Posted on Thursday 17 January 2013 by Ulster Business
The ability to steer a conversation or pitch in one's chosen direction, and subsequently close a deal, is the holy grail of communication. Whether you're going after an elusive sale in a dry spell, seeking 'buy-in' or support for an internal project, or trying to encourage a colleague to see your point of view, researchers have identified a wide array of techniques that can be used to increase the power of your persuasion punch.
Skills like these have never been more useful than when going after investment.
The role of the venture capitalist as an investment model has never been more economically important. As an agent for growth, they allow both parties to grow and innovate through synergies in their financial and human assets. In spite of the projections of growth that many had been banking on, the UK economy's relative stagnation through 2012 served to increase investor's risk aversion, with the value of investment from private equity and venture capital sources in 2012 is expected to be down on 2011.
So whether you're in the market for an investor, or just trying to get your message heard, when it comes to persuading others you can't afford to miss a trick.
The science of successfully persuading others to think, act, or behave in a certain manner has gained considerable pace in the last twenty years. Led by Arizona State University's Robert Cialdini, there now exists a burgeoning library of proven and tested methods to improve your likelihood of getting results in the boardroom (or even at home!).
Following over thirty years of work researchers have identified at least four key factors that, when exploited, will have a dramatic impact on your ability to persuade: Reciprocation, consistency, and social proofing. But how can they be used?
When it comes to raising funds, few sectors are under as much pressure as those that comprise the charitable sector. We've all arrived home to a doormat full of requests for one off contributions, or even regular monthly donations from the most deserving causes. One might presume that the images of the vulnerable individuals being supported by the organisations would catalyse a contribution, or that evidence of the great strides they're making in changing lives would be enough to bolster their coffers. The actual results are much less impressive. Research shows that when charities use direct mail to canvass for donations, they receive money from less than one fifth of the recipients.
Surprisingly, though, when the envelope includes a free gift – perhaps a pen, bookmark, or daffodil – donations double to nearly 40%. Put simply, when we unexpectedly give our clients or prospects something that is of value to them, they feel an incredibly strong obligation to reward us. The key, though, is that the 'gift' is unexpected, and unconnected to any perception of an ulterior commercial motive.
Restaurant tables are like bananas. They perish. If a table sits empty, it cannot be 'stockpiled' and sold again at an indeterminate date in the future. Restaurant tables, airline seats, and hotel rooms all suffer from this 'fruit-like' perishability; every empty seat, table, and bedroom equals unrecoverable yield.
In the late 1990's, the owner of a Chicago restaurant was faced with a problem that was costing him hundreds of dollars in profit every single day. Customers new and old would make telephone reservations, and more often that not fail to arrive at the restaurant. Tables were being reserved and kept for customers that were not arriving, and 'walk-in' customers were being turned away needlessly. Tables were perishing before his very eyes and his bottom line.
By way of a solution, researchers recommended the owner instructed his receptionist to alter a couple of words in her telephone conversation with those making reservations. The simple change reduced the number of 'no-shows' by a staggering 66%. How? The receptionist merely modified her request from "Please call if you have to change your plans" to "Will you please call if you have to change your plans?" At that point, she politely paused and waited for a response. The wait was pivotal because it induced customers to fill the pause with a public commitment. And public commitments, even seemingly minor ones, have a staggering impact on one's likelihood to follow through with their actions.
So the next time you want to be assured the opportunity to have a follow up meeting with a potential lead or investor, don't rely on a follow up email, seize the moment and ask directly for a follow up meeting. Or, if there's someone in the office who continually misses deadlines, a tersely worded email might seem like an appropriate action, when in actual fact simply seeking a public assurance of timeliness at a team meeting could be 70% more effective.
Like it or not, we are herd animals. We see the crowd move or behave in one way, and we find it virtually impossible to not drift in that direction. As human beings, we all tend to believe that we are unpredictable in this regard. Our penchant for believing that we are unpredictable is, however, one of our most predictable qualities.
As part of an experiment, a man stopped on a busy pavement in Manhattan and gazed straight up in the air for one minute, at nothing in particular. Designed to see what effect this activity would have on pedestrians, researchers found that most didn't notice the curious behavior and around 5% joined the man in looking upwards. The experiment was then modified and repeated. For the second try, larger groups of pedestrians were 'in-on-it', crowding together to look at the sky. When five people rather than one looked up at nothing the percentage of pedestrians who followed suit jumped to nearly 20%. Larger groups of stooged up-lookers generated an even stronger result: an initial gang of 15 led 40% of passers by to join in, nearly stopping all pedestrian traffic within just one minute.
Similarly, a separate piece of research reported on a fund-raiser who presented residents with a printed list of neighbours who had donated to a good cause dramatically increased the frequency of contributions; the longer the list, the bigger the donation received, even if the list is faked. We must always, therefore, go out of our way to inform investors or prospects when our product is the largest-selling or fastest-growing of its kind, because believing that hordes of people are flocking to buy your product makes it instantly and dramatically more attractive.
Find out more about David's work on www.davidmeade.co.uk and follow him on twitter @davidmeadelive