“Grande Mocha Frappuccino, please.”

I cringe a little every time I hear myself say that.   Not so much because the drink I just ordered is loaded with caffeine and calories (both of which I’m trying to cut down on), but rather because I know that Starbucks has played me like a violin yet again.

But it’s all good.  I pull out my wallet, fork over $4.53 (with tax), and walk away with a sip and a smile on my face.  Why the smile?  After all, I just exchanged more than four and a half bucks for a product that couldn’t have cost more than 20¢ to produce—including the plastic cup and straw.

Well… the reason I get a kick out of succumbing to their marketing genius is that for years I’ve been using the exact same tactics to help make my real estate offers look more appealing to potential sellers.

You see, despite how different Starbucks might seem from what you and I do, our marketing challenges are really quite similar.  How?  Well, as coffee baristas, Starbucks wants people to pay about 2,000 percent more for a product than the cost of its ingredients; and as real estate entrepreneurs, you and I want people to gladly accept offers that are at really low wholesale prices, or on really long wholesale terms.

In other words, we all (Starbucks, you, and I) have to find a way to make our professional offerings look reasonable—even desirable—when they might otherwise appear at first glance to border on the ridiculous.

Surprisingly, there’s a simple two-step formula that can do exactly that.  And although nothing can guarantee success in every real estate negotiation, combining these two steps into one process can greatly improve our odds of getting a deal done.

Here are the two steps:

Step #1. — Shift the Context of the Offer:

To greatly enhance the appeal of our offers, the first thing we have to do is shift the context of how they’re presented.

For Starbucks, this meant shifting the context of their product away from just “coffee”, because it’s no secret that coffee is a relatively dirt-cheap commodity with a very low price anchor in the minds of consumers. After all, they can buy it at any gas station for 99¢, brew it for pennies at home, or get it free in the break room at work.  So Starbucks had to remove this low price “coffee” barrier by selling a line of European-style beverages instead; like cappuccinos (which is just coffee and milk), lattes (also just coffee and milk), and macchiatos (again: just coffee and milk). This context shift not only removed the low-priced perception of “coffee only”, it also created the perfect upscale environment in which to sell their own exotic-sounding concoction, the Frappuccino—which is basically just coffee and ice (*snicker*).

Did this particular context shift work for Starbucks?  I’ll let you answer that one.

In our world as real estate entrepreneurs, the context shifting is a little different… but just as important.  And the actual shift we need to make will depend on what we’re trying to accomplish at the moment.

For instance, when we’re making very low wholesale offers, we don’t want our sellers dwelling on the low price.  One way to shift the context away from price would be to frame our wholesale offers as beneficial buying programs, which is as easy as giving them a product name; such as our “10 Day ‘As Is’ Cash-out Program”, or our “No-Wait Cash for Keys Program“, or something similar. Branding your cash offers as a product line helps to proactively reinforce the speed and convenience benefits of an all-cash, as-is, fast-closing sale, thus beginning the process of conditioning the seller to focus on the benefits they’d receive, rather than on the low price of the offer.

Now by contrast, when we’re making long-term offers (like 5 to 7 year lease-purchase, land contract, or subject to deals, etc.), we need to shift the context away from the lengthy period. Instead, we need to direct the seller’s attention over to the higher prices they can get, as well as the relief they’ll be receiving from their monthly mortgage payments.  Again, we can do this effectively by branding our term offers as “programs”, giving them names like our “Fair Price Debt Relief Program“, or something along those lines.

Of course as you may have already guessed, just shifting the context is not going to be enough to get most sellers excited—especially when it comes to our really low wholesale offers (the obvious exception being lender-owned and short sale properties where fast cash is king).  The majority of private sellers will still need a bit more nudging before they’ll consider letting you or I buy their properties at really low wholesale prices, or on on really long wholesale terms.

So we’ll have to do exactly what Starbucks did, and couple our context shift with yet another powerful marketing approach; one that is so effective it convinced an entire generation of Americans that it can actually be considered normal to pay $4 to $5 for some cheap coffee, blended with crushed ice (which is water, for crying out loud) and a dollop of whipped cream.

In Part II of this article, we’ll explore what this second marketing strategy is, and also why it is so effective at manipulating consumer perception.  I’ll also show you how you can adapt this strategy to real estate, so that you you can improve the desirability and profitability of your offers.