sales internship programs, and marketing. Her research interests include behavior issues related sales and sales management. Specific topics include sales team cooperation, sales education, and trending topics in the sales field.

Casey Ray Rusk, NALP
Graduate Student, M.S. Family and Consumer Science with a Concentration in Residential Property Management, Ball State University

Casey Rusk, NALP, graduated from Ball State University with a Bachelor of Science in Marketing in May of 2010. Casey is currently getting is Masters at Ball State University in Family and Consumer Sciences with a concentration in Residential Property Management. Casey has done several internships in sales, marketing, social media and is currently working with Barrett & Stokely Inc, an Indianapolis-based multi-family housing company.