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Customer Reviews are Essential for Business Growth

Customer Reviews are Essential for Business Growth

Customer Reviews are Essential for Business Growth

Our current economy is making all types of sales difficult (with perhaps the exception of groceries). Although customers have been reallocating resources, their behaviors before making a purchase and commitment have not, especially when it comes to customer reviews. Customers want to see that your business, its products, and its services are reviewed before they make a commitment.

Customers are Reading Reviews

According to the Spiegel Research Center, nearly “95% of shoppers read online reviews before making a purchase.” Additionally, according to BrightLocal, “90% of consumers used the internet to find a local business within the past year.”

In an earlier survey bonline-review-statistics-2019y the same research group, it was determined that “93% of local consumers use reviews to determine if a local business is good or bad.” Additionally, those customers care about how businesses respond to the customer reviews. All of this information gathering creates action within the customer. The average customer must read at least ten reviews before feeling able to trust a business, which begs the reasoning as to why having a place to gather these reviews is essential for your business. People want information on it before making the decision to use your business or product.

 

 

Online Customer Reviews Equal In-Person Sales

The above data and information is to qualify why it is important to not only solicit reviews from customers and clients, but why it is also important to maintain those reviews with responses. According to the Spiegel Research Center, “displaying reviews can increase conversion rates by 270%.” Sites and Networks like Facebook and REALLY that allow you to enable comments and reviews will yield positive results for you and your business should you manage those responses well. Additionally, purchase likelihood improves “15%” when buyers read verified buyer reviews over anonymous posts.” Most customers will not even take action unless there are online reviews for you and your business. When evaluating similar businesses and products with the same rating, a person is more likely to select the one that has the most reviews.

Improving Online Customer Reviews

You can improve or maintain your online reviews with some time, monitoring, and good ol’ customer service. Here are three simple ways that you can better your online reviews.

  1. Educate Customers on Leaving Reviews. Many customers will want to help you and your business, but do not know where to go or what to write. Simply taking some time to direct them to a specific site and explaining the importance of a review, regardless of the content, can be very helpful for the future growth of your business.
  2. Prioritize Customer Service. Good news spreads quickly, bad news spreads faster. If you want good reviews, you will have to cultivate a business where customer service is a priority. Great customer service will yield great reviews and return customers.
  3. Respond Affirmatively to Negative Reviews. Be sure to monitor your online presence and respond to those that leave negative feedback. Be sure to tailor your response toward making things right for the customer. Customers care more about how you handle a bad situation more than the actual bad situation itself.

 

Reviews for the Win

In the end, an online presence is essential for consumers in modern business. The more positive reviews, the better for business. The more reviews with your engagement, the better for business. Reviews will give your customers the sense of trust in the products and services you provide. Trust in spending time on cultivating online reviews as it is an incredibly impactful portion of your business.

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Home Purchase Sentiment – Most Renters are Ready to Buy

Home Purchase Sentiment – Most Renters are Ready to Buy

Home Purchase Sentiment – Most Renters are Ready to Buy 

Fannie Mae has conducted a national survey for the past few years asking questions to generate a result on their Home Purchase Sentiment Index (HPSI). According to Fannie Mae, the HPSI “reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making.”

Home Purchase Sentiment Low

This past April, the Home Purchase Sentiment Index® (HPSI) hit an all-time low at the height of the pandemic lockdown. We have yet to see what the future holds, but for now, the past two months have started to increase and gain a more positive view of homebuying. The Home Purchase Sentiment Index increased 9.0 points in June to 76.5, building further on the prior month’s advance after approaching a survey low in April. According to Fannie Mae, “Four of the six HPSI components increased month over month, with consumers reporting a significantly more positive view of homebuying and home-selling conditions, as well as greater optimism regarding home price appreciation. Year over year, the HPSI is down 15.0 points.”

Home Purchase Sentiment Increase

According to Doug Duncan, Senior Vice President and Chief Economist, “a second month of improvement in June allowed the HPSI to regain some of the sharp losses in optimism observed in March and April.” This home purchase sentiment for renters is especially high; actually, the highest it has been among renters in five years.  This information suggests favorable conditions for first-time homebuying. This data is “consistent with the recent rebound in home purchase activity.”

Graph from Fannie Mae National Housing Survey

 

Supply of Homes For Purchase

Homeowners seem to have taken note of the home purchase activity and the resulting lack of housing supply. They, too, have an increased share in the sentiment of it being a good time to sell a home. According to Doug Duncan, “this activity may cool again in the coming months, depending on the extent to which it can be attributed to consumers having chosen to delay or to accelerate homebuying plans due to the pandemic.” Many survey respondents are worried about the economy. Many respondents cite concerns about job security. This is the key takeaway for most renters and homeowners with taking on a mortgage.

As previously mentioned, many homeowners do believe it is a good time to sell, however, the lack of inventory continues to drive prices up.  According to Realtor.com, the national inventory declined by 27.4 percent year-over-year, and inventory in large markets decreased by 26.5 percent. This has driven prices up nationally by 5.1%. Due to low mortgage rates and that limited inventory, buyers do not seem to be arguing as much against the market.

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Going Forward: Housing Market Recovery and Economic Impacts

Going Forward: Housing Market Recovery and Economic Impacts

Going Forward: Housing Market Recovery and Economic Impacts

After the mandatory lockdowns that many areas of the world experienced through mid-March and April, the Housing Market is seeing shifts that project recovery. Many experts agree that there will continue to be an increase in economic activity that will positively impact Housing Market recovery.

Right Now: Global Economy

Upon first glance, the current numbers for the Housing Market and Economy do not look great. The IMF projects global growth at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. The recovery of the entire global economy is more uncertain than other specific industries such as the Housing Market.

 

Right Now: Housing Recovery

According Diana Olick of CNBC, “pending home sales spiked a stunning 44.3% in May compared with April, according to the National Association of Realtors.” That increase is the largest single-month jump ever in the history of the survey. The expectation of a 15% increase was shattered; however sales were still 5.1% lower than compared with May of last year.

Even though sales had fallen 22% for the month in April, since the economy shut down to slow the spread of COVID-19, buyers were still out during the month of May. Chief economist for the NAR said that this bounce back “also speaks to how the housing sector could lead the way for a broader economic recovery.”

Continued Recovery For the Housing Market

In order to keep these numbers climbing back up, several things need to be in place. Very notably, the amount of inventory on the market needs to increase. Many experts and local agents are struggling to find inventory to meet the demand, especially in the suburbs. Buyers are also looking for larger properties that offer home offices and nice kitchens. Additionally, construction needs to begin again at the pace with which it once was prior to lockdowns.

The supply of existing homes for sale at the end of May was nearly 19% lower annually, according to the NAR. Although, building permits, which projects future construction, did increase a bit. Additionally, newly built homes did well with signed contracts “jumping nearly 17% in May, compared with April, and were 13% higher than May 2019, according to the U.S. Census. Builders have been seeing strong demand from buyers looking to leave densely populated urban areas.” According to George Ratiu of Realtor.com, the data gathered by Realtor.com shows that there is a -19% YoY of new listings.  Due to this, builders are benefiting and seeing increases in requests and contracts.

Additionally, low mortgage rates will hopefully help buyers as prices increase. According to NerdWallet, the average 30-year fixed rate as of today is 3.122%. These types of rates have been very typical the past few months. They have helped many refinance or choose to buy a slightly pricier home that was more easily managed by the low rate. Economists are hoping that the housing market recovery will continue on a positive trend.

What’s Next?

With hotspots emerging throughout the Southeast and West, experts are wondering if the predicted and current trajectory of increased home sales will continue. Come this winter, the Realtor.com economics team is predicting another dip, siting the idea of a “W” shaped recovery. Per Forbes, “the company’s economics team, national home sales will improve in July, August, and September, largely driven by demand from millennial shoppers and transactions in secondary markets, before they decrease again due to a projected winter spike in coronavirus cases.”

 

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Business Strategies For Covid-19 Challenges

Business Strategies For Covid-19 Challenges

 

There is no doubt that COVID-19 has affected every single system on Earth. Some businesses are booming, some are floundering, and some are finding ways to adapt to the changes. All businesses know and understand that there are always risks and potential risks, but many did not have systems in place to handle this type of worldwide upheaval. Below you can find some understanding of risk and business strategies to address the challenges caused by COVID-19.

Systematic Risk, Systemic Risk, and Systemic Shock

According to Investopedia, “Systematic risk is the overall, day-to-day, ongoing risk that can be caused by a combination of factors including the economy, interest rates, geopolitical issues, corporate health, and other factors.” Systematic risk is something most companies plan for and make regular changes in preparation of possible occurrences that seem forecastable. These types of risks are “inherent to the entire market, attributable to a mix of factors economic, socio-political and market-related.”

Systemic Risk “describes an event that can spark a major collapse in a specific industry or the broader economy.” A perfect example of systemic risk is the 2008 Lehman Brothers collapse. Systemic risk is harder to quantify and harder to predict, whereas a systematic risk is more quantifiable and can be anticipated, in some cases. Systemic risks can lead to systemic changes when a systemic shock happens within a system.

With regard to systemic shocks, COVID-19 is the shock felt around the world. Every single company, every single industry, and every single worker have felt the shocks and aftershocks of this disease. Businesses need to be ready to adapt to these shocks and changes. Given the rapid alteration of everything around them, most businesses have found this to be challenging and, at times, seemingly impossible.

Business Strategies to Change and Adapt

In the matter of just weeks, many industries saw systemic and systematic risk create the perfect storm. Our world felt the systemic shock of COVID-19 and many companies and small businesses struggled as their revenues practically bottomed out. Once booming businesses attempted to mitigate financial destruction with selling off assets, redistributing employees, cutting costs, and “applying for government support.”

For a brief time, it seemed like there were few signs of life with regard to business. Slowly, but surely, a pulse emerged. Many businesses, such as Real Estate, adapted with completely virtual tours. Many professionals started using internet based document signing services such as Docusign. Large and small business began leaning on technology more than ever to stay afloat during this time.

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REALLY is a referral processing utility that makes exchanging referrals fast & easy.  Business Professionals who send lots of referrals usually receive lots of referrals.  Use REALLY to make you and your business well known. 

Proactive Business Response Strategies

Now that many companies have felt the initial blows of the systemic shock that is COVID-19, some are having a moment to think about seizing possible opportunity.  According to the MIT Sloan Management Review, there are “three generic response strategies to match organizational infrastructure with emerging market trends. Significant opportunities are available to those organizations agile enough to adjust their infrastructure, their product/service portfolio, or their route to market.”

Those three strategies are as follows

  • Strategy 1: Same Products, Different Channel

    • This strategy is when the business offers “the same (or similar) products and services through an online channel. This may occur through the digitization of physical products or, in the case of services, through a technology-mediated delivery solution.”
    • Examples: Nike and their shift to online at-home workouts, yielding 35% growth in online sales. Education and online classes. Restaurants and at home meal kits.
  • Strategy 2: Same Strategy, Different Products

    • This strategy addresses the different demands that have occurred due to COVID-19. Due to these different demands, there is an under-use of organizational infrastructure. For example, hotels and bars sit empty, factories have slowed their production, etc. Due to these shifts, many companies are taking advantage of their pre-exisiting infrastructure to offer different products or uses.
    • Examples: Many companies started producing hand sanitizer, whereas others like GM, Ford, and Dyson started producing ventilators. Hotel chains have offered rooms to hospital staff and even COVID-19 patients.
  • Strategy 3: Same Products, Different Infrastructure

    • This strategy addresses businesses that are “suddenly struggling to meet the demand for their products and services, some companies need to quickly augment their infrastructure to increase production and/or delivery capacity. Finding new infrastructure is easier said than done and often requires collaboration with external partners, but a number of organizations worldwide are taking inventive steps to bridge such gaps.”
    • Examples: Amazon partnered with Lyft to help augment the hiring an additional 100,000 drivers. “In Sweden, over 1,000 laid-off Scandinavian Airlines workers were offered fast-tracking to help the country’s health care system fight the coronavirus pandemic.”

Business Strategies Flow Chart

Proactive COVID-19 Response StrategiesImage Courtesy of MIT Sloane Management Review

Business Strategies For the Win

Regardless of your business, you have felt the impacts of the systemic shock that is COVID-19. Finding ways to best leverage the infrastructure or product that you already have seem like best bets when it comes to trying to adapt to the systematic and systemic changes.

 

 

 

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Housing Shift: From Urban to Suburban

Housing Shift: From Urban to Suburban

 

With the onset of COVID-19 leaving much of the world on lockdown, housing shifts from urban to suburban areas are expected to increase.

Losing Its Allure

Large cities for the past few years have been losing their allure to many residents. There has been a noted shift and flight from urban areas. According to William Frey, a Senior Fellow at The Brookings Institution, this slow started before the pandemic. In his findings, he reports that “the nation’s three biggest metropolises—New York, Los Angeles, and Chicago—began the decade with positive growth rates that turned negative over the past several years. In fact, seven of the 11 largest metropolitan areas—including Washington D.C., Miami, Philadelphia, and Boston—registered their highest growth rates of the decade in either 2010 to 2011 or 2011 to 2012. This is the case for 11 other major metropolitan areas.”

Consequently, Frey states that at the same time, the nation’s “nonmetropolitan territory began to show glimmers of growth after losing population for most of the decade”. In recent years, the largest share of movers were young adults. They were more willing and able to locate to smaller areas in all parts of the country and increasingly to suburbs.” Additionally, The New York Times, also citing Frey’s work, stated that before the pandemic, millennials and older members of Generation Z were already increasingly “choosing smaller metro areas like Tucson, Ariz.; Raleigh, N.C.; and Columbus, Ohio, according to Mr. Frey. Also growing were exurbs and newer suburbs outside large cities.”

Will Housing Shifts Continue?

In the midst of pandemic, Frey and other experts wonder if the demographic shift will continue. According to Jonathan Miller, CEO of MillerSamuels, there will be continuous shifts for the next few years as a result of the pandemic. In the past when the Great Recession happened, it sent people back into cities, so many wonder if this recession will do the same. However, the signs of life from those virtually hunting for homes are in favor of an exodus from cities.

Due to the blame on high-density residential living and the stressors of shelter-in-place orders when you don’t have any access to an outdoor space, the migration seems to be underway. According to Jonathan Miller, “the rising number of suburban single-family rental inquiries from the city has provided the initial evidence of a trend. City residents seem to be looking to test drive the suburbs and commute to their city job when ‘shelter in place rules begin to ease.'” A similar shift of those looking to get out of the city also occurred after the 9/11 terrorist attacks. It did, however, reverse just a few years later.

Housing Shift Possibilities

  1. Exurbs and Suburbs. The Exurbs and suburbs will see a jump in incoming residents. With many planned communities and spaces like this surrounding cities, many will seek areas with more space and designated outdoor living areas.
  2. Second-Home Boost. Consumers with the funds may start to seriously consider and commit to that second property in areas that surround cities. According to Jonathan Miller, This potential trend would be contrarian to other significant economic downturns as second-homes are not considered ‘second-priority.'”
  3. Taxes Will Be Even Less Alluring. Many state officials have been briefing their residents about the forecasted budget deficits. Many areas that were not hit as severely with the COVID-19 Crisis or those with lower tax rates can look incredibly alluring to those stuck in high-density, high-tax spaces.

 

Housing Shifts with REALLY

Now is a wonderful time to join REALLY to start networking and growing your Business Referral Community. Should people continue to act on the increased searches and inquiries that real estate agents are receiving, there will be a high need to have a solid network of qualified business professionals all over the United States.  REALLY is a simple tool for business professionals to track and exchange referrals with speed and ease. Regardless of how you choose to use REALLY, the housing shifts that are occurring will surely impact business for many, and REALLY is a tool that you want to have as these changes occur.

 

 

Why wait another minute?

REALLY is a referral processing utility that makes exchanging referrals fast & easy.  Business Professionals who send lots of referrals usually receive lots of referrals.  Use REALLY to make you and your business well known.