Target Consumer Profiles: Updates to 2023

Imagine having a magic lens that lets you see exactly who wants your product and why – that's what a target market consumer profile does for businesses. 

A target consumer profile (TCP) is a detailed description of a specific segment of consumers within a broader market that a business aims to reach with its products or services. This profile encompasses characteristics and attributes of potential customers, helping businesses understand their ideal customer profile. 

Why is a TCP crucial? It enables businesses to focus their marketing efforts, product development, and communication strategies on a specific group of consumers most likely to purchase their products or services. 

Every year, New Home Star releases an updated TCP report, analyzing 12 distinct customer profiles to deepen our understanding of our customer base. This article highlights key takeaways from the 2023 TCPs and explores emerging trends to watch in the coming year and beyond.

Our Target Market Consumer Profile Methodology

The data for the TCPs comes from New Home Star customers. We gather it from surveys sent to our home buyers directly after their home purchase. This way, the home-buying process is fresh in their minds, and they can share accurate and timely feedback.

The 12 TCP profiles we survey fall into the following categories:

1. Stable but stagnant future families
2. Stable but stagnant single retirees
3. Limited capacity young and fun buyers
4. Upwardly mobile early empty nesters
5. Upwardly mobile multigenerational families
6. Stable but stagnant young families
7. Upwardly mobile young and fun buyers
8. Stable but stagnant young and fun buyers
9. Upwardly mobile future families
10. Upwardly mobile mature families
11. Stable but stagnant traditional retirees
12. Upwardly mobile young families 

In our surveys, we look at the wants versus the needs of our home buyers, understanding the reasoning behind each purchase and factors which impact their decision-making process. Did they relocate for a job, move closer to a city, or move closer to family? Is access to social amenities important, or is access to open parks more of a factor? We take into account budget preferences — like whether the final price matters more than the monthly payment — and what they’d sacrifice to get a feature of the home they wanted. Product preferences are assessed with home buyers commenting on preferences regarding the number of bedrooms, formal living room, high-end finishes, and more.

For survey questions, we use a 9-point system, enabling more sensitivity in the data. 5 is the neutral point, and anything above 7 is considered very important (must-have). 

Here’s an example of a target customer profile data slide for upward mobile families and their budget preferences:

While the survey is robust, responses have increased year over year, indicating buyers are eager to share feedback and engage in our research process (which we greatly appreciate!).

The Common Theme: A Rising Housing Affordability Problem

We see affordability is a constant across the 12 TCP profiles. While it might look different for each group, it’s the main focus, regardless of age or lifestyle. 

In these surveys, affordability can mean purchase price, or it could mean “I want to be in an area where I can get all of the things I want.” 

There are many reasons it makes sense why affordability ranks important across all profiles. Here are a few:

1. Rising home prices: Home prices have been increasing significantly in many regions, making it harder for first-time buyers to enter the market. High property prices mean that affordability becomes a primary concern as potential buyers need to secure larger mortgages and make higher down payments.
2. Stagnant wage growth: In many areas, wage growth has not kept pace with the increase in home prices. This disparity makes it challenging for new home buyers to save enough for a down payment and afford monthly mortgage payments, emphasizing the need for affordable housing options.
3. High levels of student debt: Many new home buyers, particularly millennials and Gen Z, are burdened with significant student loan debt. This financial obligation reduces their capacity to save for a home and manage additional monthly expenses.
4. Increased cost of living: It’s no secret that the overall cost of living, including expenses such as healthcare, education, and everyday necessities, has risen. These additional financial pressures make it essential for new home buyers to find affordable housing to maintain a balanced budget and financial stability.

Given these factors, it's clear that affordability remains a universal priority for all home buyers, regardless of their specific circumstances or preferences. 

An Example of a Target Consumer Profile: Upwardly Mobile Young Families

Here, we’ll focus on findings from an example of a TCP — upwardly mobile young families. This is our largest TCP. Some of the biggest takeaways from the survey responses of this group include:

1. This group wants to stop throwing away money on rent. They view renting as a temporary solution and are eager to invest in homeownership to build equity and achieve long-term financial stability.
2. Monthly payment matters more than purchase price, and this is increasing. This trend is growing as they prioritize manageable monthly expenses that fit within their budget, ensuring they can comfortably handle other financial responsibilities and lifestyle choices.
3. They are motivated by the prospect of buying a new home, though this is a want and not necessarily a need. This distinction indicates that while homeownership is a significant goal, it doesn’t outweigh all other financial or lifestyle considerations.
4. Property tax and desire to be in an “up and coming area” saw the biggest decrease. Other factors, such as affordability and monthly expenses, have taken precedence over the potential long-term investment benefits of rapidly developing neighborhoods.
5. Location of the community and type of community lost importance in 2023, shifting from a need to a want. Upwardly mobile young families are becoming more flexible about where they live, focusing less on specific community attributes and more on finding affordable homes that meet their immediate financial and personal needs.

This is just a sample summary from one group — each TCP offers unique distinctions for buyers of different ages, regions, and life stages. 

Strategic Considerations For Builders

It's crucial for builders to recognize the evolving preferences and priorities of today's homebuyers. 

For example, affordability remains a central concern across all demographics, with upwardly mobile young families eager to transition from renting to homeownership. Additionally, lot size holds significance for growing families seeking space and flexibility. By leveraging insights from the latest TCPs and tailoring their approach to meet the specific desires of each customer group, builders can effectively market new homes and convey the advantages of homeownership over renting or buying existing properties.

We created this ebook to help builders see the benefits of buying new. Check it out!

Leveraging Target Consumer Profile Methodology for a Data-driven Approach 

Beyond the TCP we went into detail on above, upwardly mobile young families, we have 11 more that we dive deep on to uncover details about each group and how to best sell to them.

We monitor changes, wants, and needs regularly so adjustments can be made to sales and messaging strategies. Our home builder consulting services provide a data-driven approach to achieve scalable results. 

Contact our team today — we would love to help!