No Need To Fire Up The FMRI’s: Austerity is The New Black
Back in 2005, at the peak of the housing bubble, there were plenty of newly minted status conscious consumers, wearing Prada, driving Mercedes’ and acquiring chichi little dogs they named either Chanel or Versace. Of course, nobody was more thrilled by the inexhaustible ‘wants’ of consumers than marketers were. Perhaps it was inevitable then that marketers teamed up with neuroscientists to conduct behavioral research on consumers while they were having their brains scanned. What fun. Not. While lying in a claustrophobic functional magnetic resonance imaging (FMRI) machine, consumers were shown prestige brand logos and were subjected to beautiful imagery and sensual scents. The scans followed the neural activity in the brain to determine how effective the marketing messages were. Predictably, status oriented stimuli, beautiful imagery and scents lit up an area of the mid-brain called the nucleus accumbens, an area involved in reward and pleasure circuitry. Yet even after years of research and tens of millions of dollars, marketers had not exactly found their holy grail - which is the brain’s “buy button” – but they had amassed a significant amount of data which now stands frozen in economic time: bubble brain scans.
Of course, 2005 seems like a lifetime ago and consumer behavior has changed dramatically over the last four years. But does the passage of time mean that FMRI’s should be fired-up again to revisit those same brains to determine how today’s economic environment affects the participants perception of status merchandise? Well, we probably don’t need brain scans to figure this out. We have historical precedent and we know that consumers adjust their behavior quickly in changing times. We also know that in reaction to material loss people will eventually compensate by turning objects of past desire into objects of disgust. (Hey Prada, hey Toll Brothers, you light up my brain’s insula).
In austere times people find reward in emotionally meaningful experiences rather than in consumptive behavior. Which (finally) brings me to my tie-in to real estate marketing. Sadly, the real estate lobby still continues marketing houses as “investments” even though the wealth concept message is perceived as disingenuous and it presents a painful reminder of financial loss to a significant number of consumers. Adverts peppered with the false promise of real estate riches are extremely counterproductive. (Short sale magic, REO tours and auction secrets). By sticking with an outdated message, the real estate lobby ignores what their customers ‘wants’ which are to feel good and to have experiences that are meaningful and relevant. Today, simple pleasures simply matter much more.
Realtors will probably have to wait a generation or two before being in the sweet spot of the economy again but they should not wait another minute for straight honest talk about the product they are selling.
Eventually consumer behavior will change. Trends often turn on a dime. Perhaps the ‘green shoots’ we are hearing about in the economy really are signaling an end to this deep recession. Eventually, we will see a spike in consumer confidence and our austerity will morph into prosperity. Then and only then will it be time to dust off the superlatives and pepper descriptive real estate listing adverts with bits of appropriately used French and the occasional and - hopefully – sparingly used word “investment.”
Regardless of the economic environment, there really isn’t any need to ‘hype’ homeownership as a great investment. A house is, after all, a highly illiquid under-performing asset class. But that really doesn’t matter. It is a home’s intrinsic value (the pleasure derived from the thing itself) that matters most. It is in our homes that we live, love, learn, raise our children, nurture our pets, entertain the people we care about and experience the triumphs and tragedies of life. Where we live and how we live help us to become who we are. There should never be a need to hype that.