Selling To Seniors – The Principle of Reciprocity

Oct 20, 2016 | Executive Corner

By Tom Mann, Principal, Executive Vice President

Research has shown that the simple act of “gifting” can increase your sales team’s closing ratio by 25-50%. Think about that. Think about how hard we work in senior living to gain a 5% improvement in our closing rates … the training … investing in our CRMs … etc., etc. (all good stuff, I might point out). Understanding each of the Principles of Influence can dramatically improve your sales team’s effectiveness. Thus far, we have covered five of the six –  ConsistencyLikabilityAuthoritySocial Proof, and Scarcity. Today, we wrap up the conversation with the principle of Reciprocity.

Buying a retirement villaDr. Cialdini uses a great example, in his book The Principles of Influence, of one of his Arizona grad students trying out an experiment. The student got a California phone book and at random selected two-hundred names, which she then sent Holiday Greeting cards. Now remember, these were people she did not know . . . living in another state! Amazingly, holiday cards from the receivers flooded back in! These are people sending cards to a person they did not know! Why? Because they owed her … and because they didn’t want to admit they couldn’t remember her. Even more amazing, is that she built real relationships with these people over the years. In fact, when it was time for her son to attend orientation at Stanford, who do you think he stayed with? That’s right, one of the “holiday card” people.

So how can you use this principle to your favor?

My favorite example of this is a sales person who, during an appointment buys, with a dollar out of his pocket, a soda for his guest. In the experiment, the mere act of him paying for the soda with his money significantly increased his closing rate over instances where he just grabbed a soda out of the company refrigerator. Why does this work? Because the power of reciprocity is sooo strong!

At Love & Company, we tell our retirement community clients, that instead of just having a coffee machine in the corner of the sales office, the salesperson should make their guest a cup of coffee, preferably in fine china. The whole experience should be a ritual in service. “Would you like some cream? Sugar?” Although out of these two examples, I would say the soda example is much stronger because the sales person is paying for it out of his pocket. And therefore, the person owes HIM something.

I have always said that the best way to engage reciprocity is through unmatched customer service. The most loyal prospects and residents are created through relationship marketing and an approach to post-sale customer service and relationship management that builds strong ties with your prospects and residents – not one strictly based on price. If you do it right, you’ll actually have residents who stay in touch – for example, sending you referrals even after they move away. You can’t beat that kind of goodwill.

For more information on how you can improve your sales team, contact Tim Bracken at 410-207-0013.

Attending LeadingAge National? Be sure to attend our sessions, Predictive Modeling: Identifying the Prospects Most Likely to Buy, and Staying Competitive and Preparing for the Future. See you in Indianapolis!

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