INSIDER: Influence: The Psychology of Persuasion

Parker Cannon, MBA Candidate

Real estate agents have a tough job. They must be persuasive in order to help potential buyers or sellers take the plunge and make a big investment, while also navigating complex transactions and regulations. In order to be successful, agents need to be skilled communicators and master persuaders. In Influence: The Psychology of Persuasion, Robert Cialdini leverages insights from his 35 years of evidence-based, scientific research to explain the science behind persuasion, delving into what makes people say “yes” to a request or proposal. Cialdini explores the different factors that affect how people make decisions and how to leverage that knowledge in order to become a more persuasive communicator.

In this article, we'll explore the six key principles of influence as they apply to real estate. Cialdini also provides specific examples and strategies that agents can use to apply these principles in their daily work.

THINK POINT #1: Reciprocation

The first lever of influence, and arguably the most potent, is reciprocation. The principle of reciprocation suggests that people are more likely to comply with a request if they feel that they owe something to the recipient. In the context of real estate, this could mean offering something of value to potential clients in exchange for their business. For example, a real estate agent could offer a free home valuation or a consultation on staging a property. By providing something of value up front, the agent is more likely to establish trust and build a relationship with the client.

Another way to apply the principle of reciprocation is by providing excellent customer service throughout the buying or selling process. By going above and beyond to help clients navigate the complex real estate landscape, agents can create a sense of indebtedness that can lead to referrals and repeat business.

THINK POINT #2: Social Proof

The principle of social proof suggests that people are more likely to do something if they see others doing it. In the context of real estate, this could mean showcasing positive reviews and testimonials from previous clients on the agent's website or social media pages. Agents could also display social proof indicators, such as the number of homes sold or the number of years of experience in the industry, which can help establish credibility and trust with potential clients.

Social proof can also be leveraged by building relationships with influencers in the community, such as local business owners or community leaders. By getting these influencers to endorse the agent or refer clients, agents can tap into the power of social proof and expand their network of potential clients.

THINK POINT #3: Commitment and Consistency

The principle of commitment and consistency suggests that individuals are more likely to follow through on commitments if the commitments are made publicly and if the commitments are consistent with the individuals’ beliefs and values. In the context of real estate, this may mean encouraging potential clients to make small commitments, such as agreeing to a home analysis or signing up for a newsletter. These commitments can help build momentum and establish trust, which can ultimately lead to bigger commitments such as signing a listing agreement or making an offer on a property.

Another application of the principle of commitment and consistency is using the power of social media to document the buying or selling process. By sharing updates and milestones on social media, agents can create a public record of the client's commitment to the process, which can help reinforce the client’s decision.

THINK POINT #4: Liking

The principle of liking suggests that people are more likely to do business with people they like. In the context of real estate, this means building rapport with potential clients by demonstrating genuine interest and care for their needs and preferences by engaging in active listening, asking thoughtful questions, and showing empathy for each client’s situation. Agents can also find common ground with clients by discussing shared interests or experiences.

Another way to leverage the principle of liking is by using visual cues to create a positive first impression by dressing professionally, using high-quality marketing materials, or ensuring that properties are staged in an attractive and welcoming manner.

THINK POINT #5: Authority

The principle of authority suggests that people are more likely to follow the advice of someone who is seen as an expert or authority in the field. In real estate, this means establishing credibility and expertise in the industry through certifications, awards, or years of experience. Agents can also showcase knowledge and expertise by providing valuable insights and advice on the buying or selling process through blog posts, social media updates, or one-on-one consultations with potential clients.

Furthermore, agents can leverage the principle of authority by partnering with other experts in related fields, such as mortgage brokers, home inspectors, or contractors. By aligning with other experts, agents can position themselves as trusted advisors and provide clients with a more comprehensive and valuable service.

THINK POINT #6: Scarcity

The principle of scarcity suggests that people are more likely to value and desire something if it is rare or in limited supply. Agents can create a sense of urgency or scarcity around a property by emphasizing the unique features or location of a property or highlighting the fact that there are only a limited number of similar properties on the market. Agents can also use the principle of scarcity to their advantage by creating exclusive or limited-time offers for potential clients. For example, an agent could offer a free home warranty or a discounted commission rate for clients who sign a listing agreement within a certain timeframe.

Conclusion

The six key principles of influence outlined in Cialdini's book, Influence: The Psychology of Persuasion, provide valuable insights and strategies for real estate agents looking to influence and persuade potential clients. By leveraging these six principles, agents can establish trust and credibility, build relationships with clients, and ultimately close more deals. Whether it's offering something of value, showcasing social proof, building rapport, demonstrating expertise, creating a sense of scarcity, or getting clients to commit to small actions, agents who understand the principles of influence are better equipped to succeed in the competitive and dynamic world of real estate.

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Recommended Reading

Cialdini, Robert B. (2021), Influence: The Psychology of Persuasion, Harper Business: New York, New York.

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About the Author

Parker Cannon, MBA Candidate
Baylor University
Parker Cannon is a graduate student from Waco, Texas. He earned his Bachelor of Science in Chemical Engineering from Louisiana State University. Prior to beginning graduate school at Baylor, Parker worked for three years as a chemical sales representative and operations consultant at a Chevron refinery. Parker is currently seeking an MBA degree with a concentration in finance to pursue a career in financial services.