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I recently started reading Robert B. Cialdini's "Influence: The Psychology of Persuasion" and was struck by an interesting study in the first chapter.Harvard social psychologist Ellen Langer conducted a study based on the seemingly built in human response to respond to a favor better when there's a good reason to fulfill the request.
In her study, someone would approach a line of people waiting to use the copier at the library and ask to make copies.
In the first group, the person would say: "Excuse me, I have five pages. May I use the Xerox machine because I'm in a rush?" An overwhelming large number of people responded favorably (94%) and allowed the person to skip ahead in line.
In the second group, the reason was dropped and the question was changed to: "Excuse me, I have five pages. May I use the Xerox machine?" In this situation, the positive response dropped significantly to only 60% of those in line letting the person skip ahead.And, just to test to how important the actual reason was, a third test was conducted, this time again with a reason, but... a useless reason. The reason was a restatement of the obvious: "Excuse me, I have five pages. May I use the Xerox machine because I need to make copies?"
Adding a reason, even though it's an obvious and unnecessary to state reason, brought the positive response back up, this time to 93%.
How can this study can help us real estate investors and marketers?
It can help in two very effective and useful ways.
First, when marketing to potentially motivated sellers, include a reason that you're interested in buying their particular property. Anything with a reason beats an unpersonalized, blank "We buy houses cash" letter.
What's a good reason for you wanting to buy their property? How about these quick examples:
Secondly, when making offers to a seller, make sure you have a good reason for your price. If your price seems arbitrary or is defended with a simple "That's my final offer", you're missing out on a simple, yet effective trigger that can cause your sellers to more easily accept your offer.
This is very similar to responding to a request for price from a buyer for consulting services with a calculation instead of a fast number. One copywriter I knows sits down in front of a prospective copywriting client, asks a few basic questions, then fiddles with his calculator and notepad for a few minutes and comes up with a number.
You can bet that the price isn't a simple $120,000 plus 5% of gross. It's more like $117,429 + 4.7% of gross.
Which price seems more "real" and which one seems contrived?
What are some good reasons for your price being what it is when making an offer to a seller?
Try these on for size:
How are you using a reason in your marketing?
Please tweet about this article (with a good reason for doing so!) and/or share your comments below on how you're using a good reason in your marketing.
What's a good reason for you wanting to buy their property? How about these quick examples:
- I'm looking for a single family property like yours in the ____ neighborhood.
- I'm purchasing properties just like yours in the area, and can only buy one more this month. I think your house might be a good fit.
- Nobody wants to go through foreclosure, and I may be able to stop the process by purchasing your property before the auction.
Secondly, when making offers to a seller, make sure you have a good reason for your price. If your price seems arbitrary or is defended with a simple "That's my final offer", you're missing out on a simple, yet effective trigger that can cause your sellers to more easily accept your offer.
This is very similar to responding to a request for price from a buyer for consulting services with a calculation instead of a fast number. One copywriter I knows sits down in front of a prospective copywriting client, asks a few basic questions, then fiddles with his calculator and notepad for a few minutes and comes up with a number.
You can bet that the price isn't a simple $120,000 plus 5% of gross. It's more like $117,429 + 4.7% of gross.
Which price seems more "real" and which one seems contrived?
What are some good reasons for your price being what it is when making an offer to a seller?
Try these on for size:
- Condition of the property and repairs that you'll have to make to bring it up to market value
- Recent comparable sales that influenced the price
- The speed at which you'll be able to (or have to) close
How are you using a reason in your marketing?
Please tweet about this article (with a good reason for doing so!) and/or share your comments below on how you're using a good reason in your marketing.
Interesting information. It makes me re-think how I might talk with a seller. It makes sense that anytime you can add "reason" or "value" to your opinion/comment/request/approach, you might be better received.
I especially like the calculation pause. Too many times we make quick round ups (or downs) and miss the opportunity to really demonstrate what the number might really mean to us. Thanks for the post!
I love the examples you gave. It's a great way to use the info you shared.
Thanks for sharing the great content!