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 to 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 make 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 Buying 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 “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 dropped to 6,500 in March of 2007, 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 and sellers that jump in before everyone else will secure the best prices and realize the highest returns. The buyers and sellers that wait until everyone else is buying and selling will likely take the greatest losses.
When talking to your prospects, consider how the “Sheeple” mentality fits the following scenarios.
- Fiscal Cliff & Impact of Tax Legislation – Most buyers are hesitant to purchase a home until the uncertainty about the Fiscal Cliff and the impact of tax legislation are identified. Once these issues are resolved, the competition among “Sheeple” buyers will increase dramatically leading to higher prices and less selection for those that wait.
- Impact of Hurricane Sandy on the Jersey Shore – The devastation caused by Hurricane Sandy has created a real mess of a situation. Sellers are concerned about the lack of motivation to transact real estate business causing most of them to wait until at least early spring for a resolution. Sellers that list their property now, will have little competition and could realize a higher price from displaced buyers. “Sheeple” sellers will miss this opportunity.
- “Sheeple” Agents – The Fiscal Cliff, tax changes and impacts of Hurricane Sandy have left most agents in a state of paralysis. These “Sheeple” agents ignore the great relationship management and sales opportunities that result from adversity. These agents will wait for other agents to give them the solution. Agents that are “shepherds” will identify great opportunities before other agents and exploit these opportunities to their clients and to their own benefit.
What’s the difference between a shepherd and sheep? A shepherd owns the flock, while sheep quit often, end up as part of dinner.
The choice is yours. Are you a shepherd or a “Sheeple”?