Long-time relocation professionals will recall a time when “corporate transferee” connoted much more liberal relocation assistance. Executive careers were often crafted by a series of moves for the same employer. Relocation policies were generally egalitarian and employee-needs based. A transferring homeowner usually had the safety net of a guaranteed buyout program, and relocation companies were expected to buy most of the homes they appraised, as a measure of accuracy and competitiveness.
But flash forward to our (almost) post-recession economy … the mutual loyalties of employer and employee have eroded into shorter tenures and more frequent job changes. Both parties tend to take a more short-term view of relocation opportunities and related assistance. The company seeks to scale relocation assistance to the value of the job or assignment being filled, rather than as a long-term investment in a particular candidate. Employees have proven to be more willing to forego better relocation support in order to gain resumé-building experience that will be more valued by future employers.
The collision of these different motives with sweeping economic changes has profoundly affected transferee demographics. The classic transferee example of a mid-career, buyout-eligible homeowner now represents a shrinking minority of corporate-initiated moves, probably less than a third of the transferee population by most estimates. This means that many homeowners are relocating without home sale assistance benefits or purchase-cost reimbursements.
Granted, some homeowners still retain eligibility for full Guaranteed Buyout (GBO) plans in which an appraisal-based offer underlies any better open-market offer if available. These customers represent a potential transferee listing, a corporate/third-party listing and a purchase referral, so they are valuable and not to be disregarded. They are much more limited in number, though, as most companies restrict these benefits to the top tiers and higher-level positions under their relocation policies.
For brokers and relocation directors, serving this changing market segment is very challenging. The brokerage role in homeowner moves is evolving rapidly: from primarily corporate and “third-party” listings, to mostly owner-generated Amended-Value and Buyer-Value Option sales, to now often unsponsored home-seller transferees. If your relocation business model targets only the policy-supported homeowner, you will be missing out, both from losing traditional customers and from unpreparedness for the growing number of Do-It-Yourself transferees. It’s time to get our definition of the transferring homeowner out of the entitlements pigeonhole!
The emerging opportunity most often overlooked is among that latter group of unsponsored DIY home-seller transferees. You won’t have these handed to you as GBO/AV/BVO initiations because they are ineligible. They operate more as affinity or retail customers, choosing their own firms and negotiating and paying their own costs. They need broker help in valuing their homes, setting listing strategy and marketing effectively.
So why should a relocation director care about this unsponsored group?
• They’re mobile people. They’ll likely move again on a shorter repeat-customer cycle time if served well.
• They’re motivated sellers. Without corporate GBO protection, they need to get a deal done—the sooner the better.
• They influence others. As the DIY crowd grows, water-cooler conversations on broker performance generate new customers.
• They can be the back door to a corporate or RMC relationship. It’s much easier to get an employer’s attention to your services for their sponsored moves if you already have a proven, strong performance record for non-sponsored homeowner moves at that company.
How would you market to them? Essentially, this is a variant of your affinity marketing strategy. You’ll want to consider employer-specific promotions, enhanced services and a special value proposition…and you’ll want to track results carefully—home-sale performance metrics, customer satisfaction, anecdotes and endorsements—all company-specific, too. This is grass-roots consumer marketing even when there is a corporate gatekeeper involved.
At a time when new customer channels are in short supply, this one shows the hallmarks of growth potential and worthwhile returns. We encourage you to consider a new strategy for those many new homeowner transfer moves “outside the pigeonhole.”
John B. Sculley, SCRP, is Vice President/Managing Director of RIS Consulting Group. For more information, email John at email@example.com.