Understanding The Psychology of Sales

Friday, 15 July 2011 07:43 Heather Wright

Despite what you may think, you are not in the sales business. You are in the relationship business.

Your job, and the successful execution of it, lies in the ability to understand people, establish and foster relationships with them and to extract their needs and wants- and to help them express that need in the context of the product that you offer.


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The actual sales are the by-product of this process and, to really succeed in client-centric, customer focused business like that of the Real Estate and Mortgage Professions, you must give a lot of thought to a rather volatile entity- the human being. While each client and situation is individual, there are some things that are common amongst most people. Therefore, part of your successful sales strategy should be trying to understand some of the psychology and motivation that most people have when approaching the purchase, sale or financing of a home. Furthermore, you need to know how they are approaching you as a professional.

All in all, it comes down to understanding where your client is coming from.
Set the Stage

In the relationship business, job one is creating an atmosphere in which people want to do business with you.

Like it or not, you are dealing with human nature. And despite efforts to keep an open mind, judgement will likely be passed on you shortly upon first meeting someone. Knowing that this judgement of you, rightly or wrongly will also likely set the stage for trust and for the building of a business relationship, it is worthwhile to look at yourself- and your business through the eyes of your clients.

Judgement sounds harsh, but if you can win your client over at this crucial stage, you have taken an important step towards creating both a meaningful relationship, and a viable atmosphere for business.

You will be judged outright on your appearance- both initially and over time- as to whether or not you consistently project a professional image. You will be judged on your knowledge of your market, product and other services; this can include things like experience or expertise in other areas like staging, property appraisals etc.etc. You will be judged on your people skills- where sincerity is the greatest currency you have, and on the perception of honesty (perception of honesty- because this comes down to optics. You could be the most honest person in the world, but if a client for some reason perceives that your honesty is somehow compromised, you can forget about building a long term relationship)

Understanding the Fundamental Needs of People

While people are indeed all very different, there is something that largely binds them all together.

All people like to feel important and that their needs matter and are understood. To know where your client is approaching you from can help you devise your approach to them.

Jay McInnes, Sales Agent, and Macdonald Realty, agrees: “Customers want to feel cared for and important and again, their comfort in the process is the most important aspect of the sale . Empathy is very important as everyone has to be on the same page if everyone is going to feel happy about what is going to happen- people typically don't buy or sell if they don't feel good about the deal.”

Adam Hawryluk, Mortgage Consultant, INVIS Mortgages, says that one of the best ways to project understanding, and to raise client comfort level is through good, old fashioned communication. “Communication is important in this industry, so understanding how your client wants to be communicated to and how often, is imperative. Some want a phone call every day with an update; others just want to know where to sign. Understanding that everyone approaches this, and life, differently, is very important for empathizing and making your client feel taken care of.”

Emotion vs. Logic

While the investment in a property is purely pragmatic, when you actually break it down, decisions surrounding it are often emotionally motivated, at least initially.

And as Hawryluk says, this is very much the case in the mortgage industry—and there is a role to play for mortgage agents in addressing this: “It's fair to say that people tend to approach decisions emotionally first, then realistically. I think this is exemplified by the amount of clients that real estate agents have that are looking at houses before they actually figure out how much they can afford; In a number of cases clients tend to "put the cart before the horse".

Not only is it good due diligence to have a full understanding of what your limits are before start looking- and possibly get attached to something- it is a good way of trying to balance out emotion and logic right out of the starting gate.

And as McInnes points out, just like the mentalities themselves, emotions aren’t cut and dried either- and you have to tailor that into your strategy as well. “Yes, people are influenced with emotion first, but there are different types of emotion that you can tap into. Physical or Mental, Physical emotion can be tapped into by making the home feel as modern / stark / cozy / new / old or flashy as you believe its specific target market is looking for.”

“Mental emotion would be targeted with price. Pricing the property well and selling at a price that the buyer would feel that they have purchased at a "good price" with monthly payments that they are not going to stretch to pay each month. So obviously all of these aspects put into the same property will open your seller up to the widest target market possible, to hit every level of emotion equally.”

You must be mindful of the motivations to purchase as well- and of their associated mindset when examining a purchase. Says McInnes, property investors bring an entirely different mental element to the process- pure pragmatism : ”Logic comes into play a lot more when it is a investor purchasing, as they are strictly looking at the rent-ability of the property and the numbers. It’s all a simple equation before making that quick yes or no answer. There is typically no emotion involved as it is just generating a yield for the purchaser.”

Again, success in this lies in knowing your client, their motivations and the context of their mindset. Whether a response is emotional or logical to the property in question, it is still up to you to create an atmosphere in which a client feels understood and comfortable.

Pressure or Persuasion?

Applying pressure by creating urgency is a good sales technique, but is it always the best way to go in client centric business? Make no mistake; your investment in a client is motivated by the desire to close a deal, so you should be asking for business. The real question is, how can you be most effective in generating business, while cultivating a relationship and creating an atmosphere at the same time?

Hawryluk says that, as always, you need to understand the client and act appropriately- and that persuasion is more relationship friendly- while pressure works best in a transactional, immediate situation : ”I see persuasion as a way of getting a client to your desired end result ("Option A or Option B, and just so you know.... Option A is dipped in chocolate"), while pressure I see to be used for a yes or no answer, an act or don’t situation.”

McInnes too, agrees that persuasion is a kinder tool, and plays better to a client’s psyche. Creating pressure and urgency in the short term may work well for you and your immediate bottom line, but it isn’t going to make your client comfortable- which again, is something that most people need. “I believe persuasion is painting a picture of what life would look like when living in this space and focusing on how it will specifically cater to something important to the buyer. Pressure is simply in my opinion harping on someone and telling them why they should purchase the home- a very different experience for the buyer involved; persuasion will assist in getting deal done, where pressure will most of the time blow a deal as it is a very negative situation to be in.”

It is worth pointing out too, that pressure lacks empathy- and empathy is an essential ingredient in building a relationship, and creating a favourable atmosphere.

You are not just buying, selling or financing properties. Although the process and the transactions are very much business, what you are actually providing is not. You are satisfying a basic human need for shelter. You are supplying families with a framework in which to build memories. You are building a bridge for someone to move from renter to the impressive title of home owner for the first time. For property investors, you are offering them opportunity for return on their investment. It’s not about bricks and mortar-It’s about throwing down roots. For property investors, it’s about feeding their pragmatic approach.

The old adage “walk a mile in someone else’s shoes” has a new depth of meaning in sales. It is much easier to fill a need, when you can understand the why behind it.