Here are the highlights from the conversation:
Tell us a little bit about openhouse.ai:
We are doing something which has not been done before within the home industry. Essentially the home buyer journey in today’s industry starts at the point of conversion. Many home builders don’t have any data about the journey that the buyers have taken to get to that point from when they first engage to where they’ve chosen to say, “Hey I’m interested in learning more about a specific property”. We think that’s an issue. The buyer journey is long and complicated and it’s constantly changing… especially after COVID 19. We’re asking builders to consider the buyer from a full perspective so that they can offer a better service.
What the platform does in its simplest form is learn about the behaviors of the individual and where they’re from. The recommendation engine is using that behavior as well as other data to make predictions about what specifically interests them. This makes their experience exclusively properties or features that are of interest to the buyer and really makes lessens the complexity of the process of browsing within the home builder website.
You can just imagine as a home builder you are trying to create this beautiful website and make it easier for a buyer to find homes. But in reality, the buyer journey is so complicated because typically they have to visit every single page to try to find the product that they want and it becomes a process. Openhouse.ai is predicting what they are most likely interested in as a consumer, whether it’s a type of a home or neighborhood and therefore it makes the journey that much easier am I correct?
Yes, you are! There’s a couple of different dimensions. There is the notion of “have you considered this” at the start. Listings on home builder websites can be very complicated. I know of one where 300 different communities are being marketed at one single time. We reduce the complexity of scope when it comes to communities because we’re saying “these are the ones you might be interested in for the region or here is the floor plan that you might have been interested in this community, but did you know that it’s also available in these six other communities. So, it’s really two levels of recommendation. One is a broader “have you considered this” recommendation but the really fascinating one is the curation of the journey that the algorithm creates. It’s not curation from the builder’s interest point of view, it’s curation from the interests of the buyer and what their preferences are – preferences that I must say they have not told us which is really cool.
Covid 19 has drastically changed Homebuyer trends in a short amount of time. Can you talk to us a little bit about some of these trends that you’re seeing with consumers as a result of the pandemic and what do you think those trends will look like going forward?
Without getting into the details of the statistics, there are a couple of things happening. One, the millennial cohort is in the home market because interest rates are low and there’s more flexibility of where you choose to work. They are now choosing to buy homes and are they’re 40% of the buyer market right now. Homebuilder buyers today are spending more money than they thought they would. They are expanding their budgets and buying between 500-1000 square feet more home than they anticipated. The biggest thing is they’re realizing that the home they loved before isn’t what they love now when you’re stuck in your dining room and working there all day they realize that you know it’s just not perfect. I think the cards are sort of all up in the air and it’s had a big impact on people’s preferences.
Most decisions by builders are driven typically by purchased census type information that’s typically historical in some way and real-time the preferences of the buyers are changing. Builders don’t really have a way to show it. The analytics that we push to the marketer is showing these changes in real-time and in some cases who they thought would be interested is vastly different from their purchased data.
I couldn’t agree more with you john and you’re so spot on with the historic data versus what’s happening right now. Just last year, I was talking to buyers about the trends – the smaller homes, the no-maintenance backyards– because people would prefer to go to a nearby park. Now they want a bigger house and a bigger backyard. It completely changed in a matter of just a couple of months.
So, we know these are the changes that the consumers are facing what about builders what do you see some of the biggest challenges for the builders as a result of COVID 19 going forward?
The biggest challenge that I find, and one of the things that we feel like an organization, is changing the narrative– especially around something they’re not doing today or thought that it wasn’t available. How do we take traditional thinking around the industry and make them move quickly to adjust to these changes? If you look at home builder websites, they all do the exact same thing. They’re all offering the same tools to visualize their product. The focus today is on the home visualization. You’ve got elevation views, interactive floor plans, etc. That’s super important and you’re spending a lot of money on that but to maximize the investment of those assets, you have to make sure that people get there and convert. So, the biggest issue is education and awakening of what’s now possible.
When people hear artificial intelligence, they tend to think of movies where something is controlling our decisions and steering us into a direction we would not have chosen. From your perspective what is it that the home builders need to concentrate on to act in the buyers’ best interest? How does privacy come into play?
The privacy topic is an important one. Openhouse.ai is built to make the buyer journey simpler and it’s in the best interests of the buyer. The builder has zero influence over what the algorithm recommends. They can’t say, “I’ve got this property that’s sitting beside a sewage facility, and while that while the visualization is great…for some reason it doesn’t sell. We want to sell it.” They can’t push a certain agenda with the algorithm which is what people think all the time but that’s not how it works. so again, the algorithm is working for the benefit of both organizations but in an ethical way.
The second thing is the data that we create about the individual is 100 anonymized. We don’t know who the individual is. We don’t know their name or anything about them. We just have this metadata about an IP Address and a journey and that’s important because all it’s trying to do is take them along a path. As a consumer, I entered the website I decided to check out a certain floor plan and maybe I want to favorite that floor plan or when come back to that website it knows where I left off based on my computer’s IP address.
What you’re saying is, I don’t have to start over again but at the same time I’m not forced to provide my information as a consumer.
Correct. Think about how often you left a website because they’ve asked you something when it’s not timely? If we are serving customers timely information that they’re looking for and we’re helping them to make the journey easier, they will return again and again and convert.
We’ve measured within our customers the amount of time it takes from appointment to firm OK, and what we’ve seen is that that the amount of time went from 15 days to 13. So, we’ve dropped the amount of time that they’re actually going through the buying process because they’ve already gone through a much more efficient journey and they know a lot more about what they want.
Where can AI go in the future for the builder industry?
I mean we’re thinking about how our recommendation platform can work in different areas such as the design selection process or pricing. it can be applied to so many different aspects of that customer journey to improve the experience. People’s preferences have changed in terms of the experience they expect from websites and the home building industry has to adjust. The home builder that is presenting the best experience will be the one that actually sells the home over the one that is not.
For the Full Interview Watch our Webcast:
Using AI to Simplify the New Homebuyer Journey – webcast
For more information about OpenHouse.ai please visit www.openhouse.ai