The “Sheeple” Close
The “Sheeple” Close can be a little tricky because no-one likes to think of themselves as a “Sheeple”. It should be shared using a third party example because your prospects like to think they’re intelligent enough to make their own informed decisions. In truth, most people don’t like to make big decisions because they’re afraid of making a mistake (fear of loss is far greater than the ecstasy from gain). It is far safer to look at others to see what they are doing.
The most common human behavioral response, when faced with a difficult decision, is to ask, “What is everyone else doing?” This response can be directly attributed to people meeting two important psychological needs (Maslow’s Hierarchy of Needs):
- Social need– Sense of belonging.
- Ego or self-esteem need– Sense of self.
Basically, buyers and sellers feel that if they aren’t sure what to do, it is much safer to just do what everyone else is doing. The worst case scenario is that a whole bunch of people makes the mistake with them. This is far less embarrassing than being the only one to make the mistake. We call this behavior the “Sheeple” approach because your prospect is just following the crowd.
This approach completely explains why the Psychology of Investing Graph makes so much sense (see attachment). According to this theory and Warren Buffet, the best time to buy something is when everybody else is selling. And, the best time to sell something is when everybody else is buying. This behavior is also consistent with the Law of Supply and Demand.
The best examples of the application of the “don’t be a sheeple” strategy are the real estate boom years and recent stock market swings.
- Real estate boom years– When real estate values were skyrocketing, everyone wanted to get in on the easy profits. People acted like “sheeple” (acting irrationally) because everyone else was buying. In fact, following the herd was the worst investment strategy that could have been used.
- Stock market swings– When the market started to drop, fearing even greater losses, most investors rushed to exit the market and took a beating. Conversely, the more the market recovered and the more people reinvested, the more “sheeple” followed and jumped back in.
In both examples above, the investors that realized the highest returns were the ones that did the opposite of what the crowd was doing. In real estate, the buyers that jump in before everyone else will secure the best prices and realize the highest return. The sellers that wait until everyone else is selling will likely take the greatest losses.
When talking to your prospects, use specific examples of buyers and sellers that you have worked with that have suffered because they have followed the crowd. Reassure them of your confidence that they are not like “sheeple” and are capable of making an intelligent, informed decision without having to get the stamp of approval from others.