In this article on Negotiation, I’ll go further into “How We Make Decisions”. This information comes in part from a book called Influence: The Psychology of Persuasion, which is one of the best books I’ve ever read. Part one of this article can be found here Theory Negotiation : Bargaining for Advantage
As I explained in the last article, we make split second decisions by taking short cuts based off of previous events. We also determine what is correct by finding out what other people think is correct. This is called bandwagoning.
Bandwagoning is so powerful that 95% of people base their decisions on what the majority is doing vs. the proof. This rule becomes even more powerful when we observe the actions of people that look like us.
Testing the Power of Bandwagoning
A Bible door-to-door sales company increased sales by 119.6%, just by showing people testimonials given by people that looked like the potential customer. So men where shown testimonials from men of a similar age and appearance, as were women.
Even more shocking, research has proven that immediately following a front page suicide story the number of suicides increases dramatically. I wrote about this in a previous article. On average each suicide publicized by the media is responsible for 58 additional suicides. Many people are just waiting to see if others think suicide is a potential answer before they choose to end their own lives.
In another example of people following the heard, in 1988 customers caused a massive bank failure, because of Bandwagoning. A bus strike created an abnormally large crowd in front of a bank. Passersby panicked and got in line to withdraw their funds, from what they thought was a failing bank. Because bandwagoning works best during periods of uncertainty, this created a perfect storm for this principle. As you will see, during periods of uncertainty we rely most on these built in responses.
The Liking Principle
People like and trust others that look like themselves. This is the basis of the Liking Principle. For example Tupperware sells 2.5 million in products because their friends our offering the products to them. Further more, with a referral from a friend a sales person has a 50% better chance of making a sale.
Let me take you through an extremely profitable advertising campaign to see if you could avoid falling prey to the liking principle? In the 90’s MCI decided to call and tell you how much money you could save your friend instead of yourself. They increased sales by 20%. This is how the call went:
Imagine the name of your best friend. I’ll use the name Mike.
Sounds pretty good doesn’t? That is the liking principle at work.
The Power of Attraction
If you ever thought, good looking people are lucky, you were right. Take a look at the other benefits of being attractive:
So, one sure way to get paid more and avoid trouble with the law, is to become more attractive. I’ve written an article on a diet plan that helped me lose 63 pounds in 4 months to help you toward that goal.
We Like Ourselves and Compliments
As mentioned before, we prefer people that look, sound, and think like us. So, a company tried to take advantage of that. They told their survey providers to change their name to one that was similar to potential survey takers. So, Robert Greer would be approached to take a survey by Bob Gregar. What happened? They received a 100% increase in compliance!
Joe Girard, who is in the Guinness Book of World Records and is considered the world’s best salesman. How does he make all those sales? He sends out a letter, each month, with 3 words written in it, “I like you.” We find it very hard to say no to a person that says they like us. He also wrote a great book How to Close Every Sale
We Like what is Familiar
In 1980, shortly before the election, an unknown person won the State Attorney General race in Ohio. How did he do it? He changed his name to Brown, a very common name found in Ohio politics. Remember, during periods of uncertainty, we follow these principles. So when these people stepped into the voting booth, they picked the name that was the most familiar.
“Listen to your elders.” “Well the doctor said…” “My boss told me…” These are the phrases that created the next principle used to make decisions, The Authority Principle. We are trained from birth to believe that obedience to Authority is right. Authority figures are considered right because we always assume they have access to the best information.
Studies have shown that by being labeled an Authority others will even see you differently. With each increase in status people perceive others to even grow in height by 1/2 inch. Do you want to increase your Authority level with the perfect outfit:
Once someone is considered an Authority, they gain a level of respect that is almost impossible to say no to. In 1974 Professor Stanley Milgram Proved the power of authority. He placed an ad asking for volunteers to take part in a “study of memory” research study. One person called the learner is expected to memorize a series of words.
The person that volunteered for the study is called “The Teacher.” There job is to deliver increasingly stronger electrical shocks each time “The Learner” makes a mistake. The Professor in his white lab coat says, “While the shocks may be very painful they will not cause any permanent harm.” Here are the results:
Why would someone torture someone else? They had an inability to defy the wishes of the boss, the lab-coated researcher who urged and if necessary, directed the subjects to perform their duties.
The Scarcity Principle
People are more motivated by the thought of losing something than by the thought of gaining something of equal value. Here is an example of how convenience stores sell high priced appliances. They spot someone looking at an appliance and say, “I see you’re interested in this model here, and I can understand why: it’s a great machine at a great price. Unfortunately, I sold it to another couple not more than 20 minutes ago. And, if I’m not mistaken, it was the last one I had.” This is an extremely powerful sales practice.
The Scarcity Principle is also used on people, with the Limited Time Offer. Customers are told that unless they make an immediate decision to buy, they will have to purchase the item at a higher price later, or may lose the opportunity all together. We are hard wired to not allow others to take freedoms away from us. Through the use of the limited time offer, we are meant to feel that freedoms are being taken away so that we buy now!
Here is another example of how the scarcity principle was used to sell more beef:
Corporate stores love to create a powerful enticement to buy, by creating what is called Competitive Scarcity. In turns out that we want an item most when we are in competition for it. People every year trample others, to get the special deal at Walmart. Why? Because they are left to stew for hours surrounded by competitors. Once the door is opened they have claimed that they were so caught up in the moment that nothing would keep them from that $20 DVD player.
That’s All Folks
I’m glad I could share you a bit on how we make decisions. I find this information fascinating. If you have any questions leave them in the comment section below.
Till next time…