Research

Podcast: Persuading nervous customers to buy

With the economy continuing to falter, consumer product and service companies are looking for every edge to bring in business. Robert Cialdini, a professor of marketing at the W. P. Carey School and author of "Yes: 50 Scientifically-Proven Ways to be Persuasive," talks about the psychological tendencies that determine whether you or your company can persuade a customer to buy your product. In uncertain times, people want to know what the experts say, and what other people like them are doing.

2009-01-14

With the economy continuing to falter, consumer product and service companies are looking for every edge to bring in business. Robert Cialdini, a professor of marketing at the W. P. Carey School and author of "Yes: 50 Scientifically-Proven Ways to be Persuasive," talks about the psychological tendencies that determine whether you or your company can persuade a customer to buy your product. In uncertain times, people want to know what the experts say, and what other people like them are doing.

Transcript:

Knowledge: With the economy continuing to falter, consumer products and services companies are looking for every edge they can to bring in more business. That's where the power of influence and persuasion come in. Robert Cialdini is a distinguished professor of marketing at the W. P. Carey School of Business. In his bestselling book, "Influence: The Psychology of Persuasion," he writes about how basic human behavior can influence buying. Here he looks at how companies can harness that behavior to their own advantage.

Knowledge: How do you define influence?

Robert Cialdini: Well, to me influence means change. That change can be in an attitude, it can be in a belief or a behavior. But in all instances, we can't lay claim to influencing anyone until we have demonstrated that we have changed that person somehow.

Knowledge: And how specifically do we influence people successfully and ethically at the same time? It isn't always the same thing.

Cialdini: No. That's a good question, because the principles of influence can be so powerful in causing change in others. We have to consider our ethical responsibilities in the process. Fortunately, the way to be ethical in the use of principles of influence is the same way to be profitable in using them. Always be sure that to influence another we should undertake actions that assure that we haven't damaged our ability to influence that person in the future. In other words, the other person must benefit from the change we have created.

Knowledge: What is the most important thing in making a request?

Cialdini: Oddly enough, the most important thing in making a request is not the request itself. It's in what you do before you make the request. This is a little secret that's understood very well by the most accomplished influence professionals, the people who I call "influence masters." In my own observation, I've found that those who are most successful at getting what they want work very hard at first arranging a favorable psychological environment for their request.

After all, even if you've got a perfectly wonderful idea to offer, many people won't bother so much as to listen to your offer unless you've first done something to make them like you, or see you as an authority on the topic, or feel a commitment to your idea. So by first establishing an environment of liking, or authority, or commitment, or obligation, or scarcity, or consensus, you give your request the benefit of falling on fertile rather than stony ground.

Knowledge: Right now we're in an environment of economic uncertainty. People are unsure of what to expect next. Are there any of the principles of influence that will work especially well in this kind of environment?

Cialdini: Yes there are, but it probably makes sense for me first to talk about what the universal principles of influence are and then focus on those that might be especially powerful under conditions of economic uncertainty to spur people to move in the direction of your requests or recommendations of them.

In my research I've counted six universal principles of influence, psychological tendencies in people that are so strong that if one or another of these principles is incorporated into a request that we might make of another person, that will significantly increase the likelihood of assent to our request. The first of those principles is reciprocation. People give back to you the kind of treatment that they have received from you.

So if I invite you to a party, you should invite me to one of yours. If I remember your birthday with a gift, you should remember mine with a gift. Here's the key. If I do you a favor, you owe me a favor. I will say very simply, in the context of obligation people say "yes" to those they owe. So the implication is when we go into a situation where we want to be more successful, more influential, the first question we should ask is not, "Who can help me here?"

The first question we should ask is, "Whom can I help here? Whose business circumstances can I advance here? Whose outcomes can I enhance here?" That person will then want to advance our business outcome, want to improve our business circumstances in return. So for example, there was a very simple study that was done in restaurants. Researchers found that if a waiter puts a little mint on the tray with the bill at the end of the meal, tips go up 3.3 percent.

But if the waiter puts two mints on the tray for each diner, tips go up 14 percent. All in keeping with the rule people want to give to us after we have given to them. The more we have delivered, the more they want to give back in return. So that's the first of the principles. The second is scarcity. People will try to seize the opportunities that you offer them that are rare or dwindling in availability. So people want more of those things they can have less of.

That's why it is so important to be sure that we identify for them before we make an offer, what are the things that are unique, uncommon, and scarce about what we have to offer? Very frequently it's not any one thing, but it will be a bundle of things, a bundle of advantages that only we can provide. That's the sort of thing that needs to go first before we try to influence people. The third principle is the principle of authority.

People will be most persuaded by us when they see us as having knowledge and credibility on the topic. So people defer to the council, to the advice of legitimately constituted experts. Once again, it tells us something that we do before we ever try to make a request or a recommendation. We have to honestly inform people of our background, credentials, and experience in the matter before we try to influence them. It sounds simple, but you'd be surprised at how many people forget to do that.

They just launch into their appeal without credentializing themselves properly. Fourth is the principle of commitment. People will feel a need to comply with our requests if they're consistent with what they have publicly committed themselves to in our presence. So what this tells me is before we try to influence people we should first find out, "What are their internal commitments? Which are the values that they most prioritize, the preferences they have in the situation?"

Once we've identified those and asked them to tell us what it is that they truly want to realize form the situation, what values they want to prioritize, then we should make our request in a way that's consistent with those values and those preferences. And we significantly increase the likelihood that they will say yes to those requests is they have specified them publicly to us. Now they are going to want to be consistent in our eyes by saying "yes" to requests that are congruent with what they told us they value.

The fifth principle is liking. People prefer to say yes to our request to the degree that they know and like us. Not surprising. But here's a little thing that research shows, and that is one simple way that we can increase the likelihood that people like us is to find commonalities, similarities, parallels with them and ourselves and bring those to the surface. So again, before we begin the process of influence we should engage in a period of sociable interaction with these individuals. Find out who they are, what their background is.

And where there are parallels, where there are similarities, simply raise those to the surface. People will come to like us more and be more willing to move in our direction as a consequence. The final principle is consensus; the idea that people are likely to say yes to our requests if we give them evidence that people just like them have been saying "yes" to it. For example, we can go back to the restaurant again. If a restaurant owner puts on the menu, "This is our most popular dish," it immediately becomes more popular.

Because one source of evidence that people use to decide what they should do in a situation is to look at what those around them, just like them, have done or are doing. It's a shortcut to making a good decision. So what we want to do is marshal those testimonials, those accounts of other individuals as similar as possible to the individual we're trying to influence at the present time.

But marshal the testimonials of people who are similar to them who have taken our advice, who have moved in the direction that we are recommending with profit and raise those accounts to the surface before we ever try to be influential. Now, which of these principles gets the most traction under conditions of uncertainty? There are two of them really. Because when people are unsure of themselves, they don't look inside themselves for an answer of what to do. All they see is that uncertainty.

They look outside themselves. They look to two places in particular. The first is experts. What are the authorities on this topic saying about what makes the most sense to do here? They can reduce their uncertainty about what they should be doing by looking at what the experts are counseling. That's one source of information.

So one of the things we should be sure to do in a situation of economic uncertainty — or when we have a new product or service to introduce to the market which people are unfamiliar with — is honestly record the number of favorable comments that experts and authorities on the topic have been saying about our product or service. That will significantly increase the likelihood that people will go along with our recommendation.

The second place that people look when they are uncertain — again, not inside themselves — they look outside. They look to their peers, individuals who are very much like them in the situation. For example, we just finished a study in hotel rooms. If you've traveled at all recently you see these little signs asking you to reuse your towels and linen in the hotel. We asked the question, "What could the manager of the hotel put on the sign to significantly increase the likelihood that people would do this?"

Typically they say, "Do this for the environment. Do this to be an environmentally conscious citizen."

Well, we looked at those signs. We put signs like that in certain hotel rooms in the Phoenix area, but we also put a third kind of sign in some rooms. This one said, "The majority of guests who have stayed in our hotel do reuse their towels at least once during their stay." That sign produced a 34 percent increase over any of the signs that the hotels had been using, because people were deciding what they should do based on what the people around them were doing.

Knowledge: So there's a bit of a herd mentality.

Cialdini: There is a herd mentality in most of us, and most the time it steers us correctly. We're usually right if we follow the lead of those around us. If all of your friends are raving about a new restaurant or a new movie, chances are you would like it too. If all of your colleagues are raving about a new piece of software, chances are it would work for you too. So it's a shortcut we can use to usually be right.

Knowledge: All of your friends say, "This movie is great," does that necessarily ensure that you will like it too, or does it ensure more that you'll at least go see it?

Cialdini: That's a good question. It ensures that you'll give it a try, and chances are that you'll like that movie, or you'll like that piece of software, or you'll like that restaurant. But the chances are even higher that you'll give it a try because it'll reduce your uncertainty about where to go to dinner on Friday night or what movie to see on Saturday night.

Knowledge: So going back to this economic environment, especially now when you have stores just trying to get people in there shopping, you're hearing all this stuff about what the Treasury Department is doing and the Fed in lowering interest rates. But the big "if" is: do people feel comfortable enough, secure enough in their jobs, secure enough in their finances, to want to go out and buy something else and increase their debt? Where can this power of persuasion be used to get people back into those stores, for example?

Cialdini: Well, again, let's take any given product. I do some consulting for the Bose Acoustics Corporation, a large high-end audio equipment manufacturer. They had a new product called The Bose Wave Music System and their first advertising campaign for it wasn't successful at all. So we talked about one small thing they could do, which was to put along the side of one of their ads a list of all of the experts in the area of audio equipment who were saying positive things about the Bose Wave Music System.

That produced a significant increase in sales as a consequence. So one of the things you can do is to honestly list those positive comments that have been made by genuine authorities. The other thing you can do is give honest testimonials from other shoppers who have decided to buy this particular product, or simply say, "This is our largest selling model right now."

That's going to get people off the fence and make a decision to buy something because they've been able to reduce their uncertainty that this is a good opportunity. "This is a good time to buy because a lot of people have decided to purchase this item at this time."

Knowledge: Going to the power of persuasion, what are some examples of where it can be used unethically? And do people catch on when it's being used unethically?

Cialdini: Well, they don't always catch on when it's being used unethically. Take the situation that we've just heard — this man, Bernard Madoff, who had a hedge fund and who was essentially running a scam on his investors. But people kept investing and more people kept joining. He used two of the principles we've talked about that worked very well under conditions of uncertainty.

Uncertainty was caused by the fact that it was a hedge fund and people just don't understand the mechanisms and processes of hedge funds. They are very obscure and murky. So he had uncertainty. Then he promoted his hedge fund by saying, first of all, "I am an expert in this." He was the former chairman of the NASDAQ stock exchange. So people thought, "Oh, he must know what he's doing."

The second thing he did was to get people to come into his fund by getting his existing clients to talk to their friends in their social networks, the people at their country club, and so on, and to say, "I am invested with Madoff. Maybe you should be too." Well, when people saw that their peers were doing it, then they jumped in. Maybe the best way to end is to offer a lesson that one of my colleagues just learned. He has spent his professional career trying to find the single most effective sales strategy.

I saw him at a conference a while ago and he caught me by the elbow, and he said, "Bob, I've found it. I've found the single most effective sales strategy. It's not to have a single sales strategy." That's a fool's game. The proper approach to influence in any situation is to go into that situation and examine what's naturally there in the situation, not something you bring into it at all instances and at all costs.

But if you're an expert, that's the thing you should raise to the surface. If there genuinely is consensus about your products or service, bring that to the surface. If there is real scarcity, bring that to the surface, and so on. So you go into a situation looking for the existence of one or another of these principles that already exists there and then merely bring it to the consciousness of the people you're trying to influence.

Marketing Faculty