BUYER BEHAVIOR

July 15th, 2009
BUYER BEHAVIOR

Forrest Harstad of Better Living Homes spoke at the Maple Grove Critical
Thinking Club last week and made this comment: "Its easy to talk someone OUT
of buying something. But you really can't talk someone INTO buying something
they don't really want."

I thought about this later as I plucked down $250 to buy 3 new golf clubs I
had no idea I needed or wanted. How did I come to buy these clubs?

#1) Judy, the golf course owner, understands her customers. Judy had put
aside her only Lady Lefty Demo Ping Iron for me. So Judy knows I'm a lefty
(and, as far as I know, the only lady lefty on the course, as lady lefties
make up less than 2% of golfers).

#2) Judy minimized my risk. She offered to sell me the club for $10-she said
it was an amazing price for a Ping. I wasn't convinced-I didn't know a Ping
from a Pong. I gave up reading golf magazines years ago because I got tired
of holding them up to the mirror-as the pictures are all backwards for a
left handed player. So Judy handed me a bucket of balls and said to try out
the club on the range. After 5 beautiful hits in a row-I bought the club.

#3) It was an excellent product. After 2 weeks of wanting more opportunities
to use my new 6 Iron, I went back and custom ordered 3 more Ping irons, thus
the $250 on something I had know I idea I needed 2 weeks before.

Which do you think is a more "complex sale": The 3 golf clubs or one $15
restaurant meal?

Are you making your determination on price? Price alone, doesn't make a sale
complex. Product sometimes does. But the biggest determination of a complex
sale is the Buyer and their situation.

Back to the $15 dinner. Recall in my New Year's column I wrote about the
opera, Thais. Thais was a high class call girl played by soprano Renee
Flemming who was persuaded to give up the fast life and become a nun by
baritone Thomas Hampson, who played the "Hunky Monk". When I heard the Hunky
Monk was giving a recital in Winona I bought 3 front row seats and called my
friends Rae and Kay, who had seen Thais with me at the movie theater.

Rae suggested we stop in Wabasha for dinner and found two restaurants that I
could get a vegetarian meal: fine dining or Chinese. I knew Rae's choice was
the fine dining place. But as soon as I glanced at the menu, which was
dominated by fish and seafood, I ran out of the restaurant. My fish and
seafood allergy is so sensitive that I can't even smell fish and seafood
without getting a severe reaction.

So, even though Rae wanted to eat in that restaurant, she put her WANT over
my health. Plus, if I had landed up in the Wabasha Emergency Room we would
have missed the Hunky Monk-the whole point of the trip.

Academic research on Buyer Behavior indicates that most humans are hard
wired to be risk adverse. Buying those Ping clubs reduced risk-it helps
lower my score so I can beat Rae and Kay. Settling for her second restaurant
choice minimized Rae's risk that she would miss the Hunky Monk. But what
about real estate?

Having been in the thick of the crazy pre-2006 market I would assert that
buyer behavior in that market was Risk Adverse. I worked with developers and
builders who were so concerned that if they didn't buy land they would miss
out on the boom. They perceived it was a higher risk to NOT buy land. Banks,
some with little real estate experience, also felt they would miss out to
not jump into land development.

So, if your balance sheet is unbalanced, and you're feeling really crappy
right now, take some solace in acknowledging you were just being human.