Thursday, May 31, 2018

Professor Cialdini's seventh factor of Influence = blindingly obvious and sometimes overlooked

My friends and I are big fans of Bob Cialdini (on the left), who we met in Omaha, where he was having dinner with Warren Buffett's partner Charlie Munger (on the right). 

People who have read "Influence", often remember his story which describes how a jeweller sold out of turquoise jewellery because although they meant to mark it down 50%, it was accidentally priced at double its initial price. Shoppers, seeing the high price automatically found ‘value’ in the turquoise jewellery as opposed to the ‘regular everyday’ gems. In a matter of context, the regular gems will look like a bargain next to the higher priced turquoise, thus all jewellery sold well. Restaurants use this context method on their menus by placing the expensive seafood listing close to the basic chicken whereas the $30 chicken plate looks like a bargain next to the $50 seafood plates.

Stories are easier to remember, but what some people forget is obvious. Cialdini also wrote: 

"The 6 principles (of Influence) - consistency, reciprocation, social proof, authority, liking, and scarcity - are each discussed in terms of their function... It is worthy of note that I have not included among the six principles the simple rule of material self-interest - that people want to get the most and pay the least for their choices. This omission does not stem from any perception on my part that the desire to maximize benefits and minimize costs is unimportant in driving our decisions. Nor does it come from any evidence I have that compliance professionals ignore the power this rule. Quite the opposite: In my investigations, I frequently saw practitioners use (sometimes honestly, sometimes not) the compelling "I can give you a good deal." approach. I choose not to treat the material self-interest rule separately in this book because I see it as a motivational given, as a goes without saying factor that deserves acknowledgement, but not an extensive description."

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