Insight

Tips on Business Development

from Psychologist Robert Cialdini’s “Influence”

Reciprocation

  • Send nice cards year after year
  • Provide food and drinks before asking favour & negotiations
  • Send referrals, information, leads and articles in advance and as often
  • Provide reasons: “because”

Hold open a door and you receive a “thank you” and a smile. Send a birthday present to a friend and you are almost certain to get one in return. Pay for a co-worker’s coffee and she will pick up the next one. The power of reciprocation relies on several conventions. The request must be “in-kind,” which is to say, commensurate with the initial offering.

The power is increased if the give-and-take happens in a short time frame. Reciprocity’s influence increases with closer relationships too. It is much harder to resist or refuse to reciprocate a favour to a friend who is down the street than to an anonymous site on the web.

Commitment & Consistency

  • Charge nominal fees for seminars
  • Apply work/valuation/marketing fee credited towards sales commission
  • Confidentiality Agreement
  • Letter of intent and rationale for the price offered
  • KYC (Know Your Client) Form Signing

As humans, we have an insatiable desire for consistency in our behavior. It is why we abhor hypocrisy and embrace leaders, politicians, and beliefs that “stick to their guns,” sometimes to the point of foolishness. This consistency can be observed through the effectiveness of political tactics like push polling, wherein a paid “surveyor” will call numbers and ask voters whether they would cast a ballot for “a man who refused to say the pledge of allegiance,” thus getting a response and commitment verbally that will transfer into votes come election day after the follow-on ad campaign alludes to precisely that inaction from an opposition candidate.

Social Proof

  • Endorsements and referrals by high profile advisors (lawyers/accountants), clients (stars/wealthy/famous), listings (lots of stores/signs in the same area) & alliances (Apple/Samsung/GE/Honda)

If you are walking along a street and see a crowd gathered around watching something, it is nearly impossible to resist the urge to go over and investigate yourself. If you are at a party and everyone is drinking, the pressure to have a drink yourself rises dramatically. We all hate the horrifyingly over-the-top laugh tracks on TV sitcoms, but TV producers know that the social signal of laughter makes us laugh along, too.

This same phenomenon applies when we judge exceptionally important life decisions – who should we date or marry, where should we go to school, where should we work. The influence of our peers is a powerful influencer and one that cannot be overlooked in the sphere of marketing.

Social proof becomes more powerful when the numbers increase and when the action-takers become more relevant and, especially more like the target. In other words, if you are selling games to rebelling teenagers, do not show testimonials from middle-aged parents who loved it, show other teens.

Liking (Trust & Comfort)

  • Dress Appropriately; Suits/Dress & Grooming
  • Match & Connect: Hometown, Culture, Schools, Sports, Family, Children & Hobbies
  • Smile & Show interest in their interests

We have heard the phrase a thousand times – “People do business with people they know, like and trust.” It turns out, there is quite a bit of science to support this. Research confirms that things like physical attractiveness (we like good-looking people), familiarity (we trust people we know), similarity (we like people like us) and compliments (we like people who say nice things about us) all factor into the principle of “liking.”

Authority

  • Professional Suit, Luxury Car, Prestige Office, Classy Card, Gold Pen, Professional Web Site
  • Experts opinion = must be true or good
  • Schools, degrees, designations & memberships
  • Articles in major newspapers, magazines, and journals

The power of authority can come from a variety of sources – clothes (think of the movie “Catch Me if You Can” in which Leonardo DiCaprio becomes a doctor or pilot simply through attire), titles and prefix/suffixes (Dr., Senator, President, C-level executive), and context in which ordinary people commit horrifying acts simply because they are told to do so).

Authority only influences when the target believes in the power and authenticity of that authority. The stronger the authority association, the more powerful the impact, but not all authorities work on all people.

Scarcity

  • Auction
  • Showings properties at same time to several prospects
  • Line-ups at restaurants and clubs
  • Limited production of toys and luxury goods

Ever notice that some shops seem to be perpetually running “going out of business” sales? It is no mistake – the power of potential loss is a remarkable influencer. The Rolling Stones’ “last ever” tour.

The feeling of being in competition for scarce resources has powerful motivating properties. For example, a realtor who is trying to sell a house to a “fence-sitting” prospect sometimes will call the prospect with news of another potential buyer who has seen the house, liked it, and is scheduled to return the following day to talk about terms. When wholly fabricated, the new bidder is commonly described as an outsider with plenty of money: “an out-of-state investor buying for tax purposes” and “a physician and his wife moving into town” are favorites. The tactic, called in some circles “goosing them off the fence,” can work devastatingly well. The thought of losing out to a rival frequently turns a buyer from hesitant to zealous.

Scarcity becomes more powerful when the resource is finite

(houses are great for this reason) and when immediacy is added to the scarcity (as in the case of another buyer on the horizon).

Contrast

  • Show bad first and then good
  • Sell expensive first then cheaper but higher margin products
  • Deliver bad news first then real news
  • Make ridiculous offer then concede little at a time
  • Tell the “bad” part of the business first to gain trust then tell the good parts
  • Ask larger request then work down

Instant Influence: Primitive Consent

  • Expensive means good – high fee / jewelry
  • Upscale office & car
  • Reliability & Trust look – Visible Signals like armoured trucks or bank entrance pillars