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Can A Book be Judged Accurately Only by its Cover?

March 1, 2016

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Zachary R. Hall, PhD, Michael Ahearne, PhD, and Harish Sujan, PhD

Sales professionals make judgments of their customers’ preferences and tastes throughout the selling process – at times without being conscious they are doing so. These judgments enable effective selling. Selling requires salespeople to, constantly, place themselves in the shoes of their customers.

Salespeople make two types of judgments: those based more on intuition and those based more on deliberation. Drawing from Dane and Pratt’s (2007) work on decision making, intuition is defined as judgments that derive from rapid, non-conscious, and holistic associations and deliberation as judgments that derive from slower, conscious, and analytical associations.

Our Study

Our study examined the relationship between intuitive and deliberative judgments together – a relationship not previously studied in sales outcomes. There were two sets of research objectives. The first centered on understanding the impact of salespeople’s judgments of their customers. We were interested in knowing whether or not salespeople can make accurate, snap judgements about their customers using only non-verbal cues, and whether or not these intuitive judgments improve selling effectiveness and/or selling time? We also evaluated whether or not these intuitive judgments are more or less important than judgments based on more traditional sales processes such as questioning and listening?

The second set of objective focused on how to enhance the accuracy of both salespeople’s intuitive and deliberative judgments. Our questions focused on deliberative characteristics of sales – customer orientation and listening – and intuitive characteristics – domain-specific experience, salesperson-customer similarity, and social intelligence in the form of empathy.

To answer these questions, we recruited the assistance of a mid-size U.S.-based retailer specializing in one product line whose value ranged from $100 to $4,000. Data collection consisted of pre-study qualitative interviews, a field study, and a salesperson post-study survey that allowed us to measure salespeople’s intuitive and deliberative judgments of their customers in multiple ways.

Our research suggests how real estate agents can improve both their effectiveness and their efficiency through accurate judgments of their customers.

The Combination of Deliberative and Intuitive Accuracy Leads to Increased Sales Effectiveness

Without question, past research suggests, accurate intuitive and deliberative judgments are important. While the individual effect of intuitive and deliberative judgment had been examined, the interactive influence of these judgments, in a sales context, had not been examined.

We find in our research that salespeople have the innate ability to make accurate judgments of their customers’ needs. While prior research had shown that accurate deliberative judgments improve sales performance, our findings suggest that this is only when they are preceded by accurate intuitive judgments. When salespeople make accurate intuitive judgments and revise these judgments upon deliberation the benefit of intuitive accuracy is lost.

Overthinking is no doubt the enemy of intuitive accuracy and can facilitate or derail progress in that area. To achieve optimal performance benefits, a salesperson must be accurate in both intuitive and deliberative judgments. Salespeople who start with a high intuitive accuracy but, after deliberation, “correct” their earlier judgments have lower selling effectiveness, longer selling times, and, as a result, lower selling efficiency.

Numerous antecedents of perceptual accuracy were identified through the study. Domain-specific experience, similarity with the customer, and empathy were found to favor intuitive accuracy. For deliberative accuracy, a customer orientation and listening skills favor the skillset.

Our research has numerous implications for management. When accurate intuitive and deliberative judgments are made, performance, judged by the amount sold per hour, improves by more than 130%.

By knowing your salespeople’s ability to make accurate judgments, managers can equip their employees to do their best. By identifying specific strengths and weaknesses of individual sales people, tailored training can be provided to improve intuitive and deliberative accuracy thus promoting an increased ability to judge customers holistically.

Finally, through accurate judgments and analysis of customers, appropriate initial selling strategies can be developed to match the needs of each individual customer. This behavior increases the customer’s likelihood to purchase, increases the amount the customer spends, and decreases the selling time. Improved sales performance can be encouraged through tailored selling strategies from the onset of a sales interaction and the wisdom to continue to trust these judgments upon reflection.

Implications for Real Estate Sales Professionals

What does this mean for real estate professionals? Based on this research, we offer four recommendations that real estate professionals can implement to improve their selling effectiveness.

1. Place the client’s needs at the heart of the sales process. The first thing real estate professionals (agents and their managers) should do is make sure that the sales process revolves around understanding your clients’ needs. Too often, we find that compensation structures (e.g., commissions) and other factors blind sales agents from the importance of finding the right product for the right customer. In our research, we find that sales agents who can accurately assess what their clients’ needs both through non-verbal cue reading and through questioning techniques and listening are more successful.

2. Embrace the power of your intuition. In our experience, many sales managers restrain their agents from using their “gut feelings” in support of tried-and-tested sales processes. While structured, customer-oriented sales process are important, sales agents’ first impressions, whether on the phone or in person, affect how they treat the customer, how much time they invest in the customer, which home(s) they show the customer, etc. Our findings show that more often than not, their first impressions are accurate and when they are, their selling effectiveness and efficiency improve significantly. Further, we find that overthinking and questioning their intuition (termed wasted intuition), compromises performance. Sales leadership should promote sales agents to use and trust their intuition.

3. Rethink “Top-Down” selling. A traditional selling technique is to show the most expensive, most elaborate home to a client. In doing so, an agent hopes that the client has psychologically increased their budget and expanded their needs in a home. Our findings suggest that this approach can compromise your success as an agent. We find that top-down selling, if outside the client’s budget and needs, creates distrust. In contrast, when sales agents show their clients homes that better match their needs, clients feel that the sales agent “knows” them and has their best interest in mind. In the real estate profession, which is heavily dependent on trust and word-of-mouth, this should be even more important.

4. Improve your social intelligence skills. In order to make accurate intuitive and deliberative judgments about your clients requires social intelligence. Of these, reading your clients’ nonverbal cues (e.g., hand gestures, body language, facial expressions, and appearance) is critical to understanding your customer’s needs, feelings, and thoughts. Social intelligence can be improved through empathy and perspective taking training. Further, sales agents can improve their social intelligence in the real estate profession by actively documenting their impressions of customers. Through this exercise, sales agents can learn from their judgment errors, which will enable them to develop knowledge of the relationship between nonverbal cues and corresponding customer types. We feel that this is critical for new sales agents and even suggest that they review their impressions (success and failures) with another agent or manager.

Conclusion

Forming accurate judgments regarding a client’s preferences is of utmost importance if a real estate agent is to be successful. Learning such skills does not need to be difficult, but it should also not be assumed that all agents are skilled in each characteristic from the outset. By acknowledging a deficit and dedicating time to growing in less-developed areas, a real estate professional can dramatically increase their potential and develop a skillset that will benefit them daily in their work.

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Recommended Reading

Hall, Zachary R., Michael Ahearne, & Harish. Sujan (2015), “The Importance of Starting Right: The Influence of Accurate Intuition on Performance in Salesperson-Customer Interactions,” Journal of Marketing, Vol 79 (May 2015), 91-109.

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About the Authors

Zachary R. Hall, PhD
Assistant Professor of Marketing, Neeley School of Business, Texas Christian University

Zachary Hall is an Assistant Professor of Marketing at TCU’s Neeley School of Business. He holds a PhD in Marketing from the University of Houston, a MS in Finance and MBA from Texas Tech University and BBA in Marketing with honors from Texas A&M University–Corpus Christi. Dr. Hall’s research examines factors that effects the performance of salespeople, sales teams, and sales organizations. His research focuses on investigating these performance issues from a dyadic perspective in both salesperson-customer exchanges and manager-employee relationships. His research has appeared several times in the Journal of Marketing.

Michael Ahearne, PhD
C.T. Bauer Professor of Marketing and Executive Director, Sales Excellence Institute, C.T. Bauer College of Business, University of Houston

Michael J. Ahearne is Professor of Marketing and Executive Director of the Sales Excellence Institute at the University of Houston. Dr. Ahearne's research examines factors influencing the performance of salespeople, sales teams, and sales organizations. He was recently recognized by the American Marketing Association as one of the 10 most research productive scholars in the field of marketing in the past five years (2009–2013). Dr. Ahearne also coauthors the highest grossing professional selling textbook in the world, Selling Today: Partnering to Create Customer Value. Dr. Ahearne has published in the Journal of Marketing, Journal of Applied Psychology, Journal of Personal Selling and Sales Management, Harvard Business Review, and Journal of Marketing Research.

Harish Sujan, PhD
Professor and Freeman Chair of Business, A. B. Freeman School of Business, Tulane University

Harish Sujan is Professor of Marketing and A.B. Freeman Chair in Business at Tulane University. His research focuses on understanding different forms of motivation, including learning goals, optimism, and the concept of flow. His work has been published in several journals including the Journal of Marketing, the Journal of Marketing Research, the Journal of Consumer Psychology, the Journal of Personality and Social Psychology, and the Journal of Personal Selling and Sales Management.

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