If you want to get people to buy a new home from you, you
need to understand how people make purchasing decisions.
Quality built homes and builder reputation matter; that
goes without saying. What about when your home matches the customer’s needs and
wants, and they trust you, the builder? What are the things that influence the purchasing
decisions once those fundamentals are in place?
New home purchases usually start with a Google. Most people do
online research and compare different builders in their area. What happens
after can make or break your business.
Here are 9 things you should know about purchasing
decisions:
1. Peer reviews matter
Nearly 90 percent of new home buyers said they look for
online reviews prior to beginning their house hunting.
Start gathering reviews on your site. Ask your past
customers to give you one or two sentences that can be added to your website.
Ask their permission if you can use their names otherwise either use their
initials.
Don’t delete the negative reviews some may send you – they
actually help sales if there are only a few of them. If there’s tons of
negative reviews about your business on the Internet, most people are
naturally turned off and look elsewhere. That is one hard thing to
overcome.
2. People gather information from mixed sources
Even though social media and internet rule, customers make
purchase decisions using a combination of old media, new media, and
old-fashioned conversations with friends and family, especially when it comes
to building a new home.
According to a recent study, the most common methods of
gathering information prior to buying a home are:
- Looking you up on Google
- Face-to-face conversation with a salesperson or other company representative
- Face-to-face conversation with a person not associated with the company
59% of people consult friends and family for purchasing
decisions. They want reassured that they are not alone in making the decision. Asking
people around us for recommendations is still commonplace. This means the
experience you provided your past customers matters a great deal.
3. People don’t often know why they prefer something
There’s a famous study about jam tasting.
These scientists asked a big sample of consumers to rank
jams on taste, ordering them from top to bottom.
Then the scientists re-did the study with a different, but
still statistically representative, group except this time they asked the
sample to put the jams in order of taste and write down why. The result when
they did that was that the order literally flipped, so the ones that the first
group ranked as best tasting were judged to be the worst by the second group
and vice versa.
The reason was that they were asking the conscious brain to
suddenly get involved in something that it really doesn’t know, and suddenly
there are all these sort of social pressures, e.g. what they “should” choose,
leading the answers away from what the people actually liked.
People make instant decisions with their sub-conscious. When
they have to explain the choice, the choice might change all together since the
rational mind is then involved.
Takeaway: don’t trust people when they explain why they
bought something or didn’t. They might not know themselves.
This is one of the missing pieces in the modular home sales
process. When asked what they think of modular housing, the customer’s
immediate response is negative based on what their sub-conscious is telling
them. If you could see what is happening in there you would probably see double
wide trailers being blown off their foundations in a tornado.
Now ask them to describe their thoughts about modular and
you will find that what they don’t know could fill volumes.
4. Mass leads the way
Most of our preferences are learned and largely formed by
social norms and expectations that producers have a strong hand in shaping.
A Washington Post column uses the example of clam
chowder. It used to be thin decades ago, but is now almost uniformly super
thick. What happened? At some point, restaurateurs got in the habit of adding
flour to make chowder thicker and thicker, and now this is what consumers have
come to expect constitutes a bowl of “authentic” clam chowder. Now that has
become what the consumer prefers.
These learned preferences can just as easily involve
characteristics that, from an objective standpoint, do not make a product any
better and might even make them worse — particularly when it relates to
texture.
Ravi Dhar, a marketing professor at the Yale School of
Management, notes that although Heinz ketchup does not reliably win
in blind taste tests, it has established itself as the gold standard in its
category because it is thicker. In the marketing world, Dhar says,
“meaningless attributes often lead to meaningful differentiation.”
Ever wondered why so many products on the store shelves are
so similar? Wouldn’t it be better to make them different? Not necessarily.
There are huge incentives in consumer markets even for
competing companies to make everything the same.
Our preferences evolve as the society evolves. A
“family car” used to mean a station wagon in people’s minds. Then it was the
family van. Now it is an SUV.
In home buying where people have had a lot of experience of
living in homes, it pays to be like the market standard. Set yourself up as the
Gold Standard in your marketing area.
5. Cognitive fluency
Cognitive fluency is the human tendency to prefer
things that are familiar and easy to understand. For home builders this means
that the easier to understand what modular construction is, the more likely
people are to buy it.
Psychologists have determined, for example, that shares
in companies with easy-to-pronounce names do indeed significantly outperform
those with hard-to-pronounce names. Coincidence? Nope.
Suggestion: make your new home selections and pricing as
easy to understand as possible.
Previous positive experiences matter.
Cognitive fluency also explains why you stick with brand and
service providers you have used before, why you often order the same thing from
the menu – it’s easy. You’ve tried it, it worked, and you don’t want to spend a
bunch of time researching alternatives and risking a bad purchase.
As a modular home builder, this means it’s super important
to make a great first impression. Show your homes are packed with value. Price
only sells in mass produced consumer products, not new homes.
Once they have their first positive experience with you, it’s
much easier to move toward building their home.
6. Hard to read, hard to buy.
Make your website easy to read.
When people read something in a difficult-to-read
font, they transfer that sense of difficulty onto the topic they’re reading
about.
Norbert Schwarz, a leading fluency researcher, and his
former student Hyunjin Song have found that when people read about an exercise
regimen or a recipe in a less legible font, they tend to rate the exercise
regimen more difficult and the recipe more complicated than if they read about
them in a clearer font.
The same goes for buying new homes. Easy to read fonts on
your website will double the number of people willing to click on your contact
info and seek more information and maybe even an appointiment.
Bottom line: make everything as simple as possible.
7. Does social media have an impact on purchasing decisions?
Another recent study found that consumers are 67% more
likely to buy from the brands they follow on Twitter, and 51% more likely to
buy from a brand they follow on Facebook.
Social media does impact home buying decisions, but it’s a
slow relationship building process and just shouting “buy this” works on a very
small number of people especially if you have few ‘likes’ and most of them are
your friends and relatives.
The purpose of social media is to get the home buyer to visit your website. It is not to give opinions on social matters. Create a Facebook page strictly for your business.
8. Emotional decisions, rational justifications
Do people make decisions based on emotions or logic?
McCombs marketing professor Raj Raghunathan and
Ph.D. student Szu-Chi Huang point to their research study that shows
comparative features are important, but mostly as justification after a
buyer makes a decision based on emotional response.
Buyers seem compelled to justify their emotional choices
with non-emotional reasons.
Emotions rule in all areas.
The earlier you make the emotional connection with the new
home buyer the better, because once a potential new home buyer decides they
like, either site building or modular, the more difficult it is for them to
backpedal.
Rational thinking will only justify their emotional choice.
9. It’s the subconscious that drives buying decisions
For the last 50 or 60 years, market research as an industry
has relied on an understanding that people make decisions based on rational
conscious thought processes. What the science tells us now is turning that
fundamental belief on its head – most decision making happens at the
non-conscious level.
We have a tendency to focus on facts and numbers, but in
many cases it’s the subliminal that makes people decide one way or the other.
People are complex and we are just beginning to scratch the
surface of what they really want. Sometimes we make buying decisions
even when we aren’t paying attention to the products.
The more you can get a home buyer to move from their sub-conscious
to their conscious level, the better chance you have of helping them decide
that you and modular housing is the best way to go.
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