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

Man and woman working on paperwork with a calculator.By 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 talking on a phone.Cialdini’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.

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