Why Deals & Discounts are Really about Emotion

Why Deals & Discounts are Really about Emotion

Last week I made the argument for why business cases don’t work in recruiting appointments.

The quick summary is they don’t work because the decision to switch brokerages is an emotional one, not a logical one.

And whenever I make that argument, I’m typically asked about two situations:

1.) When an agent switches because of a deal or incentive

2.) When an agent switches to a discount brokerage

So let’s take a closer look at those two situations.

Deals & Incentives

In my hometown of Sarasota, Coldwell Banker is writing six-figure checks to get producing agents to join.

Several other local brokerages are more than happy to cut agents deals on splits or fees.

And when agents accept these incentives and deals, it appears on the surface the decision is purely about dollars and cents.

But appearances are deceiving.

One of the biggest reasons agents don’t switch companies is fear. Fear of what people will think, fear of losing money, and fear of making a bad decision.

When brokers offer agents deals or incentives, they help eliminate those fears.

The fear of lost money goes away in the face of zero fees or a fat check. And who would blame someone for taking advantage of a fantastic deal?

Agents can justify accepting deals or incentives because it feels safe to do so.

But let’s set aside fear for a moment. Because it isn’t a factor in every decision to switch.

What other emotional components could come into play when accepting deals or incentives?

Pride. Recognition. Ego.

Receiving a big check or cutting a fantastic deal feels good. And when other people know about it, it’s a status booster.

So even when agents switch because of deals or incentives, there’s still a huge emotional component in the decision.

Discount Brokerages

I’m guessing you have one or more 100%/discount brokerages in your market (maybe you run one yourself).

And when agents switch to those companies, it’s easy to assume the decisions are logical ones based on commission savings.

But ask agents at discount companies why they joined and you’ll quickly hear the emotion.

Here are some actual responses:

“Big-box brands are a waste of money. My clients work with me because of me and I’m confident I can be successful without one.”

“I paid my broker a bunch of money but felt like I barely got anything in return.”

“I got tired of my broker constantly having his hand in my wallet.”

Many agents with discount companies are there because they feel they overpaid their previous brokers.

Many other agents are with those companies out of a fear they wouldn’t be able to afford the fees at a different company.

So although agents’ decisions to join discount brokerages appear logical and based on saving money, there are always emotional components running in the background.




P.S. - I don’t mean to imply you should never make a business case during a recruiting appointment.

A business case is a tool. And making one can often give agents who are already sold emotionally a logical reason to justify that emotion.

The problem arises when a business case stops being a tool and instead becomes the sole focus of the appointment.

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