6 Stages of Investing: The Psychology Behind Leads
Welcome back investor superstars – get ready for the next phase of my epic series, 6 Stages of Investing.
I’m super psyched to bring you even more ninja tips in today’s post. Last time we met, we covered the hot topic of direct mail. We talked about motivation and equity, where to find quality lists, and we even discovered together that returned mail is actually awesome mail if you know how to use it to your advantage.
And today, the ride that I promised you when we first started this series continues with everything and anything about leads – from processing them to converting them into deals by simply talking with sellers.
So let’s ride this bad boy together, shall we?
Controlling the Controlled Response
Let’s talk a little bit of psychology first and foremost, because as we all know, your success as a real estate investor is largely dependent upon you reading your buyers and sellers, getting inside their heads and understanding how you can help them and how to best communicate with them.
With that said, there are two types of responses to the things you say, suggest and ask your prospects:
- Automatic Response
- Controlled Response
Remember this – even if you’re a rookie investor – your prospects view you as an authority figure, the expert in your field. They look to you for advice, knowledge and guidance. In short, this means that the typical automatic response is “how high?” to an authority figure (that means you) who says “jump.” Automatic responders immediately agree with authority figures because they (we) seemingly know best.
Now let’s talk about controlled responders – in relation to our world of real estate investing – who use lots of motivating factors to make decisions. Say your prospect seller is focused solely on price. What do you do?
You reach into your handy tool belt and lay down the hammer. Your goal, in this situation, is to convert your seller from an automatic responder to a controlled responder, and you’ll do this by building rapport, asking and answering the right questions, knowing when to listen and when to talk.
The bottom line is this…
Our job as investors is to positively influence and gently guide our clients away from automatic responses and toward controlled thinking by the means of motivating factors. And a key motivating factor is commitment.
We can all relate to this one. When you commit to helping a friend or you complete a task at work, you feel compelled to follow through, right? Being true to your word is important to you, right?
The same principle applies to real estate investing. If you can get your prospects to make micro commitments (baby steps are key in this business), you up your chances of closing deals significantly.
Don’t Be a Two-Pump Chump
If your brain just went to the gutter for a hot second, you got my message loud and clear. I mean, you don’t want to be THAT guy, do you? Nobody wants a guy who finishes first, even in real estate.
Here’s the deal – no matter how long you’ve been in the game, real estate investing will always be a challenging business, which is part of the reason we love it. But new investors face the challenge of (sometimes) timeliness and adaptability.
What the heck am I talking about, you ask? New investors (and you know who you are) have a tendency to say too much too soon. They talk about price straight out of the gate, and they rush the deal.
On top of that, they don’t modify their pitch. Every person you come in contact with is different. So why the heck would you treat them all the same? Each prospect is going to have a different personality, different needs, different ways of learning and processing information. So, newbies, adapt your pitch to each person’s individual needs and watch how – more often than not – you come out on top. Ohhh! (Pun totally intended.)
Remember, the guy who finishes first, actually finished last.
Lose the Drill Sergeant Act
Nobody likes to be barked at and told what to do, especially your buyers and sellers. The world of real estate investing is not a “sir, yes sir” kind of world where you monopolize all decisions.
For the love of well… something, anything, consider your seller! Bring him or her into the decision-making process and listen with open ears and an open mind. Work together with your sellers, know your strategy, and when the time is right, extend your hand and ask for the deal. But you’ll only get there if you consider your seller and work as a team to fulfill their needs (not yours). It’s that simple.
Some Final Thoughts
These lessons always apply to the investment business, but the beauty of this lesson is that it applies to any type of business or business model. The techniques I shared toady are really all about building rapport, sales and conversions. They’re about empowering people to make decisions by giving them the information they need when they need it.
Remember, too, that I’m not talking (at all) about being manipulative. No matter who you’re dealing with, be genuine, honest and always keep the needs of your buyers and sellers in mind. Work with their best interests at heart, and you can’t go wrong.
Wow! We’re on a roll and the ride isn’t over yet! Not even close. Take some time to absorb what we talked about today, then run with it. And be sure to check back for the next part of this awesome series where I’ll uncover the six stages of that first call. It’s gonna be one killer post, so be sure to join me!
As always…keep moving forward, and stay classy, my friends.
Tags: Automatic Response, Commitment, Controlled Response, Rapport, Responder
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