The Affordable Care Act is President Barack Obama’s signature achievement.
However, its litany of setbacks includes the employer mandate delay, higher premiums and deductibles than touted, the website debacle and the fact that millions of people are being forced to drop their current, preferred coverage.
Only government can create this level of incompetence. Yet those issues are not the biggest difficulty for the president. Instead, Mr. Obama’s seminal mistake was setting unattainable expectations. The backlash and problems that President Obama now faces (his approval rating is at its lowest since taking office) were easily avoidable.
The president and his advisers had to know that they made promises and projections that were unrealistic. What they did not consider fully was how the fallout would impact the president’s effectiveness and legacy.
Enter the concept called the “expectations gap” or e-gap for short. The e-gap is the gap or difference between what people expect (expectations) and what they get (reality). It is a predictable, direct and constant relationship that drives trust and loyalty between people or entities.
The e-gap posits that when expectations exceed reality (over-promise and under-deliver) people are disappointed and trust and loyalty is diminished. If expectations are simply met (promises kept), trust and loyalty remains unchanged. It is only when people’s expectations are exceeded (under-promise and over-deliver) that trust and loyalty are deepened.
This has significant consequences for the way brokers conduct business. To be clear, if you do what you say, the relationship remains the same, but that is not good enough. Stasis is not an acceptable option.
Brokers fall prey to the e-gap all the time. I am amazed at how some brokers, in an attempt to win business, consistently provide valuation guidance at unattainable levels. This strategy, which can occasionally win business, results in low closing rates, little repeat business, months lowering client expectations and lost credibility. Brokers who oversell the value of a property to get an exclusive may defeat the competition for a day but ultimately will alienate and disappoint the sellers.
Why over-promise? Sometimes, it is for innocent reasons such as the sincere belief that a crazy price can be achieved. More often, it occurs because of low confidence or poor training and skill levels. For example, Mr. Obama made outrageous statements and compromises, because he lacked the political capital or acumen to get the legislation passed. Exaggeration is the last refuge of the mediocre.
Disney is a great example of how to manage expectations. They intentionally overstate wait times for rides. When the wait time is 60 minutes, it will take about 45, and you will be happy, not because you waited 45 minutes, but because it was faster than you expected. Contrast that with the typical NYC restaurant where they state the wait is 15 minutes and 45 minutes later you are just being seated. What approach do you prefer?
Here are some tips for brokers to bridge the e-gap.
Managing time expectations: Default to providing worst-case scenarios and not best when discussing length of marketing process, closing dates, etc. As a simple example, don’t say “will call you back in five.” That is the best-case scenario. Instead, say, “I will call you back in an hour.” By under-promising, you create the opportunity to exceed expectations.
Pricing expectations: Some brokers, as I mentioned, never achieve close to listing prices, and exclusives turn into permanent listings, get canceled or expire because of unmet pricing expectations. Avoid making pricing expectations the focal point. Direct attention to your marketing program and how it alone will maximize value and not some random number.
Preparing people for setbacks: We recently won business, because another broker promised an owner that there would be no issues on the way to the closing table and myriad ones arose. The broker would have been better served to say that “challenges may arise, but our job is to manage them and get you to the closing table.”
Under-promise and over-deliver your way to success!