Revolutionizing Home Sales with Cognitive Bias-Informed Strategies

Think ahead to the year 2050. It’s difficult to imagine what the new home sales process and buying experience will look like. What types of technology will be available? How will our industry innovate? While it is impossible to predict the future, we can begin to quantify the changes by looking at how much things have changed over the past 25 years.

Do you remember what was popular in 1998? Google just released its beta search engine. Blackberry released their 950, a groundbreaking interactive pager. And Britney Spears was at the top of the charts with her hit “Baby, One More Time.” So, yes, a lot has changed!

New home sales processes have evolved as well. We cannot use the same sales strategies we used 25 years ago. We can’t even use the same strategies we used ten years ago. We must adapt to change. In this market, sales consultants need to be aware of customer needs and their emotional processes throughout the buyer’s journey.

So, what has changed? A lot. Why has it changed? An increased flow of information.

In the past, the seller had more information than the buyer. Have you heard the saying “Buyer beware?” It originated because the buyer did not have most of the data. Sellers always had the upper hand.

In the past, when a buyer walked into a model home, they didn’t have any information. Not the prices, the floor plan, or the availability. Odds are, they were driving around, saw a sign, and decided to stop and check out a house. There, they would speak to a sales associate. These sales associates were the “gatekeepers” of information and often exchanged it for personal information about the buyer.

Then the internet came along. Now, 100% of buyers begin shopping for homes online. They have most likely visited websites like Zillow, Realtor.com, and others and walk into your sales office with a plethora of information they don't have the expertise to sift through. This includes specifics on your offering, the competition's offering, and resale data. This power shift has changed the new home sales profession in that we are no longer gatekeepers of information but rather curators of information. New home sales professionals are now in an era where the seller must "beware."

Let's innovate the customer buying experience.

In an industry as dynamic and competitive as ours, staying ahead of the curve and delivering exceptional customer experiences is not just a choice; it's a necessity. Whether you're a seasoned veteran or just starting, embracing innovation in the customer experience is crucial for success. Let's delve into why this is so important.

1. Innovating the customer experience fosters customer loyalty and referrals. Happy customers are not just one-time buyers; they become your advocates. 
2. Innovating the customer experience allows you to anticipate and address your client's evolving needs. The real estate landscape is continually changing, influenced by technology, market trends, and economic shifts. By embracing innovation, you can adapt to these changes swiftly and proactively.
3. Enhancing the customer experience can lead to higher conversion rates. When clients have a positive experience, they are more likely to commit. 
4. Innovation in the customer experience isn't just about making the sale; it's about building lasting relationships. Keeping in touch with past clients, providing valuable post-purchase support, and creating a sense of community around your properties can foster trust and repeat business.

We all have the unique opportunity to influence our clients’ lives in extraordinary ways. The homes we help them find are not just bricks and mortar; they are the foundations of their dreams, the places where memories are made, and the spaces where they'll raise their families. By innovating and personalizing the customer experience, we can make this journey not just about closing deals but creating positive, life-changing moments for our clients.

Understanding Cognitive Biases

As we understand the shift from new home salespeople being gatekeepers of information to curators of information, let’s consider what the curation process looks like. A museum curator organizes things in a way that makes sense to their visitors by authenticating information and coordinating collaboration opportunities. So, even though buyers have a plethora of information, they still need your expertise and help to work through their cognitive biases.

According to the Intelligent Speculation, a cognitive bias is a systematic pattern of deviation from the norm or rationality in judgment. These biases can affect our decision-making processes, influencing how we perceive information, make judgments, and form conclusions. Cognitive biases can emerge from various sources, including the brain's attempt to simplify complex information, emotional factors, social influences, and heuristics (mental shortcuts). 

Examples:

1. Anchoring Bias. Most times, we believe the first piece of information that we receive. This first piece is our anchor or starting point. When we receive new information, we reference off of this starting point. For example, when you’re negotiating, it makes sense to start off by offering a small incentive. You’re mentally anchoring the customer at that offering, so as your incentives rise, they will judge the gain by referencing the starting point. This allows a new home sales agent to preserve their builder’s margin while delivering an exceptional customer experience that leaves the buyer feeling confident about the deal they secured.
2. The Sunk Cost Fallacy. When we have invested time, money, and effort into something, we tend to stick with it, whether or not it outweighs the benefits. For example, let’s say you sit down to watch a movie, and 15 minutes in, you discover it is terrible. However, you continue to watch it, hoping it gets better because you have already invested in the sunk cost of popping the popcorn, settling in, and investing your time. This is the same as a buyer spending an hour with a competitor but only 15 minutes with your sales team. They will probably lean towards your competitors because they spent more time and effort with them.

Of course, there are several other cognitive biases. It does help to meet with members of your team and work through some of these so you all can be prepared for the different sellers you will encounter.

The Emotional Journey of Buying a Home

There are highs and lows throughout the home-buying process. Understanding these can help you innovate during those peaks.

For example, the sense of smell is closely linked to memory. You can light a candle with a unique scent during a high point, like signing a contract. Then, when your buyer is at a low point, like when pulling permits is required, you can light that same candle to help boost their mood. They will subconsciously think of when they are excited about the process, which will help them bounce back. 

The process is a long, emotional journey, so sales teams need to evolve their processes. While the future of new home sales may be unpredictable, teams can do things to prepare. If you're unsure where to start, our team is happy to help. Set up a call to discuss next-level sales training for builders today.