In 2004, at the age of 39, Bob Moesta decided to apply his skillsets in sales, marketing and engineering to a local business where he could make an equity investment. He picked a small regional home builder based out of Detroit. Years later, in his 2020 book Demand Side Sales 101, he wrote: “I told them I would partner as an investor over time, but I wanted to spend a year learning about the business first. So, I became vice president of sales and marketing.”
At the time, this home builder competed with a large, national company that sold significantly more homes than them. Although Moesta was ostensibly VP of sales and marketing — a customer-facing function — he came from an engineering background, and as such had some ability to influence how the homes were designed (and therefore how much it cost to build them). But his immediate concern was to study the sales process at this company. He writes:
Right away, I was shocked! The sales process was based off the assumption that people who bought new, never looked at used. “Nobody who wants to buy new is looking at a used house ever?” I questioned. I knew this could not be accurate. Additionally, salespeople pitched the homes using the same, preplanned presentation for every prospect regardless of their circumstance. A customer could walk in the door, be briefly greeted, then given a presentation which consisted of a litany of features and benefits. Most people walked away and stopped listening after about three minutes.
“Well, let me tell you about Elk Trail. Elk Trail is a community of two hundred and thirty houses that’s 37% finished, and we’ve got fifteen houses that are up for sale, blah blah blah.”
They’d run through this presentation without asking any questions: Why are you moving? What’s going on in your life? And this was the standard approach across all new real estate sales; our large, national competitors had the same approach. It was in this setting where I met my longtime partner Greg [Engle], who had also recently joined me at this regional homebuilder.
“What the heck is going on here?” We both questioned.
Moesta and Engle started talking to the homeowners who had bought houses from the homebuilder. They would bring pizza, some soda, and a flip chart to these buyers’s homes and interview them. They would start by drawing a line down the centre of the chart: “This is today,” they would say, “And here is where you had the first thought of buying. Now tell us the story. How in the world did you get to the point where you bought this house?”
Most people didn’t remember, of course. But Moesta was good at conducting qualitative interviews. He and Engle employed various tricks to jog their memory. One of the most effective frames, they found, was saying something like “Imagine that we want to shoot a documentary about how you decided to buy this house.” Then they’d start from the move-in day, working backwards through the timeline until they got to the first thought. At each point, whenever they were held up, the men would probe for concrete details: “Was it winter? What was the weather like? What was your husband doing at the time? Who were you with?”
As they went along this interview process, they began to understand the thought processes that homeowners went through.
Moesta was curious to find out how effective the standard sales presentation was, and how much it impacted these buyers’s decisions. After a couple of interviews he learnt it mostly didn’t influence their purchase at all:
Only a third of our preplanned presentation nailed what they wanted. Another third confused them; they had no idea what we were talking about. And a third would play into their anxieties, pushing them away. “Do I really need all of that?” they’d wonder. So, while the presentation hit on everything imaginable with the intent to reach the broadest audience, overall it actually damaged our chances of selling a house.
So … what forces were at play? This was 2004, years before Moesta codified his experiences into a framework. Moesta was puzzled. If it wasn’t the features and benefits of their house that convinced these buyers to purchase, what was it that pushed these buyers over the edge? What, Moesta puzzled, finally caused them to say “Today’s the day I am going to buy a house?”
Moesta and Engle decided to remove their house from the solution set. After all, it wasn’t the house that caused the buying decision. So what did? They started discussing the purchase without talking about the house at all.
“Why did you move?”
“What was going on in your life?”
“What were you hoping to achieve by moving here?”
Each interview took about an hour. They’d talk about their struggling moment. We’d have them draw a picture of the timeline with no words. After ten interviews, we asked ourselves: “What do these stories have in common?” And we’d start to see a pattern. Three of the stories boiled down to a growing family that needed more space—babies, generations moving in together. They wanted help finding a home that would allow them to live together more harmoniously. Another five of the stories were about the opposite—downsizing. They’d tell us about getting older and wanting to travel. The kids had moved out, and they didn’t need the space anymore: “I don’t want to host the holidays,” they’d say. They wanted help figuring out how to downsize.
Those interview patterns showed very consistent forces at play — pushes, pulls, and anxieties. What were they worried about? What were they not worried about?
Moesta was beginning to see that these houses represented different ‘jobs’ for home buyers. He had to come up with separate sales and marketing approaches for each type of buyer. For retirees who were purchasing condos for downsizing, Bob and Greg began digging in further.
They eventually identified four forces affecting these ‘downsizers’:
The push of the situation: Moesta and Engle heard many reasons from these folks, naturally, but the list was not infinite. These folks were older. There was a fairly consistent list: the house was too big, the kids had moved out, the yard was too much work, the laundry room was in the basement, high taxes, and so on.
The pull of the new solution: These new condos were ideal for these buyers: it was one floor, two bedrooms, two-and-a-half baths, with first floor laundry. Folks in this situation would see the design, and feel drawn towards it. “What do you like about our condo” the men would ask, and unsurprisingly, the buyers would speak of the newness, the updated kitchen, the laundry placement. Often they would say that they wanted to travel more and liked the lack of seclusion — these condos were in a community development, so their belongings would be safer when they were away.
Anxiety of the new solution: But of course, as with all large purchases, these buyers also felt resistance to the idea of moving. These couples felt much anxiety around the move: they would have to sell their old house, contact movers, coordinate the logistics of such a move, update friends and family … plus they would need to pack up a lifetime’s worth of stuff.
The habit of the present: They were often happy with where they were currently living: they knew their neighbours, had friends and a community where they lived, they had their routine and knew where the grocery store was, their old house had plenty of happy memories. Moving would be a big shift.
And yet … all these buyers that Moesta and Engle were interviewing had overcome the forces blocking change. The men began to see that a successful purchase involved more than just the ‘magnetism of a new condo’. Reflecting on this episode, Moesta writes: ”We could build the best condo in the world, but if the push and the pull are not greater than the anxiety and the habit, they’re not going to move. In business school we are taught to add more features and benefits, which would create more magnetism, pushing people to buy our product. It’s not true! We’ve got to reduce their anxiety.”
Moesta and Engle began categorising these positive and negative motivations into three large categories: functional, emotional, and social, and began modifying processes to resolve buyer anxieties in each category.
Functional motivation: Our interviews had established that many of our buyers were downsizing. They had a 3,000 square-foot home and were moving into a 1,600 square-foot condo. They had a lifetime of belongings that they needed to sort through. What stayed and what went? It was a daunting task. Many talked about the challenge of sorting through and packing up their entire life. Wrapped into their home purchase was a plethora of fears and anxieties. They’d get stuck and consider not buying.
Our solution: We raised the price of our condos, built a storage facility across the street, and hired movers to pack their belongings, label their boxes, and move them. We included this service as part of our package. Additionally, we built a clubhouse with a sorting room inside our storage facility. Now when their kids visited, they could all walk across the street, and sort through their lifetime of belongings together at a casual, leisurely pace.
This decision increased sales by 22%. In other words, they had increased sales by raising prices — but also by solving a functional problem, lowering the anxiety of a move. Meanwhile, Moesta observed: ”Our competition down the street offered five thousand dollars off and free granite. Did [these customers] even want granite? Most buyers could read through this gimmick and understood they just jacked-up their prices.”
The emotional anxiety associated with the move was trickier to tackle.
At first, many buyers said that they began thinking about moving during the holiday season. This made sense: as one prepares a Thanksgiving dinner (for 20 people, heh), or set up Christmas or Hanukkah decorations, it’s not difficult to think “no more hosting, please, this is too much work — let’s just go visit our kids and take it easy during the holidays.”
And so they would tell Moesta and Engle: “We want only a kitchen bar — no need for a large dining table, please. Just a small kitchen table with three or four seats. Also, a second bedroom with a suite for visitors would be nice.”
And yet … the holiday season would come and pass, and buyers would not budge along the buyer’s journey. Moesta and Engle dug in further. If the holiday season wasn’t the trigger event, what was going on?
They began hearing repeated references to the dining room table. This was odd:
“Well, my niece Sarah might take the dining room table, then we could move,” we heard in one interview. At first, we thought nothing of it. But then it happened again. “My cousin Mac took the dining room table and then we moved.” We heard it once, twice, by the end we heard it ten times.
“What’s going on with the dining room table?” Greg and I wondered.
Despite everything they said about not hosting the holidays, they were torn. We realized that the dining room table turned out to be the emotional bank account of their lives. They could not just put it in the basement, or into storage; it wasn’t going to Goodwill or any old stranger. If they did not know what was going to happen to the dining room table, they were not going to move. So, as much as they told us they wanted a second bedroom with a large suite, it’s not what really mattered. Emotionally, they could not move without sorting out the dining room table.
The solution: Moesta went against what the customers told them. They reduced the second bedroom, gave it a shared bathroom, and then added a small room for the dining room table. Moesta writes (all emphasis added): ”We realised that if they did not have a place for the dining room table, they were not going to move. The table represented every birthday, holiday, and special event from their past. It was all tied up emotionally in that table. The moment we added a small room for the table — not functional for hosting anything — sales jumped 27 percent.”
Finally, the social motivation for this group was obvious to Moesta and Engle: the downsizers were typically 55-years-old and above, and they didn’t want the chaos of a typical subdivision. They were motivated — socially — to live near other people in a similar circumstance. This contrasted with the other group of buyers: younger families who wanted to trade up to a larger place, who were motivated by being closer to a better school district, near a certain church, etc.
These various motivations were important to know, because they could be highlighted or reinforced in various sales and marketing materials.
Over the course of their interviews with these downsizers, Moesta and Engle slowly unearthed something more interesting: they learnt that the trigger event for active looking was actually quite influenceable.
As mentioned earlier, the First Thought for many of these buyers was the holiday season. “I told my husband, we should think about moving next year,” said one buyer. “We’re doing too much. The kids moved out. We should pass the torch to our children.” Moesta writes, more than a decade later:
But the holidays came and went. They no longer were having the conversation actively, but because of that first thought, they were now noticing things that they otherwise might not pay attention to — passive looking. “The house down the street went up for sale,” they would tell us. “Once we saw that we just up and got a real estate agent.”
Remember, nothing is random. So, we wanted to know what the heck happened that made them reach out to a real estate agent? There’s no doubt that an event in their lives pushed them from passive looking to active looking. Hiring a real estate agent is active looking. What was it? This is where we would stop and say, “Hold on a second, tell us a little bit more about the agent.”
“Oh, we’ve known her for years. Her name is Sally. She’s been a good friend of the family, blah, blah, blah.”
“So, when did you sign up?” we’d ask.
“I don’t know, February maybe.”
“Was it the middle of February, end of February?” we’d question.
“It was the middle of February.”
“Near Valentine’s Day?”
“No, it was after Valentine’s Day.”
“All right,” we’d say. “Was it during the week or on the weekend?”
“Oh, it was during the week.”
“Now, this seems a little strange, but pretend we are shooting a documentary. Sally comes over, right? Did you call Sally? Did Sally call you?”
“Oh, we called Sally.”
A favorite technique we use to jog people’s memories is to get into the minutia of their life to trigger bigger memories.
“What were you wearing when you signed the documents, and where were you?” we questioned.
“Now I remember! It was a Thursday,” and the flood gates opened. “We had just come from a funeral. Our friend Jim passed away. We realized his poor wife would have to move their entire house alone. If we don’t move now, one of us is going to have to move without the other, and neither of us wants that to happen. On our way to the funeral parlor, we decided to call Sally.”
And then the kicker:
We heard this story once, twice, ten times. So, we decided to run a test. We moved our advertising from the real estate section to the obituaries. And seemingly overnight, we got a 37 percent increase in traffic and because ad space is cheaper in the obituaries, a 70 percent reduction in costs. The leads were unbelievable. The close rate on those leads was unbelievable because they were already in active looking (emphasis added).
Years later, Moesta reflected on the implications of this — far superior — approach:
When Greg and I first came into our roles at the regional home builder based in Detroit, salespeople viewed everyone who walked through the door as a prospect. They had a preplanned presentation that talked about our features and benefits at a very high level. It’s sales from a product perspective — supply-side sales. As a rule, preplanned presentations tend to get bigger and bigger over time and less and less relevant. But once we understood the buyer’s timeline and developed questions and answers specific to their position on the time-line, we only needed two minutes instead of twenty:
“How long have you been looking?”
“Is your house up for sale?”
“How’s your life going to be better by moving?”
Once we saw the world through the buyer’s eyes, we were dramatically more efficient. We could employ just one salesperson per homesite, because we didn’t have to talk for twenty minutes about every feature and benefits. Once we knew where they were on the timeline, we could figure out what we had to do to help move them along the timeline. The goal was not to get buyers to jump from the first phase to the fifth. It’s not possible! Knowing the customer’s stage on the timeline allowed us to talk to them and help them move forward at their pace.
If we pushed too hard at the beginning, we would have turned them off and even scared them away by feeding into their anxieties. Instead, we met them where they were on the timeline. If their house was not up for sale yet, we’d tell them to go online, fill out a survey, and we’d help them get it listed. If they were unsure how much they could afford, we’d look at their debt and give them the answers. Let’s build a solution together and help you frame out your options.
How many people want to move but can’t figure out the details? If we could help solve their roadblocks and move them through the phases of buying, we were much more likely to sell. We didn’t create more things, we took care of their anxieties, which increased the pushes. We recognised that we were not just builders, we were movers! The more we could help people move, the better off we were.
When Moesta and Engle started at the regional home builder, there were seven homesites and one hundred houses sold annually. After switching the company to a demand-first sales approach, the business doubled to fourteen homesites, and tripled to three hundred homes sold annually.
Bob and Greg later co-founded the ReWired Group, which consulted for hundreds of companies. Many years later, Moesta — along with Karen Dillon, David Duncan, and Taddy Hall, influenced legendary Harvard Business School professor Clayton Christensen, leading to what is now known as the ‘Jobs-to-be-Done’ framework. This experience with the homebuilder was one of its origins.
Sources
Demand-Side Sales 101, by Bob Moesta and Greg Engle
https://therewiredgroup.com/learn/complete-guide-jobs-to-be-done/