Three phenomena will bring major changes to your customer base in the once stable, established neighborhoods that have surrounded you for years.

2. 3 Major Forces Will Cause Radical Change In 2011-12
. . . How will they affect you, What steps should you take?
The answers below may surprise you...
T hree phenomena will bring major changes to
your customer base in the once stable, established
your business can count on. These new customers
who have moved into your local market segment
neighborhoods that have surrounded you for years. most likely have a NEW, DIFFERENT profile than
the ones that moved away. This means different
wants, needs, concerns, and spending behaviors.
u A new wave of short sales and fore- This is what the reveals – and why you have a
closures combined with “I’d rather rent huge advantage over your competition.
anyway” mentality are continuing to cause
NOTE: The key to the 3L Score that makes it un-
housing prices to drop.
like any other analytical tool out there is that it is
site-specific to your business’ primary trade area.
Be VERY cautious when looking at information
averaged over a large city or county. It can be mis-
leading and paint a false picture of the real market
conditions in your business’ local primary trade area.
v Mobile Echo Boomers (18-32) and Gen-
X’ers (33-45) are seeking gainful employ-
ment and brighter geographies near and far.
What do housing price changes have to do with
YOUR business? You don’t sell homes, but your
customers live in them, and the chunk of money left
over after paying their household’s monthly cost is
what’s left over to spend on YOU!
That’s why the very first thing we give you is a
free 3L Score. If you haven’t already gotten a free
3L Score of your business’ address, click here.
Why You NOW Have An Unfair Today there are new areas of attractiveness for the
Advantage Over Your Competition mobile Echo Boomers and Generation X’ers
(Hint: they aren’t the suburbs of the major cities).
In previous decades, regardless of the price range of
a neighborhood, one could count on a household Employment opportunities and lifestyle attrac-
moving out to be replaced by a similar one (at least tion are driving these age cohorts to urban areas of
in terms of income). Not anymore! With home prices redevelopment and mid-size cities with great hous-
dropping up to 50% and a continuous flow of fore- ing affordability and all around lower cost of living
closures and short sales, this is no longer a trend attributes.

3. This movement to seek affordable housing and lower year, (before he found our website and the 3L
cost of living has also resulted in HUGE household Score), he spent big bucks on one of those conven-
contraction. Meaning, the same number of individu- tional demographics reports. The 2010 Q3 report
als are living in fewer dwelling units. These radical showed an increased population density in one of
changes in household makeup may be significantly his market segments. Naturally, Gary interpreted this
contributing to the changes in your business. as a clear sign that the housing market was finally
turning and new people were moving into the vacant
dwelling units surrounding his business. Great news
How Household Makeup for his furniture store, right?
Directly Affects Your Business
Wrong. Here’s THe realiTy:
Household makeup will vary from marketplace to
marketplace within each age group. Whether there Although there was an increase in population den-
is one person living in a household that is single or sity, the number of vacant dwelling units (houses,
there are seven persons comprised of a complete apartments, condos, etc.) did NOT decrease. For ex-
nuclear family, there will be significant variations in ample, Echo Boomers who moved into town weren’t
households among the three major age groups: Baby buying new homes or renting apartments, they were
Boomers, Generation X, and Echo Boomers. moving back into their Baby Boom parents’ homes.
Result: No need to go to Gary’s furniture store to
buy a new bedroom set when they’re moving into
their parents’ already-furnished guest room.
You may recognize this paradigm in your own resi-
dential neighborhood today. Get out and talk with
your neighbors and friends. They will give you great
insight to these changes. We reemphasize this trend
because it will continue to occur and become more
and more prevalent in the unfolding decade.
You can see where the stages of life (Echo Boomers,
Generation X, or Baby Boomers) become meaning-
ful, with respect to household makeup and buying
behavior.
It’s CRITICAL you know the household makeups in
your marketplace!
w Baby Boomers (45-65) are in
constrained spending patterns as
Are there one or more income/wage earners?
they save for retirement while
trying to assist children and
If so, what is the combined annual income of the grandchildren.
household?
In the past five decades, the dominant paradigm
Here’s a counter-intuitive story and perfect ex- was Baby Boomers growing up, moving out, and
ample of why it’s so important... then moving their family of Echo Boom children up
the home “stair ladder”. Under this paradigm many
Gary owns some furniture stores in Colorado. Last Baby Boomers ended up in “McMansion” suburbia.

4. Today, Baby Boomers have retirement in focus. AND REMEMBER...
They want to move down to a manageable empty-
nester space. They want to cash in equity. They Ignore national housing statistics when making stra-
want to save. Almost 90% of Baby Boomers who tegic and tactical decisions for your local operations.
choose to move stay within 50 miles of their current Specifically, ignore supply side indicators, such as
residence. The reason is to be closer to their grand- new home sales, resales, new starts, permits pulled,
children. Less than 15% move out of state to Sunbelt and price changes.
retirement communities.
Why Are These Statistics So Dangerous?
If your target market includes Baby Boomers you’re
probably wondering, They can be misleading and paint a false picture of
the real market conditions in your business’ local
“Will I lose them as customers?”
primary trade area.
Expect their buying behavior to change as they focus
A thermometer taking the temperature of a patient
on retirement. However, for many Baby Boomers
may reflect a fever, but it says nothing about whether
their dream has turned into a nightmare. They can’t
the fever is related to pneumonia, the flu, an infec-
sell the oversupplied/underdemanded McMansion
tion, etc. It also does not say if the fever is going to
and they aren’t “empty nesting.” The jobless re-
get better or worse and how long ot will last. That
covery has one or more of their unemployed Echo
requires a personal, site-specific diagnosis by a doc-
Boomer kids (and a grandchild or two) living with
tor – and that’s what the 3L Score is to your busi-
them. The size of their household has not shrunk, it’s
ness. Translated in a business sense, it specifically
INCREASED!
focuses in on the unique wants, needs, concerns,
and spending behaviors of your local, primary target
market.
What’s
Your Next Step?
Your immediate next step should be to measure the
household make up and average household income
by age group of your market. You must have an
understanding of the age groups who dominate the
areas surrounding your business. Once you under-
stand WHO now surrounds your business you will
be able to make better informed decisions about
your marketing efforts and product mix.
Maybe you need to close down a location based on
recent changes, or consolidate two locations, or pos-
sibly move to a new location that is loaded with the
type of customers your business serves.
TIP: The “Willingness To Spend” algorithm of
the 3L Score uses proprietary consumer purchase
weighting and will give you MAJOR insight into
the current consumer confidence of your market
segment.
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