I hope each of you had a wonderful Christmas holiday and are looking forward to a prosperous new year. Our crew took a couple of weeks off from our normal writing schedule over the holidays, and we’re excited about kicking off a new season of insight and dialog in 2013.
As you may remember, I started the discussion on habits in December with the assumption that many of you would be doing some strategic planning around this time of year. If you need a refresher, you may want to reference the previous (Part 1, Part 2) discussions.
Common sense tells us that real change will not happen in our lives unless we learn how to dislodge bad habits and cultivate new ones. Using the process that I outlined in my last blog, have you identified one or two bad habits you’d like to address?
If not, I encourage you to go through the process of sketching out your own cues, routines, and rewards cycle for the habits you’ve identified. Then, start the trial and error of testing your hypothesis. If you haven’t personally gone through the “habit loop” process at least once, you may have trouble understanding the next part of our discussion.
If habits have a profound impact on our own personal lives, it only makes sense they’ll also have an impact on professional relationships. As a leader, understanding the influence that habits have on others can significantly increase your level of effectiveness.
For today’s discussion, we’ll consider two areas of professional relationships that are common to most real estate owners and managers:
1. The habits of those you manage and coach.
2. The habits of the clients your company serves.
Habits for Coaching
If you’re struggling to understand and manage your own habits, you can bet the people you coach are struggling, as well. Or worse, they are not struggling because they are completely blind to the influence of habit in their own lives. Many agents are dragged along by influences of which they are not aware.
In either case, your role as a coach can take on a new level of effectiveness with an understanding of how habits control behavior. While it is easy to identify poor outcomes, it is not easy to pinpoint the causes of poor outcomes.
Try looking at poor outcomes through the framework of the “habit loop.” What are the cues that
agents are reacting to during the day? Which of these cues lead to routines that produce poor results? What false rewards are agents typically pursuing that cause them to continually repeat the cycle of ineffectiveness?
Like you did for you own habits (part 2 of this discussion), try sketching out a couple of “habit loops” for the agents you coach and then discuss these issues during your next coaching session.
Habits for Clients
Studying the habits of consumers (ie. those that buy your services) is not something that most people have considered. However, I found this topic the most intriguing part of Charles Duhigg’s book. Much of what has been discovered in this realm has not been yet been applied to the real estate sales industry.
Here’s the basic premise of habit theory as it applies to customers: Since all human beings are controlled by their habits, understanding typical cues, routines, and rewards can help a company optimize the sales process. In the real estate industry, it would be particularly interesting to know who will be buying or selling a home in the near future.
In his book, Duhigg documents an extensive case study involving Target; the popular nationwide retailer. The case study illustrates how Target has become very good at predicting what products a person will buy. How? By figuring out what is going on in a unique customer’s personal life. For example, Target can often tell if a female customer is pregnant and how far along (ie. what trimester) she is in her pregnancy after she spends some time in the store.
They find out this information by studying habits. For example, women often change from using scented lotions to non-scented lotions in the second trimester of a pregnancy. A cue changes (scents become irritating) and that causes a routine change (buying a different product) that leads to a
reward (healthy skin) women don’t want to give up.
This piece of information, combined with several more data points, equip Target to guess (with a surprisingly high level of accuracy) when a woman is in the second trimester of a pregnancy. Once Target has this information, they can focus on specifically marketing to that person for the large number of purchases she’ll make in the months just before and after the baby arrives.
I’m summarizing a concept that took the author about half of the book to describe, so this concept may still seem cloudy at this point. If you want to learn more, here are a couple of articles from Forbes and the New York Times Magazine that describe this in more detail. By the way, Target is not the only company doing this. Many companies in various industries are starting to apply these principles of human behavior to optimize their sales efforts.
So, what application does this have for the real estate industry? I think many of the answers to this question are yet to be discovered. But I do know this: there will be big rewards for those who innovate in this arena. Also, I’ve had several meetings in the past couple years where real estate executives ask very similar questions. If you don’t figure this out, your competitors probably will.
Spend some time learning about habits—both your agents and your clients will benefit. In our final chapter of this series we’ll discuss the concept of a “keystone habit” and how these theories will help you improve recruiting. Stay tuned.
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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.
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