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2 Major Factors That Determine Whether Your Clients Will Give You Referrals

Posted by Sammy Harper on Mar 7, 2017 11:19:00 AM

That months-long process of helping your clients find their dream home has finally come to an end. The title has been transferred, you’ve received your commission, and you’ve given a nice bottle of wine as a closing gift.

The transaction is complete. Now the big question is whether your clients will remember the experience as positive or negative.

The key word here is “remember.” Because the way we remember experiences doesn’t always coincide with the way things actually went down. In fact, our memories of experiences are often shaped by just a few isolated moments.

The peak-end rule, founded by psychologist Daniel Kahneman, suggests that when we look back on an experience, our lasting impression isn’t formed by everything that happened, but rather by what happened at the peak (the most intense moment) and the end.

That means these two factors—the peak and the end—will play a huge role in how your clients look back on their experience, and whether or not they will refer you to friends.


Let’s go a little deeper on the peak-end rule.

In his Ted Talk, Kahneman provides an example of the peak-end rule by sharing one man’s story:

“He said he'd been listening to a symphony, and it was absolutely glorious music and at the very end of the recording, there was a dreadful screeching sound. And then he added, really quite emotionally, it ruined the whole experience. But it hadn't. What it had ruined were the memories of the experience. He had had the experience. He had had 20 minutes of glorious music. They counted for nothing because he was left with a memory; the memory was ruined, and the memory was all that he had gotten to keep.”

In this case, the end completely ruined the experience.

Kahneman then goes on to distinguish between our two selves: the remembering self and the experiencing self. The remembering self is the one that makes decisions. “We don’t actually choose between experiences,” Kahneman says, “we choose between memories of experiences.”

What will your real estate clients remember about their experience working with you?


The Peak

It’s no secret that the home buying or selling process is stressful. One survey concluded that people find buying or selling a house to be nearly as stressful as getting a divorce…and more stressful than having a child.

The peak-end rule tells us that the most emotionally-intense moment of the home buying/selling process will play a huge role in how your clients will remember their experience. It’s very likely that this peak will be a stressful moment.

While it’s impossible to prevent many of the stressful things that will happen throughout your clients' experience, you can control how you react to each situation. And how you handle those situations is what will make the difference in whether they remember their experience as positive or a negative.

I surveyed some of my fellow homeowners to find out what they considered to be the most stressful moment of their experience, and how their agents handled it.

One seller described the stress of packing up her cluttered house to get it ready to list, as well as getting everything out by the closing date. But she loved her real estate agent, who called regularly to check on her and offered ideas for storage units to rent.

For a married couple buying their first home, they were most stressed about the unfamiliarity of it all. And while they said their agent was very nice, they felt he could have done a better job of explaining their rights throughout the process. Their lasting impression of the agent is that he was just trying to make a sale, not build a trusting relationship.


The End

Let’s not forget about the second part of the peak-end rule—the end. In most cases, it’s a happy ending. Your clients are in their new home, or their old home has been sold. But even with that happy ending, it’s possible to end on a sour note.

One buyer was happy with her agent throughout the entire process, only to become irritated when the agent never replied to an email. The email was about an electrician the agent had recommended who ended up doing a lousy job. The buyer wanted to warn the agent about recommending this person to future clients. The agent never replied to the email, which left the buyer feeling unvalued and not particularly motivated to give any referrals.


What does this all mean for my real estate business?

Does this mean you should only provide exceptional service during those major moments, the peak and the end? Of course not. This is simply a peek inside your clients’ minds—a closer look at what drives their decisions. It’s important to be aware of what your clients will recall when they’re telling their friends about you.

A year later, your clients might not think to mention how you always showed up on time, how you sent them listings you thought they might like, or how you suggested they repaint the dining room before their open house...but they will remember the time you showed up during a snowstorm to give them a walk-through of an extremely desirable home before anyone else could get to it, or when you took the time to calm them down and explain why they shouldn’t drop their price even though they hadn’t received any offers yet.

As a recent home buyer myself, I want to share one final remark:

Know that in those stressful moments—when you have to be part agent but also part counselor—what you’re doing will be remembered. And rewarded.

Topics: Real Estate Leaders

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