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Extending the 'Strangers on a Plane' Phenomenon to Real Estate

Sept. 1, 2011

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By Leslie K. John, PhD

Why does a plane ride create such an intimate setting, often inspiring strangers to exchange life stories and share intimate personal information without regard for privacy or consequence? Although this experience is likely dependent upon personality type, how can the "Strangers on a Plane" phenomenon have impact for the real estate industry?

Unlike SOAP, the real estate sales environment lends itself to more than one-time, transaction-based interactions. Therefore, a single positive interaction with a client can yield an abundance of sales opportunities: one client relationship has the potential to produce multiple home sales, generate numerous referrals, and enhance an agent's reputation throughout the local market. To capitalize on down-the-line sales transactions, a proactive agent must learn to effectively uncover the right information. Great information is also needed to send the right signals and tell the right stories to advance someone from a prospect to client, and then from client to satisfied customer. The agent must uncover a client's explicit and latent home buying or selling desires and fulfill the client's expectations, which will facilitate a long-term business relationship.

Some consumers willingly divulge sensitive and private information interpersonally or through social media outlets; yet, other consumers seem to have a more guarded approach when the privacy of their personal information is in question. An agent must strategically consider how to gain access to insightful client information.

To learn more about consumers' willingness to divulge sensitive information, my collaborators, Alessandro Acquisti (CMU), George Loewenstein (CMU) and I conducted a series of experiments to investigate factors that influence consumers' privacy concerns. By systematically varying different features of our experiments, we identified questioning methods and contextual cues that facilitate disclosure. Our results have important implications not only for general consumer research, but also for real estate agents and the B2C sales industry.

The Research

Research participants were asked to disclose sensitive information by indicating whether they had engaged in a series of sensitive and/or illegal activities. We systematically varied factors hypothesized to affect participants' privacy concern. We compared the Affirmative Admission Rate - our measure of willingness to divulge - as a function of the different experimental conditions.

Our first experiment explored differences in willingness to divulge (i.e., to respond affirmatively) based on the way the questions were posed. Visitors to the New York Times web site were invited to take an online survey entitled "Test Your Ethics" and were randomly assigned to a survey that employed either a direct or indirect questioning method.

In the direct questioning method, participants were simply asked to indicate whether they had engaged in each behavior (i.e. "Have you done this behavior?"). In the indirect questioning method, the act of admission was tightly coupled with the task of rating the (un)ethicality of the behaviors: for each behavior, participants were presented with two questions: "If you have ever done this behavior, how unethical do you think it was?" and "If you have never done this behavior, how unethical do you think it would be, if you were to do it?" The same ethicality scale appeared twice, once below each of these two questions. Because it was only possible to answer using one of the two rating scales, we were able to infer admissions [denials] based on which of the two rating scales the respondent had used.

Although the inquiry conditions solicited the same information - whether the person had engaged in the sensitive behaviors - the indirect inquiry condition was designed to make admissions seem secondary, which we predicted would downplay privacy concern. Consistent with this hypothesis, the indirect inquiry method elicited greater disclosure.

In a second set of experiments, we tested whether a contextual cue designed to affect privacy concern, namely the look and feel of a survey, would impact disclosure. These experiments were inspired by the Facebook group "30 Reasons Why A Girl Should Call It A Night." On this site, young women voluntarily post compromising pictures of themselves-pictures that they would probably be mortified to share in most other situations. We thought that the frivolous nature of this group suppressed privacy concern and encouraged divulgence.

In these experiments, we asked students, point-blank, whether they had engaged in a series of sensitive behaviors. The students were randomly assigned to answer the questions on one of three interfaces that differed in how they looked: unprofessional, professional, or neutral. The unprofessional interface, much like the "30 Reasons" group, was intended to downplay privacy concern and elicit divulgence. The results indicated that participants who took the survey on the unprofessional interface, which was designed to reduce privacy concern, were more willing to admit to engaging in questionable behaviors than those who took the survey on professional or neutral interfaces. This result is particularly surprising, given the increased dangers associated with disclosing on unprofessional web sites (e.g. Cranor 2008).

In a final experiment, we predicted that, if cued to think about privacy from the outset of the experiment, people would approach the unprofessional-looking survey with caution, which would decrease divulgence. Prior to administering the survey, in which participants were exposed to the professional or unprofessional interface and were asked whether they had engaged in different behaviors, participants completed a "photo-identification task." For half of respondents, the task, to "Phind the Phishing emails," was intended to rouse privacy concern. These participants were shown email messages and identified which were phishing emails (i.e. fraudulent emails that attempt to lure recipients into disclosing sensitive information) and which were "just spam." The other half of participants completed a control photo identification task - "Find the Endangered Fish" (intended to not rouse privacy concern). As predicted, the effect of the survey interface on disclosure depended on whether privacy concern had been roused at the outset of the experiment. The unprofessional-looking survey's ability to elicit divulgence was eliminated among participants who completed the phishing task.

Implications for the Real Estate Professional

Although the context of the studies and the questions asked were unrelated to the real estate industry, the results emphasize the importance of method and context when collecting consumer information. With respect to method, people are more forthcoming with sensitive information when they are asked indirectly. As for context, it would be an overgeneralization to conclude that realtors should make their web sites look unprofessional; this is likely to backfire for one because it would violate consumers' expectations. The appropriate takeaway from this set of studies is that people are more forthcoming with sensitive information when contextual cues that might signal a potential privacy concern are minimized. These insights have direct implications for the real estate industry.

In the real estate context, uncovering key demographic and market information might be important as you consider a particular range of homes to present to a client ("How much can she afford?"); as you negotiate closing terms on the sale of a home ("How aggressive can we be in our offer?"); and even as you develop your personal marketing strategy ("To whom am I trying to market my services?"). Identifying this information can help you be more efficient in your client interactions.

With respect to inquiry method, instead of asking a client, "What is your annual salary?" or "What is the top end of your housing budget?," you might consider an indirect approach to gain an accurate picture of what she can afford or how high she is willing to go in a home purchase. You could obtain this information indirectly, by asking: "The typical monthly payment for the houses you are interested in is $1,500-$2,000; would that range work for you?" Or, a slightly more direct method would be to ask: "This house is $200,000; is that in your range?" A key feature of the indirect approach is that the respondent does not have to overtly divulge the information; in the above example, she simply has to agree or disagree with your statement, rather than vocalize an explicit dollar value. Although both inquiry methods are designed to obtain similar information, the indirect approach feels less invasive and lends itself to greater disclosure.

The SOAP phenomenon speaks in part to the importance of context. Much like the casual look and feel of the web site elicited disclosure in the research studies, you may be surprised at how much more forthcoming a client is, as a simple function of the contextual cues that emanate from the surrounding environment.

Research suggests that cues, such as the context in which questions are asked, exert a particularly strong influence when people are a) uncertain of what they want and b) operating in an unfamiliar domain (e.g. Fox & Tversky, 1995). This is certainly the case with many homebuyers, first-time homebuyers in particular. Contextual cues are therefore likely to play a particularly important role in agent-homebuyer interactions.

Concluding Comments

This article outlines information elicitation techniques and discusses how realtors may find them useful. But, I must acknowledge that these techniques may put consumers in a vulnerable place, by inducing consumers to disclose information that is against their self-interest. However, unlike the one-off "strangers on a plane" situation, repeated transactions are the basis of a realtor's success. Importantly, this feature provides a safeguard to consumers - it creates an incentive for realtors to use these elicitation techniques judiciously, such that the end result is a satisfied customer.

Gaining insight and valuable information from your customers can generate many opportunities for agents in the real estate industry. Consider how you might leverage approach methods (direct versus indirect) and contextual cues to reduce privacy concern to create mutually beneficial value for your clients. They may not be "strangers," but you have the opportunity to connect with your clients as if they were your neighbors on a plane. The realtor is an 'arm's length' observer - connected enough to understand the client and his situation, but disconnected enough to provide dispassionate commentary. This very tension - between intimacy and detachment - may be the critical ingredient in disclosure.

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References

John, Leslie K., Alessandro Acquisti, and George Loewenstein (2011), "Strangers on a Plane: Context-Dependent Willingness to Divulge Sensitive Information," Journal of Consumer Research, 37, 858-875.

Cranor, Lorrie, Serge Egelman, Steve Sheng, Aleecia D. McDonald, and Abdur Chowdhury (2008), "P3P Deployment on Websites," Electronic Commerce Research and Applications, 7 (3), 274-93.

Fox, Craig R. and Amos Tversky (1995), "Ambiguity Aversion and Comparative Ignorance," Quarterly Journal of Economics, 110 (3), 585-603.

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About The Author

Leslie K. John
Assistant Professor in the Marketing Unit, Harvard Business School

Leslie K. John has a PhD in Behavioral Decision Research from Carnegie Mellon University and a BA in Psychology from the University of Waterloo.

Leslie's research focuses on questions that can be best informed by considering how both firm activities and policy initiatives - sometimes in concert, sometimes in conflict - impact the lives of consumers. Her primary stream of research is focused on understanding when and why consumers are willing to divulge sensitive personal information. Her secondary interest is in developing incentive schemes informed by behavioral economics to help consumers improve their own health. Leslie explores these topics using behavioral methods, both in the laboratory and in the field.

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