The Knowledge Project with Shane Parrish - #122 Robert Cialdini - The Principles of Persuasion

Episode Date: October 19, 2021

What are the best strategies to get people to say “Yes” to your requests in life? Acclaimed psychologist Robert Cialdini dives deep into the seven small things that make a huge impact in influencing others, as well as the difference between being influenced and being manipulated into making decisions. What are the tactics, how do they work, and how do we defend against them? This episode is jam-packed with practical advice that will make you more persuasive in life.   Known colloquially as “The Godfather of Influence,” Cialdini is a foundational expert in the science of influence and how to apply it ethically in business. His books, including Influence: Psychology of Persuasion and Pre-Suasion, have sold more than 7 million copies in 44 different languages, and he is the Regents’ Professor Emeritus of Psychology and Marketing at Arizona State University.    -- Go Premium and get the full episode. Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/   Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish Learn more about your ad choices. Visit megaphone.fm/adchoices

Joe Gerard, he was the world's greatest salesperson, according to the Guinness Book of Records. He sold automobiles, Chevroletes. For everybody who ever bought a car from him, every month they would receive a greeting card for him, depending on the holiday that month, said one thing inside card. I like you, Joe Gerard. for Joe Gerard he said that was important it's not just that we like people who are like us we like people who do like us and say so welcome to the knowledge project podcast welcome to the knowledge project podcast

I'm your host, Shane Parrish. This podcast sharpens your mind by helping you master the best of what other people have already figured out. If you're listening to this, you're missing it. If you'd like special member-only episodes, access before anyone else, complete episodes, transcripts,

and other member-only content, you can join at fs.blog slash tribe. Check out the show notes for a link. Robert Caldini is here today, and man, I've been looking forward to this conversation for a long time. Bob is the regent's professor of psychology and marketing at Arizona State University. He's also the author of the most influential book on the science and psychology of persuasion.

Today is all about some of the ways our minds go into automatic mode. We exist in an extraordinarily complicated environment, and to deal with that, we use shortcuts. We can't be expected to analyze everything. We don't have the time, energy, or mental capacity. So instead, we use these shortcuts and rules of thumb, these heuristics, to classify, things and respond without thinking. These mental shortcuts are called judgment heuristics and allow for simplified thinking. They work most of the time, but they also leave us open to costly mistakes.

Today, in this conversation, we're going to deep dive into the seven small things that make a huge difference in influencing others and being influenced ourselves. We talk about what they are, why they work, when they operate best, and how to defend against them in the context of an online and offline world. When I asked Bob what we should title this episode, he said the small big, the exploration of the smallest things that you can do to make the biggest impact. And man, he wasn't kidding. This conversation is jam-packed with practical advice that will make you more persuasive and less susceptible to manipulation. It's time to listen and learn.

Before we dive into the seven factors that make us more persuasive, Can you explain the difference between influence and manipulation? Yeah, and I think it has to do with those seven factors. Those are the things that lend themselves to assent because they normally counsel people correctly to move in a particular direction. So, for example, one of them is authority. If the experts are saying that something is a good idea, then we're probably well advised to follow the authority. influence. If a lot of people like us are moving in that direction, there's a trend for it, that probably also lets us know that that's a shortcut to making a good decision. So there are

these seven such principles. And for me, influence involves pointing to them where they naturally exist. That is, informing people into assent by simply raising the profile of that principle in one way or another in your communication. Manipulation involves the fabrication or manufacture of those principles, the counterfeiting of them, in a situation where somebody lies with statistics in order to get you to believe that a lot of people are doing this or believing this thing that you want them to, or presenting someone as an authority on the topic who's not truly an authority is a celebrity or something like that. That's not an authority. That's something else. And so it's when you recognize that

those particular levers of influence are effective and co-op them to your behalf, rather than simply uncovering them for the audience member, which I think is not just ethical, I think it's commendable to provide that kind of information to people, that kind of education to people. That's a great opening to the conversation. Let's dive into the principles and start with reciprocation. The first principle I talk about is very an early one in the socialization process. In all human societies, we are to. trained to live by a particular rule, the rule of reciprocation that says, we are obligated to

give back to others who have first given to us. That's the way that the society best functions and allows people the freedom to give first with the knowledge that they're not giving something away. I mean, for the first time in evolutionary history, all these species, Besides us, never had the concept of future obligation to return what has been provided to them. But when we have that rule in place, it allows us the freedom to give resources, attention, care, and so on, to others with the recognition we're not losing it. that person is obligated to give back to us when we need something. It's a fair exchange. It's a great system.

So we give first. And I love a new study that was done, not even published yet, was done in McDonald's, actually in the countries of Colombia and Brazil, where researchers, in fact, my colleague, Steve Martin, who runs our office in UK. and was commissioned to do this study in South America, did a study where, for a week, every family that came into the McDonald's locations, the children got a balloon from the McDonald's management. Half of them got the balloon as the family was leaving as a nice thank you for coming into McDonald's and purchasing food. The other half, each kid got the balloon

as they entered. Those families bought 25% more food because they had been given something first. First is the key. First means it's not the usual behavioral model that we use in business, which says, if you buy my product, if you sign my contract, I promise I will give to you the very best service or merits of the offer that I can provide. That means the customer has to go first. This is saying something else. We have to go first. We give value in some way.

Easily, the way to do it that's least costly is to give information to people about things that will improve their outcomes. in any given situation, white papers, tips about the top three things to do to improve their outcomes and something. Not based on our product or service, if it's designed to tell them how to buy us or why they should buy, then it's seen as a device, not a gift. If we do that, people are now readied to give back to us. So the rule for reciprocation. That's the first. I have a friend who summarizes this as go positive, go first. Go positive, go first.

That's right. So why is it we don't do more of that? I think people are afraid. They don't recognize the power of this rule. And they're afraid that by going first and giving resources, giving time, giving attention, giving samples, and so on, people might, they might just be losing that. They're not cognizant of the fact that there's such a

strong rule in every human culture that says you're not, you must not take without giving in return. They really don't register the power of that rule, but it is formidable. And there's different types of things that we can give. Gifts come to mind, maybe concessions in a negotiation. What are the other types that we can think of when reciprocation is at play? So, for example, you're right about concessions. There's research this show. if we walk up to people and say, listen, would you be a long-term blood donor and give a unit of blood every six weeks for the next two years? A very large request, right? Starting off, everybody said, no, I don't even know or I'll be in two years. I can't make that. And we said, oh, well, then would you give

one unit tomorrow during the local blood drive in your neighborhood? We go from 33% of people who agree to give the next day, right? If that's the only thing we ask them to 55%, if we retreat to that, we make a concession. Oh, so you can't do the two-year thing that we would most like, but would you do this one thing? So now we go from 33% to 55% compliance. And by the way, we staff the blood services organization. We have observers there. They show up. It's not just that they say, no, oh, yeah, sure, I'll do that because they want to get us away. No, they show up. Well, that goes to commitment and consistency, which we'll talk about a bit later. But is there a contrast at play there too? Because now you've taken it from a large commitment to a much smaller

commitment, which feels more manageable? That's a very perceptive point. There's not only is there the effect of making concession that needs to be reciprocated. Oh, you made a concession to me. I'll make a concession in return. It's that you've made a contrast between the larger favor, two years every six weeks, to just once. And this one now seems smaller. So we tested for that in the study, and we found that if we include the contrast in our presentation, you can go anywhere from giving six months for two years every six weeks, for two years, or you could just give tomorrow. That doesn't produce the effect to the same

degree. You have to get them to say no so you can retreat and then spur a retreat in return. Sure. Look, if somebody gives you a gift or maybe does you a favor, is there a balance in the sense of obligation that we feel we need to repay? Or is there like almost an interest, a mental interest that we ascribe to returning that favor. So we have to do more. No, we are obligated to give back at the same level. But if the only thing we can do is to give back at a higher level, we will to avoid the burden of feeling like a cheater, like a free rider, like a taker, an ingrate. So if somebody buys us lunch, so we say, okay, next time it's on me, right?

But between that time, if this person says, I'm in a bind, can you drive over to where I am and jump my battery for me? Right. We have to say yes, because this person just did us a favor. while we're in that state of obligation, we will go even higher, although most of the time we can cancel the obligation simply by giving what they gave us a nice lunch. Is there a time span associated with this? Like after a couple of weeks, does it wear off? Or is it more potent at the start? Or how do we think about that? There is a time frame associated with this. People are more willing to say yes to a request for something in return, the closer to the favor we've provided.

However, when they have given us very large favors, those things stay in our consciousness, and years later, we will be willing to give back to them. Those big, memorable favors stay solid. But the smaller ones, they tend to fade away over time. Are there sort of ideal operating conditions like when this works even better? That's one of them, certainly that proximate to the cause. But also when what we have given to them is tailored to their needs, their preferences their current challenges. Under those circumstances, we now have a more muscular version of the sense of obligation. I'll give you an example again. We can do it at a fast food restaurant. Researchers did a study. People came in and one third of them just went to the counter and ordered

their food. Another third of them came in and were given a very attractive key ring with a beautiful medallion on it by the management. Oh, thank you for coming to McDonald's. Here's a gift for you. They then bought 12% more food. There was a third group. They came in and they were given a small cup of yogurt as a thank you, right, for coming in. Now, any economist would say they were fools to do that because now people don't need to buy as much food, right? They bought 24% more food because why do you go to a restaurant? Because you're hungry. If you give people something they need that's high in their goal hierarchy, they're going to be most willing to give back to you at a higher level.

Sure, that makes a lot of sense. One of the examples from your book that I really liked, maybe you can illuminate this for us, was the Cuban Missile Crisis. Yes. You tell us about that? You weren't alive, John, during the Cuban Missile Crisis.

It occurred in the early 1960s when the President of the United States was then John Kennedy and the leader of the Soviet Union was Khrushchev. It was determined by U.S. intelligence that Russian ships had brought to Cuba ICBM missiles. Nuclear had missiles that were installed and pointed at the United States 90 miles away. What Kennedy did was to demand that Khrushchev removed those missiles,

and there were Russian ships steaming for Cuba at the time that were carrying more. and Kennedy said, we're going to blockade those ships. And Cruz just said, that's an act of war. If you do that, you're going to set off a war, not any war. A nuclear war between the two greatest nuclear powers at the time that was estimated to kill a third of humanity. And during that time, the two leaders were locked in this stare-off contest. and both of them were adamant about their positions.

And finally, because Kennedy was so adamant and strong-willed and resolute in this, Khrushchev blinked and he removed his missiles. That was the story that we all heard in the history books and that I learned about when I was alive at the time. It turns out it wasn't true. It turns out that there was a secret. deal that was made between Kennedy and Khrushchev, it was a reciprocal concessions deal. Kennedy said, if you will remove your missiles from Cuba, we'll remove ours from Turkey

that are pointed at you. But don't tell anybody about it. Because politically, if I was seen as compromising with yielding in any way to our natural enemy at that time, our global enemy at that time, it would ruin my political aspirations for re-election. So Khrushchev promised, yes, okay, I won't say anything. It wasn't until recently that this information was revealed at the Kennedy Library, after it was embargoed for all those years, it finally came up, and scholars have said, no, it wasn't this hard line that won the day. The hard line was the thing that risked the world. The thing that saved the world was reciprocal concession. And it got buried. It's regrettable because the image that a lot of world leaders got from this,

never compromise. Never give in. Just be strong. And you, if you are strong, strong enough you will win. It was exactly the wrong thing. That's not what happened at all. It was the rule for reciprocation that won the day. I love that example. And the power of this particular effect is undeniable. Not everybody has great intent. How do we defend ourselves against this? Yes. I think what we have to do is recognize that we can't just in a blanket kind way, reject the gifts and favors and services that may be very well-intentioned for us, right, by people who would like to, you know, increase our outcomes in a particular situation. What we have to do is recognize that when those people do that and then use that as a

lever to get something much larger from us, we have to read. reframe what they gave us as no longer a gift to be reciprocated, but a trick, a device, an artifice designed to get our compliance with a much larger request where they will come out much far ahead in the bargain. We have to make that little change. And then here's where the rule for reciprocity comes in. Because I studied a group that would get people to make appointments with them to check out their fire safety issues at home, right? And somebody would come in and give them a home fire extinguisher and then would give them a bunch of reasons to buy a particular kind of very expensive heat-activated fire alarm

system that they were representing, right? So they weren't really there to give them. us the information about fire safety. They were there to sell this outrageously overpriced system. And what I say to people in this situation is, look, as soon as you see that the game was, don't treat the fire alarms, the fire extinguisher that you got as a gift. Treat it as a trick. And if that's the case, show them the door. and keep the fire extinguisher, because by the rule of reciprocation, exploitors should be exploited. Yeah, it works both ways, right? The second principle in your book is liking, which is we prefer to say yes to people that we like.

What are sort of the main variables that carry a lot of the weight to whether we like somebody or not? There are really two major variables that we can influence. One is similarity. We like people who are like us. So one thing we can do is to point to commonalities that genuinely exist. If we point to a genuine comparability that exists between us and the other individual, that person feels a greater rapport with us. Oh, you're a runner? I'm a runner. You're an only child? I'm an only child. Okay, now there's a bond between us, and those people will feel more poor with us and want to do

business with us, if those are genuinely there. So, for example, there was one study that was done between negotiators who were bargaining over email. And, you know, email is the most bloodless communication device we have ever devised. And as a result, they were stymied in their negotiations, deadlocked so that in 30 percent of the instances, both sides walked away with nothing. The other half were told, before you begin the negotiation, by email, send some information about yourself to the other negotiator, your negotiating partner, what your hobbies are, what your interests are, where you grew up, where you went to school, what your major was in college, you know, these kinds of things. In that case,

stymied negotiations went from 30% to 6%. When the researchers analyze the data, it wasn't the amount of personalizing information that had been sent across. It was how many commonalities were in those accounts. If there were a lot of commonalities, similarities, they got the most concessions. The key was the parallels. The implication is clear for us. we now have a tool that we never had before the internet that allows us to know some things about the people that we are going to interact with and hoping to influence in our direction. It's not proprietary information. People give us that information on social media, LinkedIn, and so on.

We can find that. And where we find genuine commonalities, we can just raise those. to the surface before we begin. I have the same question for all of them, but are their ideal operating conditions or set of circumstances when this works even better for liking principle? It does when we have had some kind of situation

in which we've been excluded from an interaction or we felt our feelings were hurt by somebody, a friend or something, then we're really looking for. People are really looking for that connection, that friendship association. That can be the case as well. I want to again talk about how to defend against that. But before we get there, my favorite example from the book, I think was Joe Gerard. Can you tell us about him and how he used this? Yeah. Joe Gerard, he was the world's greatest salesperson, according to the Guinness Book of Records, for like 12 years in a row. He sold automobiles, Chevroletes, from a dealership in Detroit, in the Detroit area.

He sold an average of six cars and trucks a day, every day that he worked. How did he do it? Well, one of the things that he says that he did that was, so important is for everybody who ever bought a car from him, every month they would receive a greeting card for him, depending on the holiday that month. Happy New Year, you know, whatever it was, 4th of July, whatever the month was. And then you opened it up and it said one thing inside card. I like you, Joe Gerard. Now, that man use the liking principle. We like people who like us.

The second thing that we can use besides similarity is genuine compliments that people give us. Praise, right, that we give to others. And if we do that honestly, and Joe was a people person, he liked everybody. So he wasn't lying by saying, I like you. just having that message you would think 12 times a year every year automatically this thing comes no for joe gerard he said that was important to let people know that i liked him so it's not just that we like people who are like us we like people who do like us and say so how do we defend against this how do we go about neutralizing the effect of liking somebody

Suppose you're in a car showroom, not Joe Girard's, but you're going to buy a new car. Here's what the most effective salespeople have been taught to do before they ever show you the car. They're going to give you something. They're going to give you a bottle of mineral water. They're going to give you a cup of coffee or tea or a soft drink. They're going to compliment you on your decision to come in. at this time of them, maybe even compliment you on your choices of colors, schemes, and accessories associated with the car. They're going to tell you, here we are in Minnesota and

were you born in Minnesota? Well, yes, I was. Me too. Well, I'm born in Minnesota, but my wife is from Texas. My wife is from Texas. They'll claim these similarities, right? And you will find yourself liking that salesperson more than is warranted by an interaction with somebody for 30 minutes. You find yourself liking somebody inordinately step back from the situation and say, wait a minute, what has that person been doing that would cause me to like him or her? Oh yeah, they gave me that coke. They complimented me. They told me that they live in the same. They're from the same area as me.

They're similar to me, right? And then you have to separate the salesperson from the car. Yeah. Because you have to recognize, I'm going to be driving that Toyota off the lot, not the salesperson. It doesn't matter how much I like the salesperson. I can't be driving the car. So you have to make. your choice based on the favorable features of the deal, not of the person who's offering you

the deal. I like that. Moving on to social proof, which is the third principle in the book, why is popularity so effective? I saw a quote about popularity and how people are using popularity on internet and in various ways. and this particular humorist said, popularity is all the rage these days. Here's the point.

Popularity, that is a version of social proof, which says one way we can reduce our uncertainty of what we should do in a situation. When we're uncertain, we don't look inside ourselves for the answer. All we see is the lack of confidence. So we look outside. And one place we look is to what the people around us, like us, have been doing or are

currently doing in a particular situation. Are we getting a lot of people going to this new restaurant, buying this new piece of software? If so, that is a shortcut I can use to reduce my uncertainty about the fact that that will probably be a good choice for me. If a lot of people are doing it and are rating it positively with those star ratings and so on. That's a way I can reduce my uncertainty because they've already beta tested this thing for me. That's why it's so popular to choose popularity as a indicator of a good choice. There was a study done in Beijing, China that I love. It shows you the cross-cultural reach of this. So in Beijing, we're Researchers arranged with the managers of a string of restaurants to put a little asterisk

on certain items of the menu that people got when they were to order. Those items that got the asterick then became purchased 13 to 20 percent more frequently. So what did the asterisk represent? It wasn't what we normally see when there are little asterisks next to items on menu like this is a specialty of the house or this is what our chef recommends for this evening the asterisk said if you go down and read what it stood for this is one of our most popular items and each one became 13 to 20 percent more popular for its popularity yeah now you have to read the footnotes on this study that was published on this research to see one more little

feature of all of this that helps explain or answer your question, why is popularity so valuable for us? And it is, if you look at the various demographic groups that came into the restaurant, males, females, young people, older people, business people, neighbor. Neighbor, neighborhood patrons and so on. They all were influenced by the yasterick. But there was one group that was far more influenced than anyone else, first time visitors, the ones who were most uncertain. They could look to the choices of others in that restaurant to reduce their uncertainty about what to buy. Sure.

I think that that's a really good point, right? So uncertainty makes us more vulnerable to it. I think there's a couple other nuances to this that I find really interesting. One is feasibility, right? So if we see other people doing something, we feel like we can do it too, especially I would imagine if we identify as part of that tribe or that person is similar to us. In fact, I once worked for a company as the chief scientist that sent messages to the customers of local power companies about how much energy they were using

relative to their comparable neighbors. Neighbors who had similar sized homes, similar air conditioning and heating units and so on. That information caused those people who were using more energy than their neighbors to dramatically reduce their energy. And I think one reason is what you said. It's that, well, if my neighbors like me can do it, that means I can do it. It means it's feasible. And I can tell you something that is remarkable about this company. It was called O power. It's since been purchased by Oracle. As a result of this, O power, is responsible for 30 billion pounds of carbon dioxide that have not been released into the environment because people have reduced their energy conservation by just knowing what

their comparable neighbors are doing and saying, well, then I can do that. It can be a very effective tool for good. It can also be used against us. How do we defend against social proof? So what we have to do, let's take online reviews, right? We have to check out the character of those reviews. It turns out there's particular things that allow us to know when the review is phony. Do they use a lot of personal stories? That means they're not giving you evidence of the features of the product or service because they don't really know it. They've just been hired to do. Do you do? they use a lot of verbs rather than nouns for the same reason? They're telling us what they were doing and how they were operating and how they were feeling about it rather than what the product really was.

So we can look to that. But also, there was a great study that looked at which star rating on a product review was most likely to produce a conversion from a prospect to a customer. It wasn't a five-point rating. It was a range between 4.2 and 4.7. People were on to the tricksters who were loading their evaluations with all of these positive things. So if it was below 4.2, people say, well, maybe this isn't such a great product. If it was above 4.7, they got suspicious.

So what we have, actually, is a constant struggle between the product review sites who have algorithms to try to weed out the phony reviews and the tricksters who are trying to outflank the various ways to prevent them. And it's an ongoing battle, but there are a couple of things we can do, and here's the thing that I keep recommending in the response to your question, what can we do about this? So, for example, there are instances in which news accounts tell us of companies that were caught providing phony information about their products, I mean, their popularity, or about their market share or about their ratings and so on, whenever we see one of those, we need to go on their site and go on every site of our social media and say so. Look, these people were cheaters. Don't go back to them. Look, they've been caught cheating. Don't do business with them.

We have to penalize those people who do the manipulation that you were asking about earlier. We can't just say, well, I'm not going to do business with them. We have to really penalize them at their bottom line level in order to reduce this tendency to manipulate. Let's talk about authority. Is there a difference between being an authority and being in authority? There is. And we can have a lot of evidence of somebody who's in charge directing those. who are working or operating beneath them to do something,

coerce them or threaten them with some kind of form of penalty if they don't move in a particular direction. Because I'm the boss, playing the I'm the boss card. That has costs. People don't like being pushed. They don't like being pressured, even by somebody who's in authority over them. them, very often what they do is they find a way to finesse the system and get around the directive.

Because what that's about, for me, is not influence as much as it is power. That's about power. Yes, and we can wield power, but there are costs of it. That's from being in authority. What we are recommending as a way to be influential is being an authority, somebody who knows a lot about the topic, someone who's a true expert on the matter, to the extent that we can harness that principle by having testimonials from legitimately, highly knowledgeable experts that speak to our idea or our product or service. service, that's going to work. I know that when Bose acoustics, we were working with them, when they added to an ad for a product that they had called the Bose Wave Music System, a line of testifiers right at the start of the ad, all over to the left, just as you read the ad

and up at the top, they saw all these testifiers. It increased purchases. by 15% of that product. We know that it was that ad that did it because the increase occurred only to the phone number that was in the ad. It didn't occur in the shops, people walking in and buy, no, it was to that phone number. And were there's testimonials by authority figures

or were those testimonials just average people? They were testimonials by authorities, legitimate experts on audition and electronic components, audio components, and so on. Now, here's the thing that we did help them with. Originally, when the marketing department structured that ad, those testimonials were at the bottom. And look at all of the people who agree with what we've just said here about this. By moving them to the top, the authority aura that they provide. is infused into every word of that ad as people are experiencing it.

Why would you throw that honest lever of influence away at the top? So what I always recommend to people who are using testimonials, and this can include, by the way, as you inferred, they can also include testimonials from similar others, because remember, we want to follow the lead of people like us, right? So you've got peers or you have experts. In either case, they need to go at the top so that you have been informed ahead of time

that others, experts or peers, have reduced your uncertainty of whether to believe the information that's going to come next. How do we defend ourselves against this? To ask ourselves two questions when we see an authority testimonial. One is, is this person truly an expert in this matter? What does Matthew McConaughey really know about Christless? He's driving and he's telling us how a great crisis, he's just some actor, right?

What's that? Right. There was a great set of TV commercials that began with an actor who played a doctor on TV, who began by saying, I'm not a doctor. But I play a doctor on TV, right? That ad sold all kinds of cough syrup. If we had thought about it and said, wait a minute, before I believe this person, let me ask, is this person an expert on this time? No. So that should unhook the expert influence from my mind on this. That's the first thing. But sometimes we will have people who are genuine experts recommending something. Then we have to ask a second question. Is there a reason for this person to be recommending this product or service other than its merits? Is this person hired? Does this person get product? for doing this is what a lot of influencers get yeah they get products and income from those products that they advocate on air so we have to once again unhook their perceived authority here if they truly are you know there are makeup consultants and so on they all do this and they say we love this particular kind of all right they might have authority but whether they're acting in the unbiased independent way is another question we should ask ourselves. And if we see that they're not,

unhook the perception that this person should be followed because of that expertise. Let's talk about the scarcity principle. Sure. People want more of those things they can have less of. We find that those items that are rare, scarce, dwindling in availability are more attractive to us. We want those things, more of those things we can have less of. And we all know that there's an acriman called FOMO Fear of Missing Out that we've all heard about. That's a big reason why scarcity works. The idea that if something is rare or scarce or dwindling in availability, it means we might not get it. We might miss it. Fear of missing out. We might miss out on this thing. And we hate that idea. There's a concept called loss aversion that Daniel Kahneman, who won

the Nobel Prize in economics a few years ago, demonstrated that the idea of losing something of a particular value is twice as powerful on human psychology as the idea of gaining that very same thing. When we present an idea to people that has all kinds of benefits and advantages that we can genuinely point to, we should not just couch it in terms of this is what you'll be able to gain by choosing our product. we should also honestly be able to say and this is something you don't want to lose right you don't want to forego those benefits that will resonate more powerfully remember we were talking about

that Bose ad that I was mentioned that if you put is that the one where you did the hear what you're missing or yes so we also before we even did that with Bose I on that same project, the first generation of the ad was very unsuccessful for Bose. At the top of the ad was the word new. And then after that, there was all kinds of information about new features, new elegance, new simplicity, and it wasn't being very well received by the Bose purchasers. So we asked them, we said, look, don't change the whole ad. change what you say at the top of the ad. The word new says uncertain. It says there isn't any

evidence about this yet. There isn't any feedback that I can see from my neighbors or friends at the office who've tried it. It's brand new. I'm going to wait. What we did was to change the word new to hear what you've been missing. The idea of missing out says, no time for waiting. No, no, I have to get this. I don't want to miss it. I don't want to miss out on this great thing. That change produced a 45% increase in sales. Then if the Bose Marketing Department added testimonials, they produced a 15% greater increase to 60% increase from the initial generation of that ad. But the idea of loss is what people really want to avoid. Now, I don't know how many of your followers are online operators. Most of us have a lot of online profile. But there was a

study of 6,700 e-commerce sites and A-B tests that were done for various components inside those sites. Does the site have free delivery? Does the site have a search function? Does every appeal end with a call to action? They had 29 of those. The top six were all principal of social influence. And the top one was scarcity of supply. We only have a certain number of these with this feature or at this price. It was the top AB test that produced conversion from prospect to customer. Second was social proof. Look at all the people who've already done this. We've gotten this kind of message. And by the way, there's a new research that shows that there's a particularly

powerful form of social proof that isn't just a large number of people have done this, but there's a trend to that number. It used to be that last year, we had 30% market share. Six months ago, it was 35. Now it's 40%, right? That's more powerful than just saying 40%. Because people project the function of the trend into the future. So social proof was number two with evidence like that of a large market share or popularity or trends.

And number three was scarcity of time. is limited time offers. This offer is only good for this week. Those three were the most powerful approaches. So scarcity was two of the top three. Now, I'm going to suggest there's something else that we can do that it powers the scarcity principle. And it doesn't require scarcity of supply or time limits. And that is uniqueness of what we offer. If we have something, a feature that none of our rivals can match, that's where we go. Because people will want it if they can't get it anywhere else. Now, a lot of times, because of the homogenation of the way things are manufactured and offered these days. A lot of times it isn't one thing that separates you from anybody else in the

market. But it could be a suite of things. A particular combination of features that only you provide go there. That's what people don't want to lose by going somewhere else. Let's talk about commitment and consistency principle. This is the one that says people want to be consistent with what they have already said or done, especially in public. As a consequence, if we can ask people to take a small step in our direction, voluntarily, could you do this, take a small step? They will now be significantly more likely to take a larger step that is congruent with what they have already done, because people want to be consistent within their behavior, and they want to be seen as consistent. So here's a good study in that regard. It was a study

done in Chicago with a restaurant owner named Gordon Sinclair. It's a famous restaurant called Gordon's there in Chicago. He's since retired, but while he was operating, he had a problem, no-shows. People who would call, they'd make a reservation, and then they just wouldn't show up, and they wouldn't call ahead to cancel. He had 30% no-shows. So he walked around and saw what his receptionist would say to people when she took a booking. She would say, thank you for calling Gordon's. Please call if you have to change or cancel your reservation.

He asked her to change two words. Will you please call if you have to change or cancel your reservation? And then he asked her to pause and have people fill that moment. And they all said, of course, sure, glad to. And that was their commitment. And no-shows dropped by 67% immediately and never went up because he had gotten them to make an active public voluntary commitment to something. And now they were going to live up to it to a greater degree.

So here's an implication, I think, for anybody like a manager, anytime you're running a meeting and you've given members of your team tasks to perform and complete before the next meeting, don't let anybody out of that room until you ask the question, will you be able to complete this by our next meeting and pause? If the answer is no, that's actually good for a manager to know. That means, okay, then I have to give this person more time or more resources or maybe even some help with it. But if the answer is yes, you have now significantly increased the likelihood that that person will come with a properly completed task to the meeting because you've asked them and they have made an act. public voluntary commitment to doing so. One of the interesting things for me about commitment and consistency is we sort of hide inside the walls of our own thinking. How do we defend against this, not only when other people are using it, but how do we defend ourselves from just constantly escalating and being held to opinions that may be no longer valid?

Man, this is a good question. And I'm going to answer it by first saying. how we do this with people who we would like to change in our direction who have already made a commitment to something else to another product or a service or an idea. Right now we've got a lot of people who are resisting health information about, well, right? How do we change that? We can't say, well, you know, when you made that decision, it was the wrong choice. You were just making a wrong choice. You're not a good decision maker. People want to hear that. That's going to get their backup and they say, I still stand by this decision. What you have to say is, at the time that

you made that choice in the information environment, that may have well been a good choice for you. But here's a new piece of information that we didn't have back then. As a good decision maker, people take into account all the information. So you're a good decision maker. And we, can get people unmoored from that commitment that they had made by saying, okay, now let's reevaluate because there's a new piece of information I can give you on this topic. And this is what I think I'm going to ask us to do ourselves, that when we encounter a new piece of information relative to a decision or a choice that we've made, you know, and that we get a chance to change, we need to say, if I knew this when I first made my choice, if that was part of

this decision, would I have made the same choice or would this have had enough weight to move me? My guess is a lot of times that would allow us to say, I want to take into account all of the information, including the information that I didn't have back then. any other questions I want to ask. And we have to cover unity and then I have a whole host of other questions. So let's talk about unity, which is the new one that you've added to the book, the seventh principle. What is it? How does it work? It works for a communicator in the following way. If that communicator can arrange for us to see him or her as one of us as someone who shares an identity with them in some kind of important way.

Like a tribal identity? It can be a, yes, tribal identity, but it can be something, I'll give you an example of a study that was done on a college campus. Researchers asked a young woman, college age woman, to stand on a heavily trafficked part of campus and ask people to donate to a good cause. I think it was the United Way. And she was getting some contributions. If she said before she made the request, one thing, which was, I'm a student here too, would you give the United Way?

Donations went up 400%. I'm one of you. I'm like you. I'm one of you. I'm of you. I'm not just like you in style or preferences. I'm of you. Then people will say.

yes. I used this a while ago in my own life when it turned out I was writing a grant application to get funding for a long three-year program of research and it was due the next day. It had to be sent in to the funding office the next day. I'm reading over it, you know, making sure everything is right. And I had a, came to a paragraph that said, made a particular claim, and I realized I really didn't have convincing evidence for that claim. But I knew that a colleague of mine in the psychology department where I was working at the time had done a study the year before and had collected the data that were relevant to this, and he had it in his archives. I sent him an email, and let's call him Tim. That's not his real name.

Tim, I'm in this bind. I have this grant due tomorrow and I don't really have the evidence, but I know you have the evidence for this one point that's crucial. I'm going to call you to talk about how I could get that from you in the form that I need to put it into this grant application. Well, Tim is known as an irascible, sour, negative kind of guy in my department. So when I called him, he said, hello, Bob. I know why you're calling. And the answer is no, I can't be responsible for your poor time management skills, Bob. You're a busy man? I'm a busy man. I have things to do today that also have time constraints. So the answer is no. Before I read this research on how people say yes to those inside their wee groups, what I call we groups, what I call we, groups, the groups that they would label as we, I would have said, come on, Tim. I really need this. I've got this deadline tomorrow, and it's a grant applicant. He had already said no to that. So here's what I said. You know, Tim, we've been in the same psychology department now for 12 years.

I really need this. And Shane, I had the information that afternoon. I just local. us honestly pointing to a common membership in something that was a shared identity for us. That's very powerful. Let's switch gears here a little bit. What makes Warren Buffett so successful? Thank you for listening to the first part of this episode. I don't want you missing out on the rest. If you're interested in hearing the complete version, you'll want to become a member. Head to fs.blog slash tribe. We cover what makes Warren Buffett so influential, how to ace your next interview, what to say when you do someone a favor, how to protect yourself against cognitive biases, who uses compliance tactics online the best,

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Thank you.