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The Right Comparison Can Make All the Difference in Persuasion

Have you ever run five miles? That’s not easy to do if you’re not in shape. How about this — have you ever walked five miles? That’s not as hard as running but can be taxing depending on your fitness level. Do you think it would be more tiring to walk in 70, 80, or maybe 90 degree weather? Throw on top of that playing a round of golf over four hours and it would be pretty tiring for just about anyone.

In 2001, golfer Casey Martin challenged the PGA Tour rule that prohibited golfers from using a cart on the tour. His challenge arose because of a rare blood disorder that caused circulation problems in his legs. Part of the PGA contention was that walking causes fatigue and is therefore an intrinsic part of the game. Casey Marti’s legal team disagreed. From The PGA Tour, Inc. v. Martin Supreme Court case in 2001:
“The District Court credited the testimony of a professor in physiology and expert on fatigue, who calculated the calories expended in walking a golf course (about five miles) to be approximately 500 calories ‘nutritionally … less than a Big Mac.’”

Walking the golf course burns fewer calories than a Big Mac? All of a sudden it doesn’t seem like such a monumental activity. Think about this for a moment; if Casey Martin’s legal team had simply cited 500 calories, the point would not have been as impacting. I’m sure everyone on the court could visualize a Big Mac. Martin eventually won the case.

Sometimes the right comparison can make all the difference when it comes to persuasion. Just using numbers doesn’t always work because they don’t always register for many people. Here are two more great examples of effective comparison points that led to change.

In Chip and Dan Heath’s best selling book Made to Stick, a story is shared about how unhealthy a medium-sized buttered popcorn was in the mid ‘90s. Trying to persuade movie theaters to change was going nowhere despite the fact that the popcorn had 37 grams of unsaturated fat. It didn’t register just how unhealthy that was until it was eventually pointed out how buttered popcorn compared to other foods. Did you know you’d get that much unsaturated fat (37 grams) if you ate bacon and eggs for breakfast, a Big Mac with large fries and Coke for lunch, and then had a steak and loaded potato for dinner…all in the same day! None of those meals is healthy but eating all three the same day with any consistency would eventually lead to obesity. That’s how much fat those who ate the medium-sized buttered popcorn were getting in the mid-90s. Thankfully theaters eventually changed their ways.

McDonald’s coffee case is noted in WilliamPoundstone’s book Priceless. You may recall an elderly woman severely burned herself when she spilled a piping hot cup of McDonald’s coffee on her lap. It led to an eight-day hospital stay for the 79 year-old woman. She won a $2.86 million dollar settlement. While that may seem outrageous, it only came after McDonald’s refused to settle for $20,000. Her lawyer took it to trial and didn’t ask for nearly $3 million. Instead he asked for one or two days of McDonald’s revenue from the sale of coffee. That doesn’t sound so bad except revenue was $1.35 million per day!

One last example came from the late Steve Jobs. He introduced the first iPod, which he pulled out from the front pocket of his jeans, saying, “A thousand songs in you pocket.” Wow, that amounted to more songs than most people had in their entire CD collections!  I doubt Jobs would have been nearly as effective if he’d have said, “10 gigabytes in your pocket.” Even techies wouldn’t be as moved by that as they were when he announced 1,000 songs.

Next time you’re going to attempt to persuade someone, or a group of people, think about the comparisons you would normally make. Then take a moment to consider other possible comparisons that are naturally available. It could be calories versus real food, money or objects money can buy, or songs versus gigabytes. Put the comparison in terms most people can grasp and you’ll have a much better chance for persuasion success.

Sometimes It’s All about What You SAID

I grew up playing football. From the time I was eight years old until I was 18, every year was all about football. Unfortunately I wasn’t naturally big, strong, or fast. As a junior in high school I played outside linebacker at a strapping five foot nine inches tall and weight of 155 lbs., soaking wet.

Then something happened between my junior and senior year. I was taught to lift weights the right way by some power lifters and the difference was amazing! I put on 20 lbs. in just three months and by the time the next season rolled around, I was 30 lbs. heavier than the year before. It made a HUGE difference on the field.

Something my teammates and I were taught during those lifting sessions was the SAID principle. SAID stood for Specific Adaptation to Imposed Demands. What that means in layman’s terms is simply this – you get what you train for. Here are some examples:

  • If you lift heavy weights for low reps you get bigger and much stronger.
  • If you lift lighter weights for higher reps you get a little stronger and more defined (cut).
  • If you practice running in short hard bursts your ability to sprint will get better.
  • If you run at an easy pace for a long time you tend to become a better distance runner.

I think it’s obvious running long slow distances won’t help you get really fast in the 40-yard dash and lifting lighter weights will never make you as big and strong as people who lift massive amounts of weight. You get what you train for.

This philosophy applies to business skills as well. When you work on a particular skill you tend to improve that skill. However, if you don’t work on the skills required in your business you’ll only improve marginally.

For example, walking gives some physical benefit but nothing like running distance or working on sprinting. So why do with think because we use our ears every day we’re getting better at listening? Just because we ask people questions on a daily basis does that necessarily make us good at questioning.

Persuasion is an everyday skill. According to Aristotle persuasion is the art of getting someone to do something they wouldn’t ordinarily do if you didn’t ask. Each of us asks others to do things every day but does that make us good at the skill of persuasion? Having studied the topic for more than a dozen years and working with countless people over that time I can tell you with certainty it doesn’t make you better.

People and companies – some very smart people and very good companies – make basic mistakes routinely. In nearly every case small changes could make big differences. For example take a look at the screen shot from my Starbucks app. Notice anything?

 In psychology there’s something we call the contrast phenomenon. What you experience first will impact what you experience next. When Starbucks puts “No Tip” first then $0.50 they make $1.00 and $2.00 seem much bigger by comparison. I have no doubt if they reversed the order the average tip would be much higher because after debating about the $2.00 tip, $1.00 doesn’t seem like too much. Not everyone will give more but enough will that baristas would do much better after giving their friendly service.

I’ve seen this same mistake made by organizations raising money via donations. Starting with $5 on the donation form then going to $10, $25, $50, etc., will never be as effective as starting with the highest number then going lower.

I could share many more examples but I think you get the picture. As I stated in the opening, doing something routinely doesn’t necessarily make you better at it. Taking time to focus on a skill to get better at it, like a golfer who practices consistently, will help you improve much faster and more efficiently. This is why everyone should take time to learn about the psychology of persuasion. Doing so will help your professional success and personal happiness. Did you hear what I SAID?

 

Anchors Aweigh on You More than You Realize

The human mind is a fascinating creation. With it we move, breathe, consciously decide what to do and subconsciously do things with little knowledge of why or how we do them. With the help of our five senses, our brains help us make sense of the world around us. Despite its wonder our brains can be easily tricked. Consider the following:

The Placebo Effect – Many studies show when people believe they’re taking medicine their conditions improve just as if they took the actual medicine.

Magicians – These clever folks use their understanding of how the mind works to fool audience members into believing objects miraculously appear and disappear. I saw it with my own eyes!

Physical Comparisons – Have you ever gone to pick up something anticipating it was heavy and suddenly it felt light? Or perhaps you went to pick up something you assumed was light and it felt heavy. Ten pounds is ten pounds but sometimes ten pounds feels heavy and sometimes it feels light.

Sales – We’ve all bought things on sale feeling we got a great deal because we saved a certain percentage or dollar amount off of the list price. That good deal doesn’t seem so good when someone else announces they got the same item for even less that we paid!

There’s something that impacts us every day, which we give very little thought to and yet it makes a big difference in how we perceive things and the decisions we ultimately make. What I’m referring to are anchors but not the kind dropped over the side of a ship into the water. In psychology, according to Amos Tversky and Nobel Prize winner Daniel Kahneman, an anchor is “an initial value that serves as a benchmark or starting point for an unknown quantity.”

There are many things in life that we can’t accurately put a value on. For example let’s consider a house. A four bedroom, two and a half bath house with 3,000 square feet, a wooden deck, family room, dining room, kitchen and den might go for $250,000 in a small Midwestern town. The exact same home on an equivalent sized lot in Southern California might go for more than $500,000.

You might be thinking it’s because the market dictates a higher price in California than in the Midwest. No dispute there but the point would be this – the value you put on the home would be dictated in large part by the other values you learn about (the anchors).

Consider this experiment from Tversky and Kahneman.  A wheel with numbers 1-100 is spun and is set to “randomly” stop on either 10 or 65. Let’s say it stopped on 10. Participants were then asked if the percentage of African nations in the United Nations is higher or lower than 10%. Next they were asked to make their best guess on the actual percentage. Those who saw the wheel stop at 65 were asked if the percentage of African nations in the United Nations is higher or lower than 65%. Then they were asked to guess the actual percentage.

For most people, estimating the percentage of African nations in the U.N. is nothing more than a guess. However, those who saw the wheel stop at 10 guessed 25% of the African nations were in the U.N., but for those who saw it stop on 65 the average guess was 45! That’s quite a difference. Each group was heavily influenced by the anchor they were exposed to before making their educated guess.

So what does this have to do with you and me? Think about all the things we’ve encountered over time with little or no thought about how the value was determined other than market forces:

Long distance charges – I remember when 25 cents a minute was a bargain. When charges were dropped to 10 cents we couldn’t believe it! Now it’s practically free on a per minute basis.

Newspapers – Some people still pay to get the weekly and/or weekend edition of their favorite newspaper. Others go online and see the same stories…for free! You could argue the online version is more valuable because it’s portable, updated multiple times and day and doesn’t create any waste.

Movies – We used to drive to Blockbuster and pay $8-$10 to rent two or three movies for the weekend. Now many of us watch nearly unlimited movies and shows on Netflix for just $8 a month.

In each instance what we paid and what we felt was a good deal, or bad deal, was impacted by the anchor because it served as a comparison point.

There are some things we can’t change and have little room to barter on. That’s why most Internet plans are in the ballpark of one another. But when it comes to things like buying homes and cars you should recognize your purchase price will be heavily impacted by a list price for a home or the MSRP (manufacturer’s suggested retail price) for a new car. You would do well to do some research beforehand and go into those situations with your own anchor to start bidding from. And remember this tidbit for negotiations; the person who puts out the first number sets the anchor and most of the time the negotiated price will be close to that number. Don’t let a good deal get aweigh from you.

 

Donald Trump’s mASS appeal

Donald Trump has struck a nerve with the Republican Party, the media, and many Americans. You might say he has mASS appeal. He’s brash, offensive and unapologetic. The Republican Party knows he holds the key to their possible victory or defeat in the 2016 election should he choose to run as a third party candidate. The media cannot try any harder to discredit him and his poll numbers only rise. Many Americans find him offensive but because he resonates with so many, he has to be take seriously as seen by his #1 standing going into and after the first primary debate.

I must confess, when Trump announced his candidacy and made the remarks he did about illegal Mexican immigrants being rapists and murders, I was shocked. I posted on Facebook that Fox News and anyone else who took him seriously after those comments would lose all credibility. I was wrong.

Love him or hate him there’s no denying he’s having an impact on the Republican primary and might do the same in the general election if he remains a strong presence but doesn’t win over the establishment as the nominee.

So why is “The Donald” commanding so much attention? I have a theory. In recent years there have been many television shows which have captivated American audiences such as Breaking Bad, Sons of Anarchy, Dexter, and Mad Men to name just a few. If you’ve seen these shows then you know you find yourself rooting for the bad guy.

In Breaking Bad, the lead character is Walter White, an unassuming high school chemistry teacher who begins to churn out crystal meth after he gets lung cancer. He does so to provide for his family and despite his downward spiral you root for him.

Jax Teller is the lead in Sons of Anarchy. He wants to follow his late father’s ideas to get his motorcycle gang out of drugs and guns. As he manipulates and kills, you still find yourself pulling for him because his ultimate desire is good.

Dexter is the lead in the show by the same name. He’s a serial killer who has learned to confine his psychopathic nature to only killing bad people, the kind that most people feel deep in their heart deserve the death penalty for their heinous crimes. You not only pull for Dexter you actually come to like him.

Much less psychopathic and not a killer, Don Draper is the lead in Mad Men. The ad man is a womanizer and heavy drinker with a past he tries to hide because it could land him in jail. You see a good side of Don shine every now and then and consequently you pull for him despite his character flaws.

In each show we don’t root for the bad guys because we agree with their antics but something about each stands out – we know who they are. We know they’re bad but each really does want something better for himself, his family and friends. By contrast, so many “good” people they come in contact with aren’t actually good and viewers find themselves repelled by their false veneers. In real life think about Tiger Woods, Lance Armstrong and many others who appeared to be good people until the truth was found out. It’s a classic case of the contrast phenomenon.

When it comes to politicians very few people truly believe any of them have our (Americans) best interest at heart. We’ve seen enough scandal (infidelity, drugs, bribes, etc.) that we see them all as having the false veneer covering a desire for power. We wonder when the next politician will fall because it’s only a matter of time.

With Donald what you see is what you get. When asked how he can disavow politicians who take large contributions after he’s made those political contributions, he’s candid when he says (my paraphrase) – “I know how the system works and paying money got me favors I would need down the road. But, I have so much money I can’t be bought.” That resonates with people because it’s truthful.

When the media attacks him and he corrects them for taking something out of context people love that because the media so often appears to look for ways to build up people then tear them down.

When Trump said McCain wasn’t a war hero because he was captured you’d have thought that would be the end. But it wasn’t and his numbers surged despite the media going after it from every angle.

In the end Donald Trump simply continues to be Donald Trump. Some people will love him and some will hate him but at least you know what you’re getting and I believe that’s his mASS appeal.

The Psychology of the Sales Cycle – Negotiations

If you’re like the vast majority of people, when you make a purchase you want to believe you got a good, or great, deal. What’s your definition of a good deal? The deal is really the value you get from the transaction and when I talk about value I use the following equation:

V = WIG/P which translates Value equals What I Get divided by Price.

There are two simple ways to look at it. If I can get more of something for the same price, that’s a better value. If I can get the same amount but pay less, again, that’s a better value.

When it comes to value, getting a good deal, everyone would like to get more for less. We might not get as much as we want, or pay as little as we’d like, but believing the old adage – everything is negotiable – we’ll try our best to get more and/or pay less. And so will your prospects.

Negotiating isn’t simply about lowering your price or giving away more stuff to make someone happy and close the sale. It’s about knowing when to deviate from traditional pricing or when to make concessions that will make both parties better off in the long run. It’s fair to say all the principles of influence and the contrast phenomenon might come into play as you negotiate but a few will stand out a little more.

Liking remains very important because the more the prospect likes you and really wants to do business with you, the better your chance of getting to yes as you go through negotiation points. Continue to remain friendly, bond over things you have in common and offer compliments when warranted because those simple acts will grease the wheel. One study I regularly share in my influence workshops clearly shows people put in a negotiation scenario had a much better chance of avoiding a deadlock if they take the time to get to know each other on a personal level.

The principle of reciprocity describes the reality that when you give, quite often people feel they should give in return. This is very important in negotiations because your act of conceding on some point might cause the other person to make a concession too and you’re now closer to agreement. A concession might be sweetening the deal with something that may not mean much to you but might mean a lot to the prospect. Again, your act of giving is met with something in return. That’s the basis for bartering. The key here is to be the first to take the step to the middle.

Consistency allows you to fall back on what the prospect said earlier in the sales process. If they wanted certain features and those features have a price tag then the reason for the price being what it is might be due to their choices. Reminding them of what they said they wanted is powerful because most people won’t come back with, “I know what I said but I’ve changed my mind.”

Scarcity is closely aligned with consistency because you can always offer to remove certain features to get the price more in line with customers’ expectations or budget. If you recall in the post I wrote on qualifying the prospect, I shared a conversation between an insurance agent and prospective customer. The agent shared a little about business income coverage and the prospect asked to have the price included in the insurance quote. The new coverage will cause the premium to be higher but could be modified in some way or removed as a concession if the prospect feels the price is too high. With a new understanding about the coverage and their exposure, prospects might just find a way to keep it because no one wants to think about an exposure they clearly know is not covered.

Contrast is used to help the prospect see what is being offered is in fact a good deal. If they believe your price is too high you need to figure out what their\ comparison point is. Whatever they have currently might not be a valid comparison point because the features may have changed. If that’s the case you need to move away from the old price and get them to see the value in what you’re offering.

For example, how does being $1,000 higher than a competitor breakdown over the life of a product with a five-year lifespan? Over five years, there are 260 weeks so your product will cost the prospect less than $4 a week. Can you show the prospect how your product is worth much more than the extra $4 a week you’re asking them to pay?

Bottom line – Don’t be offended that the prospect wants more for less. We’d all love to have a Cadillac but it’s not reasonable to think we can get it for the price of a Volkswagen, is it? And so it is quite often in your negotiations during a sale. You need to work with the prospect to come up with a solution that makes them feel their needs were met and they got a good deal.

Next time we’ll look at the part of the sales cycle I’ve seen salespeople struggle with the most – closing the sale, i.e., asking for the business. This doesn’t have to be difficult if you’ve set the expectations early on. Using the principles of influence effectively can make closing a natural part of the sales conversation.

Beware the Lies, Damned Lies and Stats!

Facts, figures and statistics – we’re
bombarded with them. We just came though another election and most of us were
inundated with political ads. It’s amazing how two candidates can talk about
the same facts in such different ways. Democrats touted lower unemployment and
a rising stock market. Republicans debated the legitimacy of both claims when
it came to helping people and the economy. Had the tables been turned and Republicans
been in power they’d have bragged about the declining unemployment rate and all
time highs in the stock market. And it’s very likely the Democrats would have debated those same facts.
Another example; sometimes we hear that average
household income is up. On the surface that’s good. However, if you dig a
little deeper and realize the increase only went to a very few people at the
top and that most people’s income was stagnant or lower, would it still be such
a good thing? Not if you’re in the mass of people who are not benefitting.
As noted earlier, the stock market is at an
all-time high. Again, a good thing on the surface but if the growth in revenue
and profits isn’t leading to job creation then are we (or at least the
majority) really better off?
I’ll never forget seeing the debate over a
potential increase in the state tax for Illinois. One group said it was a 66%
increase and another group said it was a 2% increase. And both were right. The
state tax was 3% and the proposed increase to 5% was raising it two percentage
points but people would pay 66% more in state income tax compared to what
they’d pay without the increase.
I hope you can see statistics can be used to
portray whatever someone wants you to believe. I won’t say it’s unethical
because in each instance facts are being shared but the vantage point can make
all the difference. Two homes could look out over the same land but can have
very different views depending on where each home sits. And so it is with stats.
Mark Twain once said there were lies, damned lies and statistics. His point was simply
this; sometimes facts and figures can be used to justify the position of the
person communicating. As noted earlier, all you need to do is listen to
politicians from opposite sides of the aisle to realize this. They may talk
about the very same issue and you’d think they were from different planets.
You’ll get some very diverse viewpoints if you scan CNN, MSNBC and Fox.
What does this mean for you? Simple; don’t
take everyone or everything at face value. Ask questions, dig a little deeper
into the claims being made, occasionally play devil’s advocate. In doing so
you’ll give yourself a fuller picture and better opportunity to make the best
decision possible.
Brian Ahearn, CMCT®
Chief Influence Officer

 

influencePEOPLE 
Helping You Learn to Hear “Yes”.

Is Rock ‘n Roll Dead or Just More Great Artists?

A friend shared a Rolling Stones article on Facebook not long ago by the former lead
singer of KISS, Gene Simmons. The article was titled, Rock is Finally Dead. It was
Murdered
. In one section Simmons laments, “Where’s the next Bob Dylan?
Where’s the next Beatles? Where are the songwriters? Where are the creators?”
He goes on to blame file sharing and the attitude of the current generation of
young people because they feel they should not have to pay for music.
I posted the following comment to my friend
who was a rock musician in the late ‘80s and early ‘90s. “I’m not too into
music, nothing like you were back in the day, so here’s my question – Could it
be that there are more talented musicians who are exposed to the world thanks
to social media? More supply with stagnant demand would lead to lower prices. I
ask because I’ve come across some really talented people who’ve often made me
wonder why they didn’t make it as big as others who don’t seem to possess any
more talent. Thoughts?”
His reply, “Definitely something to how
fragmented the market is now that the tools to record and promote are in the
hands of the masses. There isn’t the same shared experience as when the
industry controlled things. But that being said, where is the new AC/DC? Who is
this generation’s Led Zeppelin? These acts will never be replaced, but who is
picking up where they left off? Where are the huge acts? It’s never been about
talent as much as what rock-n-roll meant, the experience, the songs. LONG LIVE
ROCK!”
The contrast phenomenon alerts us to the
reality that we always make comparisons to other things. Was Led Zeppelin a
great band? Many would say so in comparison to other bands past and present. However,
some might say the Beatles or U2 are more iconic compared to Led Zeppelin. What
music and musicians we like has to do with our musical taste and comparison
points.
I’m at the tail end of the Baby Boomer
generation. We love rock ‘n roll because we grew up on it as did some of our
parents. But when Bill Haley and The Comets introduced rock ‘n
roll to the world, many folks of that era thought it was trash. They preferred
the soothing sounds of Frank Sinatra, the Glen Miller Band and many other musicians
from the ‘30s, ‘40s and ‘50s.
It’s quite natural for us to make comparisons.
It’s also normal for each generation to believe theirs (music, movies, books,
art, athletes, etc.) was the best and that the current crop has lost their way.
As I told my friend, the more musicians and
sounds I’m exposed to the more I wonder why some acts make it big and some
don’t. It’s not always about talent because many would say Gene Simmons and
KISS weren’t talented musicians, just great showmen.
Golfers play 72 holes in a PGA tournament and
one or two strokes, after 280 to 290 shots, is typically the difference between
winning and losing. Win a handful of tournaments and a player is deemed a star
even though he’s barely better (as measured by stroke average) than most other
golf professionals.
Unlike having to qualify for tournaments, when
it comes to certain artistic talents – like music – social media has knocked
down many barriers to entry. More supply means people pay less, even if some
new acts are better than the old ones, because we have more to choose from and
it’s easier to find what suits us best. We see the same phenomenon with
self-publishing books. With more books on the market to choose from there will
be fewer and fewer books that excite the masses than perhaps 50 or 100 years
ago when there was less to choose from. That might lead to fewer classics in
the future. However, it doesn’t necessarily mean the writers are any less
talented. Some might contend they’re more talented because it takes even more
to stand out now.
So what does all of this have to do with
persuasion? Each of us competes in the marketplace. For some it’s finding a
mate, for some it’s on the athletic field, others it’s business. Whatever we
do, wherever we do it, the challenge is to rise above the rest.
  • Why will someone want to hire you over the
    other bright young college grads?
  • Why should someone buy your music over the
    other artists?
  • What makes you stand out in your chosen field?

 

Until you can answer these questions you’ll be
perceived just like all the others because people will be making comparisons.
Your goal has to be to highlight your uniqueness. It’s a form of scarcity. What do you bring to
the table, or what combination of things do you bring to the table, that will
make someone realize they can’t get what you offer anywhere else. Once you
convey that to the right people you’ll stand out. You may not be the next
AC/DC, Rolling Stones or Beach Boys, but you’ll probably find your place and
enjoy your lifestyle all the same.
Brian Ahearn, CMCT®
Chief Influence Officer

 

influencePEOPLE 
Helping You Learn to Hear “Yes”.

The Scoop on Ice Cream and Persuasion

I’ve traveled a lot this year and have a lot
more trips coming up. If my travel schedule plays out I’ll have been on the
road half of the weeks this year and spent at least 50 nights in hotels. Think
about that– 10 weeks away from my family! Some days have entailed hitting the
road by 4 a.m. to catch early morning flights and arriving home close to
midnight. If you travel you know if can be tiring!

Last month, as I waited to catch an evening
flight home I got a text from my daughter, Abigail, asking if I wanted to get
some ice cream at Graeter’s when I landed because she wanted to tell me about
her first days of college. Despite being tired I agreed because I don’t view
such times as a sacrifice; rather it was an investment in her and our
relationship.
As we waited in line I tried to decide what
flavor I was in the mood for and whether I’d go with a single scoop or a double.
If you’ve been to Graeter’s you know the ice cream is great but you pay a
premium for it!

As I looked at the menu I saw a single scoop
cone was $2.95 and a double was $4.25. I thought, “I just bought a half gallon
of really good Homemade ice cream for just over $5,” so I was reluctant to get
two scoops at that price. The other thought that raced through my head was,
“That’s almost twice as much.” When you do the math, you know it’s not twice as
much, but my mind quickly registered the $2.95 and $4.25 as $2 vs. $4 because
those are the numbers each price started with.

Something else that came into play as I
decided what to do was the fact that I was still a little full from dinner a
few hours ago. I decided to skip the cone to save a few calories so I asked for
a single scoop in a cup. The server said, “Would you like a second scoop for
just 50 cents more?” I recall thinking, “For 50 cents why not, that’s a good deal?”
because in my mind the option of going from one to two scoops was twice as much
ice cream but not at double the price.
As it turns out, the single scoop in a cup was
$3.75 and two scoops were $4.25…the same prince as the two scoops in a cone
that I’d just decided to pass on! It was only a 50-cent difference but in the
end I got two scoops…no cone…and paid the same amount I’d mentally rejected
moments before!
I read lots of books on the subject of
persuasion, pricing, etc., and yet I ended up in the very place I was initially
trying to avoid. Before you chuckle, I can assure you I could probably spot
similar inconsistencies in some of your decision-making.
So what happened to me? My focus shifted from
“two scoops for nearly double the price” to “a second scoop for just 50 cents
more” when in the end, the price was $4.25 in each case!
When we make decisions we rarely do so in a
vacuum. To assess a “deal,” we’re always making comparisons to other things. My
first thought was two scoops for about the same price as a box of ice cream is
not a good deal. However, knowing the first scoop was pretty expensive, getting
a second scoop for just 50 cents more seemed like a great deal. My mistake was
that I didn’t pay close attention to the price of a single scoop in a cone vs.
the price of one scoop in a cup. I mistakenly assumed getting ice cream in a
cup would be less expensive, certainly not more, because I couldn’t eat the cup.
So here’s the “scoop” next time you’re faced
with a similar decision.
  1. Try to remove your emotions from the decision.
    Many behavioral economics studies show people are emotional creatures that
    occasionally make rational decisions (i.e., We have five TVs but I want a 66-inch
    flat screen!).
  2. Recognize you’re always making comparisons to
    other things. Make sure you’re comparing to the right thing and don’t just look
    for something that will confirm what you emotionally want (i.e., I know we
    don’t need another television but it’s 50% off!).
  3. Take a moment to consider the value of the
    thing you’re considering regardless of what you’re comparing to. Value is
    subjective but oftentimes we ascribe too much value to things we believe will
    make us happier or more fulfilled (i.e., What will the 66-inch screen, even if
    on sale, really add to your life?).

Follow these simple steps and you’ll probably
make better decisions; the kinds you look back on with pride, not regret.

Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.

 

The Ticket is How Much?

I’m sure to spice up your home you have
pictures scattered throughout different rooms. We usually display pictures that
speak to us or make us feel good in some way. Those who are into art are very
aware that the frame a picture sits in can make a huge difference. The right
frame can really help a picture come to life.
Framing doesn’t just apply to your favorite
pictures. In psychology, framing has to do with the context that surrounds an
issue or idea. In the same way the right frame can make a picture stand out,
proper framing of your ideas can make them stand out and that’s important when
you’re trying to persuade others.
Not only is framing important, so is reframing.
You see, sometimes we need to reframe issues that are presented to us in order
to have the best opportunity to make the right decision. Allow me to explain.
Not long ago I went to an event with my boss and
good friend John. As we chatted he told me that he was invited to a play his
niece was going to appear in. The relative who invited him said tickets were
only $12 and could be purchased online. John went online to purchase his ticket
and was confronted with additional fees that increased the ticket price from
$12 to $21. He couldn’t get beyond the fact that just because he was buying it
online the cost was 75% more than if he went to the theater and bought the
ticket in person. Of course there would be some risk buying the ticket at the
theater because the show could be sold out and he would have wasted time and
gas money. Nonetheless, he was adamant that he wouldn’t pay an extra $9 (75%)
for the ticket.
As we discussed this I finally asked him, “If
you were told the ticket was $21 would you have bought it?” He said he would
because he wanted to see his niece but was just having a hard time with how
much the extra fees came to. I suggested he just reframe the whole scenario and
look at the price as $21, not $12 plus an additional $9.
It’s natural for us to make comparisons like
John was doing because seldom do we operate in a vacuum. It’s also natural to
rail against the comparison when it’s so large. As I’ve shared before – There’s
nothing high or low but comparing makes it so.
Think about this – If I offered you $800,000
would you be willing to accept it? I bet you would and I bet you’d be incredibly
happy. However, if I give you $2.1 million and you only got to keep $800,000
because of taxes, you might not feel the same as getting $800,000 with no
strings attached.
In both cases, at the end of the day you’d
have $800,000 but in one scenario you’ll have a hard time enjoying your new
wealth to the same degree because you’re thinking, “But it was originally $2.1
million.”
We face these situations all the time. I
travel a lot and spend a good bit of time in airports. Most airlines now charge
$25 per bag each way, which means most people pay an extra $50 on top of the
ticket price. People detest that because it raises to the surface the pain of
paying. Airlines might be wise to either incorporate a smaller fee for all
passengers or allow you to pay for bags at the time you purchase your ticket. That
way you don’t feel the pain of paying when you get to the ticket counter and
the extra fee is an afterthought.
On the flip side, if you want people to feel
the pain of paying in order to bring about change then you might want to
separate the fees so they can clearly see them. An example would be gasoline
taxes. Did you know in 2012 the average fuel tax for Americans was 49.5 cents per gallon, for state
and national taxes? Sometimes there’s a sign at the pump mentioning the
additional taxes but people really just pay attention to the price per gallon. If
gas were $3.19 per gallon in your area it would be under $2.70 per gallon
without the tax. If you really want to highlight the issue of taxation, tell
them they’re paying  $2.70 a gallon, but
let them see the meter add on 49.5 cents for every gallon; this just might just
catch their attention. After all, most stores advertise pre-tax prices.
How you frame your presentation depends on
what you want to accomplish. By the same token you have the power to reframe
anything and sometimes doing so will allow you to feel better about the
situation you find yourself in. For John it would be acknowledging the fact he
would gladly pay $21 or more to see his niece perform instead of focusing on
the $9 fee that increased his ticket price by 75%. In the end he’ll enjoy the
play a little more and his niece will be happy that her uncle came to see her
perform.
Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.



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Does a Rising Tide Lift All Boats?

People are fond of analogies that help them
visualize concepts that are sometimes difficult to grasp. Steve Jobs was use one when he said, “Computers are like a bicycle for our minds.” Another common analogy is people describing the human brain as a computer.
One analogy that’s kicked around quite a bit
in politics is this, “A rising tide lifts all boats.” That’s easy to picture.
After all, when the tide rolls in all boats sit higher relative to the docks they’re
tied to or some other stationary object.
Politicians like to use the phrase when it
comes to the economy. If more tax cuts are given to the wealthiest people
they’ll spend their extra money creating jobs or buying more stuff. Either way,
more goods are sold which means more people are employed to produce and sell
those goods. Everyone is better off; all boats have been lifted.
But there’s a problem. The analogies we use
are just that – analogies. They’re merely comparisons to help us understand but
they’re not the actual thing. In one sense they’re like a map. A map can be a
helpful tool but it’s still a map and not the actual terrain. It can never
fully represent the real thing and the more diverse the terrain is, the less a
map can fully represent it.
People who use the rising tide analogy want us
to believe everyone is better off when the wealthiest among us do better. There’s
some truth to that however, it ignores a basic tenant of behavioral economics –
how we make comparisons and decisions.
You see, most people don’t simply look a their
situation relative to how they were at some point in the past. Rather, we have
a habit of comparing ourselves to others in the moment.
We see this publicly played out in sports all
the time. Let’s say an athlete has a great year and gets a huge raise because
he’s considered among the best in his sport. He’s happy! But the moment he
learns someone else just got more money, discontentment sets in. No longer does
he care that he’s making significantly more than he used to. Instead he feels
slighted compared to the other athlete he just learned about.
The same can be said of the average American.
While many may be a little better off than they were five or ten years ago based
solely on their income they don’t necessarily see it that way. That’s probably
because they’re not simply comparing their take home pay to prior paychecks. In fact, if inflation, medical bills or other
things that occur in life have eaten away at their take home pay, people tend
to feel they’re working harder than ever but have little or nothing to show for
it.
Another comparison point comes when people
hear about senior executive compensation at large corporations. For example,
did you know back in 2005 the average CEO made 525 times more than the typical
American worker made? That pay differential took a significant dip due to the
recession but it’s trending back up and was 369 times more in 2012.
Can you see why someone might be disgruntled?
Most people have an innate sense of fairness, and of right and wrong, and when
that gets violated many people would rather get nothing just to see the other
person get nothing too. It doesn’t make economic sense because economically a
little bit of something is better than a lot of nothing.
Several years ago I conducted survey with my
blog readers. One question read: You’re playing a game and your partner was given $100 to share with you any way they see fit.
The two of you get to keep the $100 but only if you think you’ve been treated
fairly. What’s the least amount you would want in order to not reject the deal?
Just over two thirds of the respondents said
sharing $50 of the $100 would be fair. The average for all responses was
$41.88. Even though they’d have been better off even just getting a dollar, the
vast majority would reject the deal if the split wasn’t about equal.
It doesn’t make sense economically because if
you were given $30, $20, even $1 that’s better than nothing, and more than you
started with. But that’s not how most people typical think and behave. When people don’t feel
they’re being treated fairly they take action…even if those same actions might
hurt themselves in the end.
The tide may be rising but all the people in
the little boats stare at the luxury liners and perceive those ships are getting the
bigger lift and they don’t like it.
My fear is this; if our government in
conjunction with big business doesn’t come up with ways to make the average workers
feel like they’re being compensated in a more equitable way, the consequences
could be worse for all of us in the long run. Whether or not you agree with the
“We are the 99%” and March on Wall Street movements, they reflect what I’m
talking about here. People are unhappy and they’re starting to take action.
A take away for those of you who aspire to be
more effective persuaders would be this – whenever you use analogies to make a
point, make sure the analogies are appropriate for your audience or your best laid
plans could backfire on you.
Brian Ahearn, CMCT®
Chief Influence Officer

 

influencePEOPLE 
Helping You Learn to Hear “Yes”.