Hey there! This is my notes from Dr Robert Cialdini’s talk at the Value Investor Conference 2023.
I will be sharing my notes from other talks from speakers such as Tom Russo, Chuck Akre, Mario Gabelli and Francois Rochon to my free newsletter subscribers.
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The 7 Universal Principles Persuasion
- Scarcity: People want more of what they can have less of. Loss aversion, people are more likely to take action when they lose something, as opposed to gaining something.
I.e. get them to think what they’ll lose for not moving in our direction.
E.g. If you don’t insulate your home, you lose $1 a day (vs get $1 a day).
- Authority: We live in a world where there’s so much information and choices, so much stimulants, too much uncertainty and to reduce that uncertainty, we rely on authority.
We feel much more willing to get off the fence and into the game.
Marshall evidence of what legitimate experts are doing (it’s not me, it’s the experts who are doing this!).
Recruit all the testimonials, traditional marketers will tell you to choose the best testimonials, BUT multiple testimonials significantly increases the authorities. Multiple testimonials doesn’t dilute the impact, it up the impact. Put the testimonials FIRST. Put evidence of authorities supporting your approach.
- Social Proof: What are my peers doing?
Likewise, this reduces our uncertainty as well. If your friends are raving about a piece of software, then you don’t have to beta test the product.
E.g. UK If you say X% of people in your region (community) pay on time, the compliance increases significantly by zooming it to peers relatable to them.
Oh you own family businesses?
Let me tell you what my client who owns family businesses do.
Tell them what’s most popular amongst your clients.
These are our most popular dishes.
- Commitment/ Consistency: We want to be and be seen as consistent.
If you can arrange for people to take a small step in your direction, you have arrange for them to be significantly likelier to take a bigger step in your direction.
E.g. Gordan Restaurant has a problem with people who reserved but didn’t show up.
Thank you for calling. If you have to change or cancel, please call.
Add two words: Will you please call? (Pause)
Let them fill that pause with a commitment. No shows dropped by 64% that day, and never went back up. They’ll want to be congruent with what they said.
People live up to what they write down. Get them to state down their commitments.
Below 3 principles are important for relationships. Build long-term partnerships that lead to efficient exchanges. Don’t need to doubt and back away. Trust ensures smooth exchanges.
- Reciprocation: The power of exchange.
I’m obligated to give back to people who have first given to me.
Every culture, have a nasty word for people who don’t give back. Moochers, takers, etc.
People will go to lengths to return the favor to avoid being labelled that way.
What’s the smallest thing you can do? Give first!
Brazil McDonalds restaurants experiment.
Balloon is given before vs after order:
- Size of family purchase +25%
- Size of coffee purchase +20%
When you do a favor for my kids, you do a favor for me. That’s why coffee spend is up.
You have to give first, but it doesn’t have to be a material gift or favor. It could be focused attention, or information, or effort. After you listen deeply, it’s your turn, they’re going to listen to your case deeply now.
If people see that you have put in effort, they will return that effort in kind. When you do someone for you, show your work! So they’re incline to return the favor.
Don’t fumble away the Moment of Power after “Thank You”. Don’t throw away the opportunity after you’ve done the favor.
You don’t say: Oh don’t think anything of it. Would have done it for anybody. Part of the job.
Don’t tell them to ignore it after you’ve gone above and beyond.
If it’s someone in your organization: Of course, I’m glad to do it. It’s what we do for one another.
Put it on the map! Next time you need a favor, you’ve significantly increased the likelihood of of them returning the favor.
If outside organization: Of course, I’m glad to do it. If the situation is ever reversed, you’ll do the same for me.
(NOT you would have done the same. That’s in the past. Words to focus on the future.)
Likewise, put it on the map and bring it to consciousness.
- Liking: Liking flows from positive connections:
- Similarities
- Compliments
- Pleasant Experiences
When connecting groups:
Get people to send information about themselves e.g. hobbies, schools, family, etc.
If in that information, there’s similarities, it’ll facilitate connection.
People like people who like them and TELL them.
People who were complimented as most altruistic gave much more donations. I.e. Compliments that give them a reputation to live up to.
Don’t compliment the act, compliment on the TRAIT.
Act is a one-time thing, trait goes into the future. E.g. Trait of punctuality, trait of conscientiousness.
We like items that are associated with pleasant experiences. What’s the smallest thing you and your team can do to harness pleasant experiences? It’s a smile (a small big for liking!)
If you are doing online work, then send a shape of a smile!
In other words, your logo, business cards etc should have a smile. Show them that you like them!
Another small thing to harness the power of pleasant experiences:
People have pleasant experiences with words or symbols that are easy to pronounce or spell.
- Unity: The feeling of togetherness (“We-ness”)
People like a social identity.
To foster feelings of UNITY:
- Point to existing unities (we relationships)
- Ask for advice. Don’t ask for opinions, they critic and step away from unity.
When you ask for advice, you get a partner.
E.g. Buffett always say I will tell you what I will tell my family.
What a unifying way to say. Tell you what I tell my family.