Jonah Berger, Associate Professor of Marketing at Wharton University of Pennsylvania
Marketing & Sales Advice to Help You in Your Real Estate Business
As you probably know, this is the third series of podcasts I have produced. The first series was focused on professors at major universities who had written about real estate topics. Something quite surprising I learned from these academics was that, despite the excellence of their research and the value that it had for the industry, on a good day maybe only 12 people would actually read their papers.
Well today, I'm going to be introducing you to another professor, Professor Jonah Berger, who teaches at Wharton, and who has an astonishing 195,000 followers on LinkedIn. We talk about his book, Catalyst: How to Change Anyone's Mind as well as a handful of other topics that will no doubt add tons of value to your own digital marketing efforts. Enjoy.
What You're Going to Learn
- Why Change Never Comes by Pushing People
- Understanding Reactance and the Anti-Persuasion Radar
- Why Great Salespeople Give People Options
- Why Customer Centricity is Important in Marketing
- Understanding the Freemium Business Model
- How to Lower the Barrier to Trial in Sales
- How to Understand Your Customer’s Needs
- What You Can Learn from Other Industries
- And much more!
Listen To or Watch the Full Podcast Here
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Change Never Comes by Pushing People
ADAM GOWER: Professor Berger, thank you so very much for joining me on my podcast today. You are a world renowned author and speaker and you have a new book out, Catalyst. Actually, what I'd like to ask you, if you don't mind is, there's actually, in the blurb for that book, there is a comment that says, marketers want to change their customer's minds. But my question to you, actually, if I may is, do we want to change their minds or do we not just actually want them to think the way that we think? Do we not want to educate them to think the way we think? Is that something different or is that the same thing?
JONAH BERGER: You know, the question you bring up, at its core, is a very interesting one, right. When we think about changing minds, we tend to take the perspective you just talked about, right. I want to get someone to think the way that I think, which is okay, but it's a very egocentric way to think about change and behavior, right. Let me think about what I want and let me see if I can get other people there. What I talk about in the book, really at its core, is that pushing doesn't work, right. Whether we're pushing people to take our prospective, a customer, a client, we're pushing them to take our perspective. Whether we're pushing a boss or a colleague to see our point of view or we're trying to get a family member to come around and take a particular action. We often think if we just give people more information, more facts, more figures, as you said, they'll come around to see our way of thinking. But there's a problem with that, which is, pushing often doesn't work. If you think about a chair, in the middle of a room for example, pushing is a great way to get that chair move. You push a chair in a particular direction, it goes. When you push people though, they tend not to go. They tend to do the exact opposite of, often, what we want and part of the reason why is because we're not understanding where they are, at the moment. Right? We're really coming after it from what we want, a very egocentric perspective, rather than thinking where they are, at the moment. A good way to think about it is, great catalysts, great change agents, don't say, well, what can I do to get someone to go where I want them to? Instead, they say, well, why isn't that person done that already? What's stopping them? What's the barrier or obstacle that's in the way and how can I mitigate or remove those barriers? And that's a subtle shift, but a really important one.
Reactance and the Anti-Persuasion Radar
ADAM GOWER: So, if I want to raise money from somebody online for my real estate project and this is where we started off. And, the way that we do it is that we, the way that we've thought about it, is to provide enough educational content to draw people in, to attract them. Actually, to allow them to self-select to come into our orbit and then to provide them with enough information that they can consume, at will, what it is they want, so that they are predisposed to doing what we asked them to do at the end of the day. You talk about generating change. In that context, how do you do that? How do you assess what it is that somebody...there is the reason why somebody hasn't, perhaps invested, in real estate before. What is the process of assessing how somebody, you know, why they've not acted in a certain way?
JONAH BERGER: I'll give you a little bit of a long-winded answer, but I think it will be useful.
ADAM GOWER: Sure.
JONAH BERGER: I talk about five barriers in the book. Reactance, Endowment, Distance, Uncertainty and corroborating Evidence. Put those five together, they spell the word REDUCE, which is exactly what great catalysts do. They don't push harder. They don't add more temperature, more pressure. They figure out what the barriers are and they reduce them. And I think one of the barriers, you're talking about at the moment is, is reactance. When we push people, they often push back. People want to feel a sense of freedom and control. They want to feel like they're making choices because they made the decision themselves. Why did I buy this product, use the service, make this investment? I did it because I thought it was a good idea. But, the more we push them, the more they feel like that choice is coming from us rather than them, which makes them less likely to do it. There's something called the anti-persuasion radar. Basically, a radar system that goes off when we feel like someone's trying to persuade us. We ignore the message. We avoid it or even worse, we counter-argue. We think about all the reasons why, what someone is suggesting, is a bad idea. And so, that's a quick summary of what reactance is. If any of you have a 3-year old at home, you probably have experienced it. But then you're probably wondering, okay well, how do we deal with that? And at the core, the idea of how to deal with that is, stop trying to persuade people and get them to persuade themselves.
Great Salespeople Give People Options
JONAH BERGER: In the book I talk about four or five different strategies. I'll mention one here which I think is really relevant to the question you asked about real estate investing. You know, often when we're making a presentation, we present an idea and we say, let me tell you how great this idea is. And we think it's great and we provide a whole bunch of facts and figures and reasons and other things that suggest why it's great. But notice what the listeners doing while they're sitting there. They seem like they're listening. But as I mentioned, they're really thinking about all the reasons why they don't think what we suggested will work. Well sure, you would think this is a good investment. This is the area of the market you work in. You want me to invest with you. How do I know it's actually going to work? How do I know it's actually going to make money? Here's all the reasons why I shouldn't do it. But if you notice what great salespeople do and what great consultants do, they harness a technique called, providing a menu. Very simply, rather than giving people one option, which the listener sits there and they think about all the reasons what's bad about that one option. Instead, they provide multiple. Two options, three options, not twenty five, but a few. And what that does is it shifts the role of the listener. Rather than sitting there thinking about why I don't like this and this is why I don't like it. Instead they're thinking, well, which one of these do I like better? And because they're sitting there thinking which one they'd like better, they're much more likely to choose one at the end of meeting. And it's called a menu because it's very much like going to a restaurant. You go to a restaurant, they don't let you pick whatever you want. They give you a limited set of choices and sends a menu of options that you can choose from within. It's choosing the choice set, but because you're giving people that choice, they have the freedom and autonomy to choose within that option set, making them much more satisfied at the end. What you're doing is, you're guiding the journey. You're not forcing them to do one thing or another. You're giving an opportunity to participate. But because they're participating, the decision is not coming from you, it's coming from within them, which reduces reactants and makes them much more likely to do what you hoped they would do in the first place.
Why Customer Centricity is Important in Marketing
ADAM GOWER: How did these ideas translate to the online world. For somebody who is listening and who wants to market online? I'm not talking about paid ads. Just in, generally being online. How do these lessons apply in the online world? What are the, kind of, practical applications?
JONAH BERGER: I mean, there are lots of examples all throughout the book of both online and offline folks, B2B and B2C folks, products, services and ideas. You know, what was really fun about writing this book is, it's not just a business book. So, you know, sure I interviewed transformational leaders and top salespeople, but I also interviewed doctors who got patients to lose weight. I interviewed hostage negotiators who got people to come out with their hands up. Substance abuse counselors who got people to quit. A rabbi who got people to rennounce the KKK.
JONAH BERGER: A whole bunch of people that got folks to change their mind in much more difficult situations than we often find ourselves. And they did that, again, because at the core, they understood what their audience was dealing with, right? Think about going to the doctor, for example. Like, when you go to the doctor, the doctor doesn't say, well let me put a cast on your leg, right? The doctor started by saying, well, let me diagnose the problem and only once I understand the problem, do I prescribe the solution. And so, in some sense, like I don't talk about it this way but you could think about it this way, you know. One of the barriers is ourself. We're so focused on what we want to achieve that we rarely think about the audience that we're trying to actually persuade. But the more we understand them, in your marketing we'd call this customer centricity, right? The more we understand the audience we're trying to communicate with, and change, the more effective we can actually be.
The Freemium Business Model
JONAH BERGER: Now, if you're sitting there going, wait, how do you make money giving away something for free. Any kid who has ever had a lemonade stand knows you can't make money giving away something for free. But, they didn't just give away something for free. They used a business model many of us know of, is "freemium". They gave away a free version of their service, but then they encouraged people to eventually upgrade to a "paid" version. One that would give them more storage and more features. They said, look, use this free version up until two gigabytes, but, when you run out of storage, feel free to pay us for an upgrade. And many online businesses use freemium. Everyone from The New York Times and LinkedIn and Skype, Evernotes, Pandora, basically, almost every software as a service company uses some version of freemium. It's clear why customers like freemium. It's free, right? Why wouldn't they like something that's free? But companies like it as well. Because, notice what it does. Any time you're asking people to move from something old to something new, there's that uncertainty. It's actually the cost of switching. Not only is it a monetary cost, it's the time, effort. There's an uncertainty cost of switching. What freemium does is it lowers the barrier to trial. Rather than having to pay all the monetary costs up front, it makes it cheaper, essentially, for people to try something. Because rather than you saying, hey, Dropbox is really good, which they're not going to believe, freemium lets people experience the value themselves. It allows them, by lowering the barrier to trial, it encourages them to say, well, do you like this thing? Check it out. And if you like it, right, then come pay me some money. And your listeners might be saying, well, hold on, I get it. Freemium is really useful if I'm Dropbox. It's really useful on The New York Times. It's really useful if I'm Pandora. But I say there's a free version with ads. We want to get rid of the ads and paper. But how would I use this, right? I mean, what's freemium in real estate investing, for example? But what's neat about freemium is, it's actually not freemium itself. It's an example of a much broader principle which is lowering the barrier to trial.
Lowering the Barrier to Trial in Sales
ADAM GOWER: Not only do you teach marketing at one of the top universities in the world, have a PhD in marketing from one of the top universities in the world, and are extremely good at marketing. Let me ask you this question. Of all the things that you do, to market your books, what is the most effective tool that you use? What is the most effective channel?
JONAH BERGER: Yeah, I mean, going back to what you just said, I don't know that it's the most effective, but it's the one I personally believe in the most, is this notion of trying to give people an appetizer for free, right. This is actually why I wrote this book. So, 2013, I wrote a book called Contagious that changed my life. Before that book, I was completely an academic. All research. All teaching. Published that book, suddenly I was getting calls from Google and Nike and Apple and Facebook and small startups and everybody in between, who wanted help getting their stuff to catch on. I learned a lot about business from doing that. And there was a principle, though, that didn't make that first book, which was this notion of, kind of, reducing the barrier to trial and allowing people to experience something themselves. What I love about that idea at the core, is if, what you're offering is good, you shouldn't have to sell it, right? We think about a funnel often, in marketing. Awareness and then persuasion, right? If something's actually very good, you shouldn't need to have to persuade people. All you have to do is make them aware that it exists but the world is busy, lots of stuff is going on. And so, by giving away high value things, not everything. You don't want to give away the whole meal because then, where do you have to create revenue? Just like freemium, give away something of value. If it's really good, if it's really useful for people, they'll come back for more, right. And so, I agree it's not always easy to apply this principle everywhere. But at the core, it's a really insightful idea. If what you're offering has value, then all you need to do is figure out how to find the people that believe in that value and allow them to experience it themselves. Because once they've experienced it, you don't need to persuade them. They've convinced themselves.
ADAM GOWER: Exactly, right? They've come to trust you and now they want more and they're willing to write a check for that more.
Understand Your Customer’s Needs
ADAM GOWER: What's been the hardest lesson you've learned? Normally I say: hardest lesson in real estate, hardest in business, but in this context that we've been talking about.
JONAH BERGER: I think that idea of keeping your audience in focus is always important. I talk to a lot of people and, you know, as an academic, I deal with this myself sometimes where I find something interesting. I find something valuable and that's fine, if it's a hobby, right. Whatever you find valuable, if you want to, I don't know, collect obscure coins as a hobby. It doesn't matter whether anyone else cares about it. You could organize rocks in your backyard. If it's your hobby, fine. But, if your goal is to make that thing into a business, whether that business is selling products, services, ideas, whatever it is, you have to have an audience, a customer. Whether it's a true customer or not, who's interested in it. And I think, too often, we get enamored with things we like, but we don't think enough about who our customer is and what things they like. And so, whether that's writing a book, writing an academic paper, finding an investment, it's less just about whether we like that thing, but making sure that we keep that customer in the fore so we make sure we can interest someone else in that thing as well.
ADAM GOWER: That is not an easy thing to do.
JONAH BERGER: It's not easy but it's possible.
What You Can Learn from Other Industries
ADAM GOWER: Apart from buying all of your books, what advice would you give to somebody and you know my world is real estate developers who, for the first time in history, have been allowed to actively market to raise money for their projects. What advice would you give to somebody listening now who has never marketed online, let's say, before? What would be the key piece of advice that you would give them?
JONAH BERGER: I think, look at what other people are doing, in other industries. Innovative people, innovative companies, are doing in other industries and think about how you can bring it back into your industry, right. It's really easy to focus on just what you're doing today and the ways of doing business today and, sort of, a small micro-improvement in what you're doing that will make tomorrow or next week easier. But as we think longer term, five years, 10 years, whatever it might be, the more we're looking outside our industries, not just in our own industries, but outside our industries, the more we understand how business is being done more generally and the more we can draw some lessons that are really valuable. One thing I loved about writing this book, is take that example, providing a menu, right. I got that idea from talking to a great consultant, someone who sells, essentially ideas, for a living. And then I talked to a parenting expert, who basically said the exact same thing. Said, you know, when you're trying to get your kids to eat their vegetables or put their clothes on at night, give them a choice. Do you want to put on your pajamas first, your pajama top or your pajama bottoms, right? Your broccoli first or your chicken? And so, it's not just about looking within one industry. It's really easy to be narrowly focused on your own industry and I think that's good, up to a point, right? Take your head a little bit out of that sand, look around, see what's going on in other spaces. It may not be useful tomorrow or next week, but in five years or ten years, it'll pay big dividends.
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