Academic journal article Journal of Housing Research

Real Estate Agent Target Marketing: Are Buyers Drawn towards Particular Real Estate Agents?

Academic journal article Journal of Housing Research

Real Estate Agent Target Marketing: Are Buyers Drawn towards Particular Real Estate Agents?

Article excerpt

New real estate agents are often advised to target a specific niche, similar to the concept of target marketing for firms. Yet, while there is abundant research on how larger firms can identify and target consumer segments (Smith and Cooper-Martin, 1997; Lovelock, 1983), there are few actionable suggestions for a real estate agent to accomplish this same task. In order to attract buyers, real estate agents often post their pictures and contact information, along with property listings. To that end, this research investigates how real estate agent information included in online listings can attract customers, rather than examining the later stages of the buying process, in which personal selling occurs. Once a customer has contacted a real estate agent, the agent should use best practices in professional selling, such as customer orientation and adaptive selling (Franke and Park, 2006), in which each buyer is treated as an individual. Nevertheless, it is still important to understand the segmentation process so that agents can attract customers.

There is an opportunity cost to viewing houses (Pryce and Oates, 2008). So, it is likely that people will only meet with an agent to view a property if they have a sufficiently favorable overall impression of that property's listing. According to the "halo effect," peoples' evaluations are often influenced by salient but irrelevant attributes (Johnson and Vidulich, 1956; Lucker, Beane, and Helmreich, 1981). We opine that real estate agent characteristics influence customers' overall property evaluations. However, these individuals have diverse backgrounds and preferences; thus, two people could form very different attitudes towards the same salesperson. For example, the theory of homophily posits that people prefer others who are like them (McPherson, Smith-Lovin, and Cook, 2001). If homophily holds, people should prefer similar agents. Extending this logic using the halo effect, people might even evaluate properties more favorably if represented by similar agents. Accordingly, our first goal is to examine whether demographic similarity between an agent and a customer can influence the customer evaluations of a property. In addition to homophily, more attractive agents might have advantages over less attractive agents. Salter, Mixon, and King (2012) find that physically attractive real estate agents have higher wages and are more productive than less attractive agents. However, it is not clear whether it is better to emphasize attractiveness or similarity when dealing with customers. Therefore, our second goal is to examine the effect of agent attractiveness.

Agent appearance also influences customer attitudes towards the agent's communications. How property features are presented can influence the selling price and speed of sale (Springer, 1996; Goodwin, Waller, and Weeks, 2014); thus, agents might use different approaches to presenting information about a property. While some agents use a purely factual approach to communications, other agents actively attempt to influence the market by using pathos, rhetorical language intended to make buyers more favorably inclined towards a property (Smith, Munro, and Christie, 2006). Certain buyers may be more accepting of pathos from certain agents than from others. According to the persuasion knowledge model (PKM), people evaluate communications from persuasive agents based, in part, on agent knowledge (Friestad and Wright, 1994). When a persuasive message is deemed inappropriate, customers reject the message. When meeting an agent for the first time, customers have little agent knowledge beyond stereotypical factors, such as physical appearance. Hence, an agent's appearance can shape whether persuasive messages are accepted or rejected. For example, if customers feel attractive agents are more trustworthy than less attractive agents, then they may be less guarded towards persuasive communications from attractive agents. Hence, pathos is more likely to be effective. …

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