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Takeaways:
- What the Law of Three means in real estate.
- How to apply it to buyers.
- What visitors to your real estate website want.
You show your buyers 20 houses, and they are unable to decide which house is right for them. “The Law of Three” provides a simple strategy for overcoming this problem, as well as providing a practical framework for both your online and print advertising.
The Law of Three is a widely used sales strategy that assists clients in arriving at decisions more quickly. Quite simply, it means giving consumers no more than three different choices from which to choose.
When there are more than three choices, the consumer becomes confused and often walks away without buying anything.
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Although women might want to see every possible pair of shoes in the mall before they make a decision, when it comes to electronics or even men’s clothing, most retailers limit choices for their various types of items to three.
In fact, you can even see the Law of Three at work at your local Chinese restaurant’s lunch special that asks you to select an appetizer, soup and main course.
What you can learn from laptop marketers
To better understand how the Law of Three works, consider how Apple and Dell market their laptop computers. Apple is a master at using the Law of Three.
For example, they provide the details about the 13-inch MacBook Pro computer on one page, but when you click on the “Buy” button, you have three simple choices.
In contrast, the Dell site requires the user to choose between six different machines and then to make another 12 choices before pushing buy. In other words, that’s 18 opportunities for the consumer to walk away without purchasing.
The same is true of most real estate websites, especially for those that have not been optimized to be mobile-friendly. They have too many choices, too much text and too many pictures.
Real estate Web visitors want three things: what’s for sale, what’s my house worth and community information. Lay out your site so it is grouped into these three categories. (Consumers do want multiple photos of your listings.)
1. A slick marketing technique
Daniel Ariely, the author of “Predictably Irrational,” describes a fascinating experiment that illustrates a slightly different approach to using The Law of Three.
The question he asked was when people have a choice between three options for ordering “The Economist,” which one would they be most likely to choose?
1. The online subscription for $59.95?
2. The print only for $89.95?
3. The print and online together for $89.95?
Over 80 percent chose the print and online together. When given only two choices, the large proportion of the subscribers chose the online version only.
What does this have to do with selling property? If every house you show is in excellent condition, the buyers can become confused and might even walk away. Too many choices can kill the sale.
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Consequently, Ariely suggests that you show two differently styled homes in excellent condition. Then show a third home that has the same style as one of the first two, but needs some work, such as a new roof, landscaping and so on.
By giving the buyers a third, less desirable choice, it makes easier it for the buyers to choose one of the A-plus houses.
2. Use rank ordering to simplify choices
Another way to use the Law of Three, especially when you are showing multiple areas or a large number of properties, is to ask your buyers to rank the order of the top three houses they have seen.
When clients see a new property that they like, ask the buyers to determine whether that property should replace one of their three former top preferences.
3. The Law of Three and the alternative choice close
The Law of Three also works well when you are attempting to close a client using an alternative choice close. Remember, avoid giving them more than three choices.
For example, if your buyers are in a multiple-offer situation, close using the following script:
“Mr. and Mrs. Buyer, there are several other offers on the property you like. You have three options for dealing with this situation.
“The first is to make an offer as if no else is involved in the bidding. The second is that if you really want this property, make an offer at asking price or over asking. The third option is to walk away. It’s your choice, what would you like to do?”
The Law of Three is a powerful tool that can help you attract more clients and close more deals. Take advantage of it.
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Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Learn about her training programs at www.RealEstateCoach.com/