SCOTTSDALE, ARIZ. — Ever wonder what's on Warren Buffett's reading list?
Psychology books, at least according to a presentation during the final day of Gartner's CRM Summit here this week. Dr. Robert B. Cialdini, an author and a professor of marketing and psychology, explained to attendees that the billionaire financier known as the Oracle of Omaha grasps the reality of the marketplace: that, in order to build trust -- and, subsequently, gain influence -- you must first understand human behavior.
And yet, according to Cialdini, whose books include Science and Practice and Influence: The Psychology of Persuasion, even when armed with that understanding, you must also master what he called The Six Universal Truths of Influence:
1. Reciprocity: "It's a rule in all human cultures that obligates me to give back to you the form of behavior you first provide to me," Cialdini said. A card sent to you on your birthday, for example, pushes you toward returning the favor when the sender's own birthday approaches. "In the context of obligation, people say yes to those they owe," Cialdini said. Companies, he said, ought to consider what they might provide to customers at no charge. Having received a freebie, a customer might just be driven to make a subsequent purchase in return.
2. Scarcity: Cialdini asked the crowd to think of the two most in-demand items in 2008: the Apple iPhone and the Nintendo Wii. Each is a great product, he said, but that's not why consumers camped out in sleeping bags in order to buy one. "People want more of the things they [might otherwise] have less of," he said. It's psychological: "People are more motivated into action by the idea of losing an advantage than gaining it," he said, adding that you're therefore entitled to tell people what they will miss if they fail to move in your direction.
3. Consistency: People want to live up to their commitments, Cialdini said. "Ask for small movements in your direction," he said. "Then highlight what they've already done and show how that's congruent with what you've already decided to do, with the next step." The best way to get people to make a commitment is to ask them to write it down, he said -- whether that means asking a prospect to write down her desired purchase or describe which service she's looking for your company to provide. The effort, Cialdini said, will anchor that customer to you as a provider in ways that unwritten desires will not.
These first three points, Cialdini said, are great in establishing influence with customers -- but the following three are the ones critical to building trust. "Trust is the most valuable coin in the modern business exchange," he said. "It allows us to interact with people in efficient and effective ways."
4. Liking/Rapport: Making friends with people helps you to influence them, Cialdini said. "People prefer to do business with those they like and those who are like them," he added. Before even beginning the process of influencing another party, however, it's important to o establish rapport by uncovering similarities the two of you share. Information technology improves the ease and rate of success in this effort, Cialdini said. He recommended sharing a lot about yourself or your company, either on a social networking site or on your corporate Web site.
To illustrate his point about individuals being more responsive to people they feel are like them, Cialdini referenced a market-research experiment in which one simple alteration made email recipients 2.5 times more likely to comply with a request to fill out a survey. The change? Dynamically populating each "From:" field with a fictitious name that resembled the name of the intended recipient. (When sending the survey to someone named "Robert Gregory," for instance, the firm changed the sender's name to "Rob Greer.").
Cialdini also recommended putting a customer's name in the business-proposal title. By enabling the customer to connect her name with your ideas, he said, her own positive feelings of self will then extend to the proposal.
5. Authority: Demonstrating knowledge of your products and the marketplace can help convince wavering customers -- but, Cialdini noted, that's a demonstraion many companies are unable to perform. As an example, Cialdini said that the first effort to market the Bose Wave music system relied heavily on the word "new" -- a campaign that "fell completely on its face," he said. "They had all the merits on their side, but because it was new, people didn't have the history with it." Cialdini recalled how, after the company reshaped its advertising language simply by tweaking two small areas, the product began to fly off the shelves:
First, Bose invoked the scarcity principle by crafting ad copy emphasizing what customers without the product have been -- and will continue to be -- "missing."
Second, the company added to its marketing some expert testimonials -- people speaking knowledgably about the product without the perception of pro-company bias inherent in most marketing materials.
Testimonials are amazingly effective, Cialdini said, because they save customers a step in the buying process. "They will move people because it's a shortcut to making a good decision," he said. "And in modern life we need shortcuts." The expert approval serves more than just your company's own interests, Cialdini said, but also as a way to accurately depict reality for customers.
Demonstrating authority and your credibility helps pave the path to trust, Cialdini said, but you don't always have the luxury of multiple customer interactions under your belt. Even in those cases with no existing history, he assured attendees, it's still possible to gain a customer's trust, utilizing many of the skills already familiar to marketers, speechwriters, and anyone educated in the nuances of human nature.
The initial step, Cialdini said, involves admitting your own weaknesses. "There's no reason for people to trust us when they have no history with us -- until we demonstrate that we're honest," the professor said. If you acknowledge a weakness and then specify how your strengths will overcome it, he argued, the message gains an air of credibility. Think, for example, about the difference between these two sentences:
- "I feel very good about our plan, but we have a very long way to go."
- "We have a long way to go, but I feel very good about our plan."
Although the phrases essentially communicate the same message, the first carries a more negative attitude, whereas the second conveys honesty and openness. Cialdini emphasized that the shift in tone need not require a wholesale change in language: "I'm just asking you to change the sequence of the words you use," he said.
6. Consensus: As the advent of social media has made abundantly clear, individuals trust their peers and "someone like me" more than they do any business or corporation. "People want to follow the lead of multiple others and comparable others," Cialdini said. Peer testimonials are that much more powerful because consumers feel that other consumers have no ulterior motives. Better to embrace the consensus, Cialdini told attendees, than to fight it.
As an example, Cialdini spoke about the effectiveness of infomercial messaging. The most successful infomercials don't say, "Operators are waiting. Please call now." Instead they say, "Operators are busy. Please call again." He also cited hotels that ask guests to reuse their towels, and the research indicating how people's willingness to forego a new towel each day depended largely on the phrasing used in the hotel's messaging.
- In response to a motivational approach -- "Save the environment!" -- only about a third of people reused their towels.
- Phrasing that implied a collaborative effort -- "Please join us in saving the environment" -- led to similar results.
- When messaging was something akin to "the majority of guests reuse their towels at least once," the share of guests opting to comply rose to about half. (Results improved further, by the way, when hotels said "guests in this room reused their towels at least once.")
Consensus is an important mechanism for gaining trust and influence, Cialdini said, and companies should not only make peer-to-peer testimonials and references available, but make them more personal and relevant as well. He advised attendees to segment the peer testimonials into subcategories that represent different sectors of their respective markets.
News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.