BLOODHOUNDBLOG.COM

There’s always something to howl about

The Theory Of Sales Relativity

When we upend things in physics these days, it’s not necessarily that the old things were wrong. It’s just that underlying it is a more complete theory. Quantum Web 2mechanics tells us that a ball is made up of atoms, but Newton’s laws still work just fine. You can predict the ball’s trajectory without knowing that the ball is made up of atoms.

- Lisa Randall

___

When I read the quote above by Lisa Randall I knew I had to use that quote to pay homage to this wonderful post by my friend Jeff Brown. What is the benefit of Web 2.0? Transparency. I also really liked the post by Barry and I especially liked the comment by Allen Butler in this thread.

The only problem I see here is simply this: many consumers simply don’t know, or don’t care to know. The whole thing about being “transparent” is great ad copy. However, while we are waiting around for the internet to change our lives, your average Joe is simply looking for one more way to have to actually do less research and less work. The conveniences of modern shopping have led to very lazy consumers. Maybe a Redfin customer would have the gumption to search out the facts & such. Most will not. Real estate consumers fall into two distinct categories: buyers and sellers. The buyers will end up with an agent through sheer happenstance because they don’t know and don’t care.

The sellers will go with whomever is “recommended” to them by a family member of friend. It is usually not until they have expired a few times that they actually start to pay attention.

In a market like ours, the listing agents who get the job done will remain in the game. Those who don’t. . .well, most are already gone.

Gonna go out on a limb here (flame retardant suit loosely fitted to allow breathing room) and say that all this talk of disintermediation and having to prove your value in this new “web 2. . . .world” will not pan out. The consumer is too lazy.

Then again, I’m wrong occasionally.

I don’t think Allen is wrong. I don’t think that what web 2.0 offers is even a little bit new, either. At least not in the “what do customers want” department. What exactly do web 2.0 clients want? What is this unique commodity that they strive to get? Transparency. Isn’t that just a different way of saying, “I can see you aren’t lying to me”? I think it is just that. Customers don’t want to be lied to – not even a little bit.

Yes, you do have to actually have something they want (or need). They have to already want (need it) it or you have to be able to create a want. But as long as they have a choice, they will always prefer to deal with someone they believe will tell them the truth. I noticed many years ago that people who came here from some other country (who could not speak English) who I wound up having as customers had to have a translator. In many instances the person who wound up being the translator was their young son or daughter. Years ago, I had “translators” aged 10 and 11 years old explain the basics in a purchase contract to their mother and father while I listened. I could watch the parent’s faces as the various concepts were being talked about back and forth (in a language I did not speak or understand). From this there were two things I found most interesting: 1. It was actually possible to do this, so long as I understood what it was I was talking about to the 10 year old, and 2, the entire back and forth completely changed once they could tell I wasn’t lying to them. In fact, the main skill they seemed to have developed and relied on the most was determining, is this person lying or is this person telling me the truth. They weren’t nearly as interested in the nuts and bolts of the purchase agreement as they were in figuring out was I telling them the truth.

Over the years I observed that it wasn’t just foreign language cases who behaved in this manner but most customers. They weren’t really that interested in “learning all about it” but were very interested in knowing if I “knew all about it”. And if I would point out the “bad” things right along with the “good” things for them. From observation of this – that once they saw I was honest – it was like a switch had been thrown, from off to on – they would then move ahead rapidly, with no real objections, I was able to exactly identify and change what it was I was attempting to accomplish.

I saw back then that what I was really “selling” was my credibility. Just that one thing. That lesson stayed with me. I have learned since then that the business I am actually in is the lead generation business. In the business of getting and getting rid of listings there are just three parts. Leads, Listings & Leverage. This, of course, is straight out of The Residential Sales Bible. The main hat I wear in my organization is lead generation. In any organization, lead generation, done well enough and in enough volume will pretty much “solve” many of the other problems. One possible problem it does not solve is credibility. It is always vital that one is believable and that the customer feel like they got a “good deal” by using one’s services. This does not even imply that one have the lowest prices, etc., but simply that the customer’s overall experience – in their opinion, was a good one and it was “worth it”. For example, I don’t know of any amusement park on earth that charges more than Disneyland – to my knowledge they are the highest priced amusement park experience on the planet. Yet on any given day, over two thirds of all of the visitors to Disneyland are repeat customers. They come back again and again.  In their estimation they got a “good deal”.

What I don’t want is my customer wondering what kind of Mickey Mouse operation I’m running.

Mickey with logo

Related posts:
  • Compounding, Return On Investment, & What Matters To Investors — Invest $1 Get $2 Back
  • Am I being Paranoid about what the NAR is calling the “Recovery?”
  • Real Estate Marketing Channel Dominance Theory – my truth.

  • 10 comments

    10 Comments so far

    1. Wayne Long March 31st, 2008 3:59 am

      I am reading a book now – “The Speed of Trust”. The main premise is that things get done faster and better when the relationship of trust has been established.

      You are dead on. The client wants to know they can trust you. Once that trust is established – they are willing to put themselves in your hands. :)

    2. Mike Farmer March 31st, 2008 5:10 am

      I agree with everything you said except that I think consumers will want the lowest price along with honesty.

      I think people will pay a little more for good service, but there is a point people start trading off quality for price. And vice versa — People’s Airline discovered people don’t care JUST about price, that customers will leave in droves if the quality isn’t there, but on the other hand, if the price is too high people will forego excellent service for good-enough service.

      I think it’s a combination of balancing service with price in a business like real estate where people don’t make the connection between an experience like Disney and buying or selling a house. Sure, they want good service, but I’m not sure they make the fine distinction between quality-offerings when they are difficult to discern upfront. If agent A is charging 7% and agent B is charging 4%, I think the price makes a difference when the consumer can’t detect THAT much difference between the services rendered.

      What it does is create a situation where agent B has to perform competently and pay the bills at 4%. Agent A might create a lot of word-of-mouth business through EXCELLENT service, but will that be enough to overcome the difference in price, especially when there is public displeasure with “high prices” for real estate service? Or will agent A have to find ways to lower the price to be competitive? I think a balance has to be found.

      It compounds the problem if the trend is for agents to offer lower prices for service — Agent A might find it difficult to justify a higher price on excellent service alone.

    3. Todd March 31st, 2008 6:13 am

      That “no hassle” image violates a list of copyright, Terms of Use, and attributions requests too long to even cite. We have got to get into the habit of proper image attributions in blog posts, otherwise the general perception of blogs not being a legitimate form of publishing will continue.

      Use Flickr advance search to find images released under one of several Creative Commons variants to enrich your blog posts. You ask your customers to sign “exclusive Right to Represent” agreements don’t you? Why?

      Reference: http://en.wikipedia.org/wiki/Creative_Commons_licenses

    4. Allen Butler March 31st, 2008 9:22 am

      Todd,
      I’m not Russell ( I think he’s still sleeping at this point.), but I will step up here. A little research goes a long way. As far as I know, Russell has owned the copyright to the image and slogan since at least the late seventies. Might wanna check that sniping.

      Allen

    5. Greg Swann March 31st, 2008 10:39 am

      I’m pretty sure Todd is talking about Mickey Mouse.

    6. Sean Purcell March 31st, 2008 10:41 am

      Russell,

      I have tried over numerous posts to say what you said in only a couple of paragraphs. Trust and leads, developed by the super agent. This post will answer 90% of the questions a new agent might have on how to find success. Well said.

    7. Todd March 31st, 2008 10:45 am

      Mr. Butler if Russell owns the copyright to Mickey Mouse then he would not need to practice realty, he would be a billionaire several times over.

      Sarcasm aside, obviously I was referring to using images like Mickey Mouse without so much as an acknowledgment of Disney’s ownership ( with or without permission ). It’s this disregard for ownership that makes people not consider blogs as a real publishing medium.

      So I would politely suggest to all the “research” in this article pertaining to this post’s use of the Mickey Mouse image:

      http://www.digitaljournal.com/news/?articleID=4031

    8. Allen Butler March 31st, 2008 11:25 am

      Well, Todd actually said, “That “no hassle” image violates a list of copyright, Terms of Use, and attributions requests too long to even cite.”
      I didn’t see any mention of the Mickey Mouse image. I guess he was lumping them together.

      Guess I need to read between the lines.

    9. Louis Cammarosano March 31st, 2008 7:03 pm

      Russell

      I think you hit upon a universal truth whether we are in web 1.0 web 2.0 or the real world.

      Customers want a good deal and they want to know that you have their best interests at heart.

      There are some people that may be against amusement parks in general as a waste of money.

      Disney doesn’t care about those people. They focus on those that want to get a great deal and they take great pains to ensure they deliver.

      What many in the 2.0 crowd don’t understand about HomeGain because they are too focused on being against the model is that we have thousands of satisfied customers. We have customers who choose spend their money with us-not because they are locked into any type of long term contract- but because our marketing solution generate an ROI for them.

      There is a reason Russell sells hundreds of homes a year – he delivers and is perceived as “knowing all about it”.

      Similarly, there is a reason HomeGain has been profitable five years and running, even in this market -we listen to our customers.

      Not a week goes by during which we don’t receive unsolicited written thanks or praise for the value that we provide to our customers.

      In their estimation, as Russell says, they are getting a good deal and they don’t care what the re.net crowd may have to say about them or HomeGain.

    10. [...] The Theory Of Sales Relativity, by Russell Shaw. [...]