Ten years ago, Jeff Shore, founder and president of Shore Consulting, published “The 4:2 Formula,” designed to give sales professionals tools and techniques to succeed in the housing market.
The book identifies four key categories of discovery questions (relationship, motivation, current dissatisfaction, and future promise) to help move toward two vision agreements (summary dissatisfaction and summary solution). Shore recently released a 10th anniversary edition, accounting for changes in the housing market and providing new practices, techniques, and strategies.
Shore spoke with BUILDER to discuss the updates to “The 4:2 Formula,” takeaways for sales professionals from the book, how the industry has transformed since the book first published, and how sales professionals can operate in the current housing market.
BUILDER: What can readers expect to take away from the 10th Anniversary Edition of “The 4:2 Formula?”
Shore: When you think about where we were 10 years ago in 2013, we were just coming out of the worst recession since the Great Depression. There were still a lot of questions about what was going on, and customers were very skittish. There weren’t a lot of new-home sales in 2013. When I first wrote the book, [the focus] was let’s get to know [the customers’] story, let’s get to figure out who they are.
Here we are in 2023, and I would argue the customers are equally as skittish but for different reasons. We’re seeing now about 80% of Americans are saying it’s not a great time to buy a home, and yet there’s such a housing shortage that people are out there saying how can I buy a home? There’s a lot of confusion out there in the market and I wanted to be able to address that and recognize that if you’re a customer, it’s a difficult time. You’re having to face huge headwinds from market conditions, naysayers, interest rates, prices, and then, if you want to buy a resale, there’s just nothing out there. I wanted to update it because we have to understand our buyers’ journey [more] than we ever have.
If you look at late 2020, 2021, and even early 2022, you didn’t need to know what the buyer was going through. You had a home, they wanted it. Deal over. All of that is changing. I know that the 4:2 progression as we’ve taught it has evolved and matured and adapted to the times. There are things that we are out there saying to our clients that are not in the book, but they are fundamentally part of what we teach. So it was really time to get it updated.
BUILDER: How have prospective buyers changed how they approach the home buying decision in the past decade, and what does this mean from a sales perspective?
Shore: If you go back to a Psych 101 class, you’re going to learn that people make decisions according to the expected outcome. When I can depend on that expected outcome, it makes the decision much easier. When you think about the way great restaurants are so consistent in the way that they prepare their meals, you know you are going to get the same thing every time. It’s an easy decision to go there because you know what you can expect.
If you go back to 2018, 2019, you knew what you could expect as a buyer. You knew you could get a nice home, you knew you could get something new, you knew you could get it with really great interest rates. Everything spoke to clarity in that decision. In 2023, that clarity is a shell of what it used to be. As the buyer is finding far less assurance or clarity in what their future is going to look like, the pressure is on the builder to persuade them and show them why their home and their community is the right solution. You can’t do that if you don’t know the customer extremely well. If we move right into ‘Here’s my great home, here’s my great community, here’s our warranty, here’s our building materials, etc.,’ it doesn’t mean anything unless you connect it with the customer first and understand what their mission is.
BUILDER: What are the biggest lessons learned from a sales perspective since 2013?
Shore: I think there is one massive shift inside the industry, and that is that when it comes to the principles of lead conversion—that’s what 4:2 is all about—that is something you usually see a salesperson responsible for. If we’re being honest, if you look at 2020, 2021, and half of 2022, lead conversion was being accomplished by the market. People were calling builders and asking if they had a home for sale; if they did, they bought it. It was highly unusual behavior, the market was driving lead conversion. We went through this shift long enough for it to become a habit so we just expected people to buy. What do we do when suddenly customers aren’t just walking through the door and waving their checkbook and asking how to get to the front of the line. Now, we have to take ownership of lead conversion all over again, and I don’t believe we are well-positioned to do that right now.
BUILDER: How does the role of digital lead generation and technology change the role of the physical salesperson?
Shore: There has to be a more intentional congruence between all of the different aspects that we have for lead generation and lead conversion. We’re still a little fragmented in the industry, we’re a little siloed. That means that builders who aren’t doing this right, the approach is no longer seamless from the customer perspective, and it feels clunky. The best builders out there are anticipating what that customer journey is going to look and getting in front of that.
One way you see this is the elevated stature of the online salesperson who is the first face of that builder. This is not just an information clearinghouse, that’s not the role. There’s relationship building that has to take place. That trust that will eventually be transferred to the builder is going to begin online. We’ve got to get that part right first.
BUILDER: Does the increased access to information for customers online, coupled with the trend of the market doing part of the sales work, make it a challenging time to sell?
Shore: It’s really going to come down to what we are trying to do in the sales process. If we think that the sales process is showing you my shiny object, the internet can do that, augmented reality can do that, virtual reality can do that. That’s not going to be the point. What the internet can’t do is really get to the core of the emotion of what the customer is going through. We make decisions based on our gut.
According to Danish researcher Martin Lindstrom, about 85% of the decision is made out of our emotion, about 15% is made and supported by logic. If we’re flipping that as a salesperson and showing data, features, [and] information, then we are not getting to the core. Circling back to the 4:2 [Formula], it’s the opportunity to not only understand what the buyer is looking for but why they are moving at all. What is wrong with [the buyer’s] life that they think the right remedy is to pick up and move everything to another part of town or another state. That’s a pretty dramatic thing to do. There must be something significantly lacking. The internet is not a place where you can figure that out and then apply a solution accordingly. The internet is everything about what you’re moving to, great salespeople have to figure out what you’re coming from.
BUILDER: What is the value of the 10th anniversary edition of “The 4:2 Formula” in the current environment?
Shore: More than anything, the aim of the book and the process the book speaks of is to have a much deeper connection. Right now, there is a trust deficit between buyers and salespeople in general, and builders in particular. We’ve got to get over that hump and cure that trust deficit if we’re going to be able to build any sort of meaningful long-term relationship with the customer. That’s not something that appeared in the first version, it was there passively. Now, it’s much more active. What do we do to build such a deep trust connection that we have permission to help this customer do what they really want to do? I think that’s at the core of the mentality of today’s buyer.
People make decisions according to the expected outcome. Right now, there is a real lack of clarity. If we can figure out what their issues are today, then it not only helps us figure out what is the right home but [what] is the right future. I talk in “The 4:2 Formula” about finding the right life, and the home is such an important part of your life, and in this new edition we get into that topic.