In times of economic uncertainty, it might just make the difference for your business.

Worried_coupleBy Steve Martin, CMCT

The messages of impending doom, which appear to be broadcast with increasing frequency by business leaders, analysts and media commentators, share some striking similarities to another forecasting favorite – the trusty weatherman.  Even the language is the same, with talk of storm clouds brewing, a bleak outlook and unpredictable conditions ahead.

Of course all predictions, whether meteorological or economical in nature, can be wrong.  But this happens less often than one would expect – forecasters are very often correct.

There are exceptions: few seeing the 2007-8 financial meltdown is one of the more cited examples of recent wrongs.  In general, it is easier for people to remember when forecasters “got it wrong”, rather than when they get it right.  It’s unlikely the topic of discussion at the water cooler starts with someone remarking how much they admire the morning news weatherman “for getting it right again”. They are much more likely to comment if he was wrong, simultaneously signaling that, and “had they known better, they would have brought their umbrellas to work.”

Currently there appears to be a consensus that many businesses are still experiencing turbulent times; at least in the short term.  So what practical steps can businesspeople take to survive and prosper in this environment?  What can these businesspeople do when they are already overloaded, dealing with customers who are uncertain, time-poor, and cynical as well?

Of course it makes sense for any business to look carefully at its policies and procedures; at the very least to look for ways to reduce inefficiencies, save on expenditures and, if necessary, restructure operations.  But it’s unlikely that those actions alone will be enough.  Policies and procedures are only two legs of the stool – and two-legged stools tend to be unstable.

Fortunately, there is a third leg; one that is cost-efficient and easy to apply.  It is the science of persuasion.

Scientists run studies, measure outcomes, analyze data and publish findings in scientific journals. In the fields of influence and persuasion, the most respected and best known scientist is, Dr. Robert Cialdini who is a longstanding colleague and co-author of mine.

Woman_phoneCialdini’s central claim is as profound as it is simple.  When uncertain, time-poor and overwhelmed, people increasingly rely on just a handful of mental shortcuts to guide their decision-making and behavior.  Understanding and using these shortcuts in ethically sound ways can provide extraordinary opportunities for businesses to become more effective at persuading potential customers to choose them rather than the competition.

Two of these decision shortcuts, Social Proof (we follow the lead of comparable others) and Authority (we look to experts to guide our decision making) are more likely to carry particular weight in times of uncertainty, such as now.

Here are two examples that show what remarkable returns can be produced from an understanding of the persuasion process when used ethically and in an informed way.

Effectively using people power

No one likes to pay taxes, but most citizens recognize the contribution taxes make to the smooth and fair running of society and the need to pay them in a timely manner.  However, there are those who fail to comply with this requirement.  And these failures hurt the rest of us. So it should be no surprise that policymakers will deal with the problem by levying fines and penalties to late payers.  This makes sense and it is hard to argue against such a policy.  But, is there a way to improve timely collections by employing the often underutilized force of Social Proof?

For the last two years, we’ve been working with the taxing agency in Great Britain to test a range of letters pointing out to recipients that the vast majority of UK citizens pay their taxes on time.  The studies have found that this Social Proof message increases response rates by about 15%, resulting in more than 350 million pounds in additional cash-to-bank revenue.

If an understanding of the persuasion process can generate such impressive returns for actions that are not especially motivating to people, imagine what it could do for your business, in this case understanding when and how to employ the persuasive pull of a Social Proof campaign.

Follow an expert

Because of the economy, many sectors of business have suffered from public misperceptions concerning their credibility and trustworthiness.  Real Estate is just one of them.  However, one agency was remarkably successful in gaining a reputation for credibility and trustworthiness by understanding the authority shortcut – the idea that, when uncertain, people may decide on the best course of action by following suggestions of a credible authority. How does this agency ethically use this principle? Their receptionists do it.

When a potential client calls to inquire, the receptionist informs the caller of the credentials of whom they are going to connect them to.  Those interested in renting a property are honestly told, “I’ll connect you with Sandra who has more than 15 years of experience with rental properties in this area.”  Those who want to talk about buying or selling property are put through to Peter. “He is our head of sales and has 20 years of experience in property sales.”

As in the tax letters, a small change would not seem to generate much difference, but when staff were introduced in this way, the number of successful interactions with potential clients rose by about a fifth, compared to when they were not introduced this way. New business contracts rose too, typically by 15%.  Not bad for an intervention that required little in the way of policy or procedural change, but instead an insight into effective persuasion.

The tax letter studies and the Real Estate agency story also share other common features.  Both were entirely ethical and honestly employed.  The interventions were cost effective too, showing impressive returns on investment.

Importantly, both originated not from a policy or procedural change but from a change learned from persuasion science.  And I don’t use the word “science” lightly.

In the same way science can help forecasters to correctly predict weather patterns, persuasion science can help businesses and organizations correctly predict strategies for influencing successful business outcomes with clients, business partners and colleagues.

Unlike meteorological science, persuasion science is easier for an organization to understand and practically apply; primarily because it is founded on a handful of principles that are trainable, measurable and can be applied as a system.

Will persuasion alone be the answer?  Of course not.  But combined with the right policy and procedural changes it can become the catalyst for making change happen and winning that all-important business.

In these uncertain times, businesses that embrace the persuasion science might find themselves in the enviable position of prospering while others around them flounder.

Steve Martin co-authored the New York Times Bestseller, Yes! 50 Scientifically Proven Ways to be Persuasive (Free Press) with Dr.Noah Goldstein and Dr. Robert Cialdini

Copyright 2012 INFLUENCE AT WORK

What small, yet inexpensive procedures, have you seen employed using Social Proof or Authority?

What is one thing you can change to use Social Proof or Authority ethically?

What ads have you seen that use Social Proof or Authority?

This article was originally published by IEDP.  IEDP publishes specialist information for leaders and leadership development professionals in large organizations, focusing on the latest developments, ideas and best practice being delivered by the world's premier business schools and consultancies.

  • Ryan Nagy

    Hi there – Predicting using established research principles in bounded situations (i.e persuasion contexts with people) is indeed a science. Thanks of course, to people such as yourself, Dr. Cialdini and many others. However, in the other contexts that you mention – the financial markets, the economy and the weather, predictions are inherently unstable and deeply flawed. In fact, if you look at the record of predictions in these areas you will see that they are indeed no better than chance.
    There is a ton of research on that issue. A good popular reading would The Black Swan by Nassim Taleb. In certain contexts, the world is inherently unpredictable regardless of how much research one has conducted.

  • John Volpe

    Steve and Robert,
    What a great article ! I’ve enjoyed reading Influence as well as Yes and listening to both the abridged version of Influence as well as Instant Influence. What a great example of why your principles work so well! I’m forever grateful that Tony Robbins turned me on to your work Dr. Cialdini and I always look forward to getting my Influence at Work newsletter ! Merry Christmas to the two of you and your entire Krewe as we say in New Orleans.

  • Ernie Jones

    It’s true that when you’re dealing with chaotic systems, such as financial markets, predictions are dicey at best. (Weather forecasting has greatly improved in the past few decades, and in any case what you’re usually getting there is a retro-cast — e.g. a “60% chance of rain” simply means that when conditions were like this before, it rained 6 out of 10 times.)
    Yet as you say, predicting human behavior, especially for large groups, is a different kettle of fish, because despite our individual differences, our brains — like all our other organs — work in much the same way (see Ariely’s “Predictably Irrational”, for example).
    So when the human brain tries to, say, predict the stock market, then yes, the results are indeed no better than chance, despite brokers’ natural tendency to credit their hits to their own acumen while blaming their misses on unpredictable (or supposedly unpredictable) events like natural disasters and recessions (see Dan Kahneman’s work on this, for example).
    But when our brains try to predict how large numbers of other brains will respond to persuasion, we’re getting better and better every year, because our brains aren’t stock markets.

  • Michael Yardney

    Thanks for this,
    We are also in the property business and have found that by the receptionist mentioning the credentials of our team members before they put them through, it makes a big difference – it elevates them from just another real estate sales person to a specialist in their field

  • Bernhard Baumgartner

    I also immediately thought about the Black Swan stories.
    I made a short powerpoint demonstrating how experts can be wrong in their own domain.
    Have a look, some of them are pretty funny

  • Karla

    I look historically at the influence of social proof in the field of organized religion. In the 50’s “everyone” was going to church. Coming out of WWII, with the influence of Billy Graham and Fulton Sheen from their respective traditions, forming a family and a faith was the respected trend. In the past decade, organized religion has taken many hits, from the homosexuality conflicts within denominations to the clergy abuse crisis to the loud proclamations of an evangelical president whose hypocrisy turned many off, the social proof has switched the opposite way. It will be interesting to see what trends the next 50 years brings. Unlike the financial and real estate worlds which turn quickly (measured in months and years), this is a boat that steers more slowly.

  • Victor Antonio, Sales Influence

    Steve, great article as usual! Thank you for sharing.

  • Steve Martin

    Hi Bernhard,
    I enjoyed your slideshare link. Thank you so much for sharing it there are some good ones in there.
    Happy Holidays.

  • Steve Martin

    Thanks John, and Happy Holidays to you and the New Orleans Krewe as well.

  • Steve Martin

    Its great to hear that this simple but evidence informed change is having such a positive impact. Thanks for the feedback and Merry Chirstmas.

  • Francisco

    Very funny presentation. As far as I know, the quote about the future ain´t… is from Ray Bradbury. Congratulations.

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