Each year a group of friends and I go to the mountains to do what we call “create”. The trip will have an assigned theme like…learning to paint. Although we do participate in the themed activities, we also spend considerable time drinking wine and reconnecting with one another.
These friends have something big in common; they are all real estate agents. The result of this shared profession is I hear a lot about the struggles they have in the business. A recurring conversation this year was the issue of client behavior. According to these agents their clients, both buyer and sellers, regularly display bad behavior by showing total disregard for other people, are very distrustful of everyone (particularly to the person they should trust), waste huge amounts of other people’s time, and want to squeeze every cent from the transaction. My friends believe this is a product of the recession. And the experts agree.
Pre-recession the consumer possessed a very different attitude. The consideration of a purchase was typically motivated by gain….what am I going to receive as a result of this purchase. With the purchase of a house, for example, a consumer would receive shelter, safety, security, self-esteem, and investment. These are motivations that propelled a person to purchase a house.
The recession has changed the psyche of the consumer. Instead of thinking about the gain they have switched to what psychologists call “protection motivation”. This means the consumer is considering the risks of the purchase and how to avoid these risks.
And why wouldn’t they be concerned about the risks…..have you seen the news lately? Everyone is fearful about their financial futures. Rarely a day goes by without hearing the continued grim news about homes. There is frequent conjecture about rather or not the housing market is at the bottom. That conversation hardly instills confidence in a potential home buyer!
The home buyer’s response to these negative opinions is to collect massive amounts of information so they can assess their risks. The information comes from some reliable sources and some not so reliable sources and is often not true. They then make decisions and complete subsequent actions based on this part-true/part-not true information. When we attempt to make corrections, they become distrustful of us because they understand that we get paid if they buy. The result is fewer consumers looking to their salesperson as a trusted advisor, which means fewer good buying decisions. And let’s not forget about the frustrated salespeople.
Until this passes, what should a salesperson do? Behavior modification experts tell us to change our words from promotion – “Now is a great time to buy a house” to protection words “If you don’t buy now this house at this price will likely never be available again”. When the consumer has a mindset of reducing risk nothing a salesperson says will change it, so the only action is to make the risk of not purchasing worse.
Although my friends and I discussed protection motivation on our trip, we also discussed one alternative…..creating such a good flow of new prospects that you can toss the ones that can’t make a decision!
Think about it……