Recently in a skills class I came across a new salesperson, Tim, who was frustrated. He was not frustrated with getting leads (which was unusual) but rather was struggling with getting his leads to make decisions.
My response was “okay, give me the lowdown.” He explained that his client was looking for a house in the $250,000 to $275,000 price range and that although he had shown him many wonderful homes in that prices range, he just wanted to see more. You might be thinking that many clients these days are elusive and fearful of making a decision and you would be correct. But his problem was a little different. His problem was relativity.
You see we all make decisions by comparing one thing with another and we use these comparisons to inform our decisions. This is the way we are wired and we do this thought process with everything. I was recently in a cell phone store where I concentrated on the comparison of the minutes plans. Saturday night my husband, who is a wine snob, took two glasses and poured two different wines and compared them. A friend recently started dating a man that is the complete opposite of the last man she dated. When I pointed this out she laughed and indicated she looked for a man that had different traits than the last one.
So what does this have to do with Tim? When we are in the sales profession understanding this concept of relativity is important. Tim had been showing his client one great house after another. Who could decide? Perhaps Tim had inadvertently given his client too many similar houses to select between. Remember that a confused mind always says no. Would a person decide to get married if there was an endless stream of great dates? I would not have. I got married because he was the best I could do. That decision was primarily based off comparing him with my last relationship. Tim needs a decoy.
A decoy is something inferior that can be compared. In the scenario of houses the client should also see houses that need work or are in lesser locations. By providing a decoy in the mix decision-making for the client would be easier.
Let’s go a step further and talk about pricing. In the world of real estate that would be commission plans. Often salespeople will offer only one commission rate, say 6%, which offers the client no relativity. Consider developing several commission structures perhaps 5 ½ , 6, and 6 ½ with various offerings with each. More than likely the client will pick the middle rate. An additional example would be to select houses that are priced higher, and lower, with corresponding advantages/dis-advantages to consider along with the “house in the middle”.
This thought process is often used at places we shop. Sometimes stores will offer variations of the same product and they place the product they want us to buy in the middle. Remember all of the choices that are good, better, and best? Which one are you willing to bet has the highest volume of sales? I recently read a story about a company that was struggling selling a particular kitchen appliance. In response their marketing team suggested they offer another similar appliance except this new appliance would have twice the capacity and twice the price. Suddenly this appliance flew off the shelf…but not the new bigger version but the original version. What happened? By providing a decoy demand was created.
We talk in real estate about the “ping pong” effect. That’s when one house goes on the market in the same neighborhood as other homes on the market but the new listing is priced higher. That new listing serves as a decoy. It may get showings but people will typically go buy one of the surrounding houses.
What does this mean to you? Your clients could make decisions more easily if you set up comparisons for them. Think about….
• The demonstration and selection of your products and services
• Your pricing – should you create tiers of pricing and how you can benefit
• How your business would benefit from a decoy
• How to make comparisons, and decoys, an integral part of your business