The Art of Negotiation: Six Must-Have Strategies: Gillian Ku (Transcript)

So they’re printing out these return address little stickers and obviously this is incredibly cheap for them to do. You can only imagine that all they need is a color printer, they need to have bought some stickers from Office Depot, and then they’re printing them out en masse and then they send it to you.

And now you receive this thing and oh my goodness, it’s a personalized gift. How thoughtful of them. And then they kick in this idea of reciprocity and now you feel a slight need to do them a favor in return. There are many other examples of this.

So this idea of like, is it really a free gift in the mail? I mentioned this idea of reciprocity in negotiations, right? Giving some information to get information. But I’ll give you another example. So this is a study that was done some years back and they were trying to figure out how to get people to respond to surveys. So I don’t know how many of you guys either have to do customer surveys or even in-house surveys where you’re trying to get your employees to respond to you, but this is an interesting one.

So this company was interested in trying to understand, not this company, sorry. These bunch of researchers were interested in trying to understand how to get people to respond to surveys. So what did they do? They had two groups of people and one group of people, they sent out this survey and they said, hey, we’d like for you to complete this survey. It’s really important for us. You’re all part of this organization. We want feedback from you. And if you complete the survey and send it back to us, we will send you a check for $25. I mean, $25, it’s not a small amount of money. It’s a decent amount of money. I could get a very nice lunch or a simple dinner for that. Okay, I can work with that.

And then in the other condition, what they did was they sent out the survey and they said, hey, we’d really, really like for people to complete this survey. Here’s a $5 check. It’s yours to keep whether you complete the survey or not, but we’d really like for you to complete this survey. People were much more likely to complete and return the survey in this condition.

Now, cynics in the room are probably going, hang on a second. I’ve just sent out like a lot of $5 checks. Am I in a lot of trouble now? Interestingly, no. People in this condition tended to be honest. They tended not to cash the check unless they actually completed the survey.

So this idea of reciprocity was, one, more effective, and two, more cost efficient than this idea of, hey, you do something for me, then I do something back for you in return. So this idea of reciprocity is quite powerful. Any ideas that you guys can think of around reciprocity? Ideas of how you’ve seen it play out in your lives or in your organizational lives?

[Audience] I guess whenever you get promoted, it’s kind of a credit of trust because what got you here will not necessarily get you there. And if you get promoted, sometimes in some situations, it may mean that you’ve had this credit of trust from your boss or shareholders or whatever that you have to justify, basically. So that was my personal experience.

Yeah, no, I can see that. So interestingly enough, you’ve done the work to get the promotion, but even then, they’re giving you this promotion, and now there’s this sense that, oh my goodness, I really, really need to do good by them for putting their trust in me. Okay, thank you. Anything else that you guys can think of? Any other examples that you can think of?

I’ll give you a funny example, but this also gets a little bit at how, as we start thinking about how to use influence, it’s also, I think, interesting to think about how it is that we make sure that it’s not being used against us, okay? So this one’s a funny example that puts those two ideas together.

I’m Singaporean originally. I know that my accent is now completely muddled. I lived in the U.S. for a long time. I lived here for a long time. I don’t know what I sound like now. But in Singapore, one of the things that we celebrate is Chinese New Year, and during Chinese New Year, and this is a very Singaporean custom. It’s not even necessarily a more broadly Chinese custom, but in Singapore, when you celebrate Chinese New Year, you go visit all your friends and family, which is the same across China.

But the unique thing in Singapore is that when you do this, you bring two mandarin oranges to your host’s home, okay? And it’s two mandarin oranges because the word for mandarin oranges in Chinese sounds like gold, sounds like fortune. So in a very Chinese way, they’re playing on this linguistic thing to say, I’m bringing you fortune, okay?

So what happens is that you go to your host’s home, you bring two oranges with you, you give them to them, and they now immediately feel the need to do you a favor back in return. So what do they do? They go to their kitchen, put those two oranges down, take two oranges, and give them back to you. So you started with two oranges. Now, you know, five minutes later, you’re back with two oranges.

So then you repeat this process as you visit the houses, right? So you visit the next house. Hey, you still have two oranges. So you give it to your new host. Your new host gives you new oranges back in return. You still have two oranges. So you keep doing this process of giving favors and then reciprocating, such that at the end of the day, you still have two oranges. You started with two oranges. At the end of it, it might not be the same two oranges, but you still have two oranges. And it really is a very ritualized version of this reciprocity process, okay?

But it’s also how it is that people are trying to null out the effects, right? So if people are trying to do you favors and curry favor with you, this is an instance of how it is that you diffuse these reciprocity influence tactics. Can you guys think of how else you might, you know, try and diffuse these tactics if they’re being used against you?

[Audience] I suppose if you’re a Scot, for your two oranges, you’d give two lumps of coal.

Well, I remember when I was a kid, we used to have a tradition that you went outside the house with a piece of coal, and you came back inside the house when the clock struck twelve to welcome the new year. Okay. Am I right? Yeah. Okay. I see.

Okay, okay. Good evolution of a tradition, okay? Other ideas of how you can see this sort of like if somebody is trying to use this influence tactic against you, how you would try and null out these sorts of reciprocity influence tactics? You could pay for it or decline to accept it. Mm-hmm. So you could pay for it or you could decline to accept it. But my guess is that in an organizational situation, well, in most situations, that could come across as kind of rude, right? So, yes, you can try that, okay, but be careful that you don’t offend your counterpart. Other things that you could do? Just classically, if someone’s bought me lunch, you can have lunch next time. It’s something as simple as that. Absolutely, right?

So there’s just a sense of tit-for-tat, you know, down the line

, I remember it’s my turn to pay for lunch or dinner or whatever, or drinks. Somebody had a… Sorry, I’ll answer some of the questions. How do we protect ourselves? Yeah. Exactly, right? Accept with grace. Okay. Be aware that that’s what they’re trying to do. Yes. And steel yourself mentally to go against social norms. I don’t dispute this.

So in some sense, as we go through all these different types of influence tactics, that is the advice that will be consistent for many of them. But I’m going to present to you some research that basically says, you know what, sometimes that doesn’t work as well as we’d like to think that it would. And in that regard, it’s therefore even better to have other ways of tackling them. My guess is that, for instance, within an organizational setting, many, many, many of you guys will have rules within your organization that say, I can accept this gift but not this gift, a certain value of gifts or there’s certain things that I can’t do. These organizational boundaries are there in some sense because sometimes just us saying, I understand what they’re doing and I’m not going to fall prey to it is not necessarily sufficient. So some things that we can do, as I said, you could try and reject the gift, but it could be, it’s not necessarily easy or it could be seen as impolite. We could be exactly this, right? Accept the gift but kind of be wary of what’s going on.

And again, that can work. Don’t get me, I’m not trying to say that it won’t work, but I’m just saying that it’s not as easy as it might sometimes be. Whenever this happens to me, I generally like to have a ready excuse. I go into a shop and I’m trying to buy something and they offer me a coffee or whatever it might be. Thanks, I just had breakfast. I don’t need anything right now. That doesn’t necessarily stop them from still trying to really like force the stuff on me, but at least if I have a ready excuse, that potentially helps me to overcome their influence tactics. That’s reciprocity.

Let me give you some other ideas to think about. Another tactic that Cialdini talks about is this idea of commitment and consistency. The idea of commitment and consistency is that once we make a decision and we head down a particular path of action, we feel the need to be consistent with that course of action. And this can happen even if we get negative feedback about our actions. And it’s particularly effective if the commitments are done in a very active public way. You can imagine. If you stand up and immediately start saying things about, New Year’s is coming and I’m going to make a resolution to start going to the gym. If you make that sort of public commitment, it becomes much more effective in ensuring that you become consistent with that course of action down the road.

So I have another example. A bumper sticker. So not as common here again, but again this is potentially a bit of a US example. But when I was in the US, I remember seeing bumper stickers for every which cause that was out there. But beyond that, for children’s schools, always like proud parent of whatever school. Why do people do that? Why are these bumper stickers so prevalent? And then election time, also very, very prevalent. Why are they out there? Can you say something about your personal brand to define what you present to the world? Okay. And then what happens when that brand comes knocking on your door for money or your time commitments or something like that?

You’ve defined, this is exactly, you’re exactly right. You’re spot on. You’ve defined yourself as that is part of your brand. So when that brand comes saying, I need your help in terms of time, whether it’s for your children’s school or money for saving the whales or whatever it might be, you’re much, much more likely to do that.

Another example, and this one is, I like this example because it really kind of combines a couple of these different influence tactics. And one of the things to think about if you’re trying to go around influencing and persuading other people is that if you can tap into multiple of these principles, whatever you’re doing becomes ever more powerful because it fundamentally means that it’s leveraging off of different psychological ideas simultaneously. So, example, how many of you guys have been, let’s say on the plane and you’re reading some sort of magazine and you see in the magazine this little tear off thing that says, you can get three weeks or three issues free of this magazine. And then after that, you have to start paying.

How many of you guys have seen that? Yeah? How many of you guys have signed up for that? Okay. And tell me a little bit about… I did remember to cancel. You did remember to cancel. Well done you. So how or why did you remember to cancel? I put a note in my diary. You put a… Because otherwise I wouldn’t have done.

But this to a large extent is this idea of commitment and consistency. But there’s also reciprocity, going back to what we just talked about. They’re giving you three free issues or whatever it might be and then there is also the hope that, hey, I’m reading this. I’m reading whether it’s National Geographic or The Economist or whatever it might be. And especially, come on, let’s say The Economist. I’m reading it now. Wow. I’m feeling so smart for reading The Economist.

And you know what? You know what? I want to be that smart person who reads The Economist. So when it comes time to renew my subscription, sorry, to actually start paying for my subscription, I’m quite likely to do it because I’ve coded myself as a person who reads The Economist. But honestly speaking, I don’t know about you guys, but The Economist comes out, what, once a week? It takes me a month to read each issue, right? So there’s this giant backlog of economists sitting on my desk and I’m still shelling out money because I’ve coded myself as somebody who reads The Economist. Other examples that I have for you for this idea of commitment and consistency.

So we talked about bumper stickers. Petitions are very similar in nature. Has anybody heard of the foot-in-door technique? I hear laughter. So I’m hoping with our new guest who’s just joined us, feel comfortable sharing a little bit. No, no, no. Sorry, I’m putting you on the spot. But you were laughing. Do you want to tell us a little bit about this foot-in-door technique? Make sure you’re on the inside before people know actually what you’re talking about. Kind of. Yeah, anybody else familiar with this tactic?

It’s done from brush salesmen. So if you’re selling brushes, you have a suitcase of brushes, you need to knock on the door with the housewife obviously. You do that by saying, I bought this brush, would you like to see what else I’ve got? Yeah, so thank you. That’s pretty much this idea that it came about when people used to go door-to-door selling stuff, whether it’s brushes or whatever it might be. And the idea is simply that, hey, if I can get my foot in, I can get the rest of myself through the door. Because once you’ve committed to letting me just get in a little bit, I can open that door further. There was a study done in, and this is an old study, but it’s a beautiful study done in the 1960s to examine this foot-in-door technique.

And I have to tell you about it because it’s kind of amazing. So this was done in California and they were interested in getting people to put a big, ugly sign saying drive carefully on these people’s front gardens. And they were kind of curious about how to get people to comply with this request. And so in one condition, they knocked on a bunch of doors in the neighborhood and said, hi, we’re very interested in people driving carefully in your neighborhood. Would you be willing to put this big sign, which was very, very ugly, on your front garden? People looked at the sign and were like, hmm, not so much. Okay, 17% of the people here said that they were willing to put this big, ugly sign on their front gardens. The other condition, they knocked on the door and said, hi, we’re very interested in people

driving carefully in your neighborhood. Would you be willing to put this little sticker saying drive carefully on your window? Everybody said yes. I mean, this is a neighborhood, people have children, they wanted people to drive carefully. So absolutely, everybody said yes.

Two weeks later, knock, knock, knock, would you be willing to put this big, ugly sign saying drive carefully on your front lawn? 76% of the people said yes, right? Versus 17% from the other condition. So think about a time when if you’re trying to get somebody to do something for you and their initial response is no, no, no. Think about whether you can make a smaller ask initially because that may be the way to try and get them to do the big ask later on. This is this idea of commitment and consistency. How do we prevent from, well, I’ll give you one more idea. There’s a very, very powerful area of literature that talks about something called escalation of commitment.

Okay, escalation of commitment refers to a phenomenon where if people make investments, typically money, but also time or energy, in a particular course of action and then they get negative feedback, people typically feel, people typically reinvest in this failing course of action because they feel the need to be consistent with their initial choice, right? So from an economic standpoint, this is considered irrational. It’s considered throwing good money after bad. You’re supposed to ignore sunk costs and people are honoring sunk costs. And this escalation phenomenon has been used to explain anything ranging from R&D investments to commitment to personnel, right? So you hire somebody, they’re not working out quite right. Well, we could ask them to exit or we could give them more training. Well, let’s give them more training and more training and more training even though maybe we should be thinking about exiting them gracefully.

It’s been used to explain the Vietnam War. It’s been used to explain even things like the amount of time that basketball players have on court. So these analyses try to control how good these players were. But even then, if these basketball players were recruited with a big lump sum of money, they ended up having more playing time on the court. Understanding all of this, how do we try and prevent some of these things from happening? How do we ensure that the decisions that we’re making are good decisions and not biased by these initial commitments that we make? On the escalation of commitment, what way is it giving yourself a stop loss position, looking at data rather than general how do you feel about a situation? Agreed.

So being very concrete and objective in your data, I will say that research has found that the way that we look at the data becomes biased too because of this, right? So I hear you and I agree with that. The stop loss is this bottom line, this reservation price, this reminder that I need to stop, which I also agree with. So this is very difficult to prevent and you need to try many things.

So these are good, but may not be sufficient. Other things that we can do? Very good idea, right? So what’s happening is that if I make the initial choice to invest resources in a course of action, I’m the one who feels as though I need to be consistent. But if I have a neutral third party make the reinvestment decision, so a colleague who can help me with my thinking, help me analyze the data, that can be very helpful because this colleague is not burdened by the same need to be consistent with initial commitments. Other things that you can think about? This is one of those where we say ignore sunk costs, right?

So this gentleman was very, very rational and say, well, we need to kind of understand that these things are happening to us and we just need to say no. And my dissertation from many, many, many years ago was looking at exactly this idea. When it comes to these sunk costs, can we just say, you know what? We just need to ignore them. We just need to understand that they’re there and ignore them. The problem is that we don’t go around saying, ooh, let me look out for sunk costs. Ooh, let me beware of sunk costs. And then the next thing you know, the sunk costs hit you and then you feel this need to be consistent. This is why these principles are as potentially tricky as they are.

Yeah, so some ideas there. Let me give you more things to think about. So we talked about reciprocity. We talked about commitment and consistency. There’s this idea of social proof, which is this notion that when the course of action is… Please, sir. Sorry, can I just go back onto the last one? Yeah. How do you defuse a third party committing, where you’re seeing that they’re committing to something and you want to try and defuse a third party situation, committing to something which you don’t find difficult? And just as a throwing an example out, my wife, who might… Now, now. So what’s interesting is, I mean, you know, this is something that happens in all our relationships. And actually, I can see when she says something out loud, I’m like, damn, that’s a public commitment. She’s going to kind of reinforce that so that there aren’t any kids you can’t provide, which is how do you defuse that situation? So without asking for more specifics, which I’m not sure I can deal with, I would say that you want to try and find a graceful exit, right?

So a graceful exit, a graceful way to back out from that commitment. But the other thing, too, is to find an alternative. So a lot of these types of commitment and consistency things, in your head, it becomes go, no go. It becomes invest, not invest. It becomes let the person in, don’t let the person in. But if we can think of an alternative path, an alternative, acceptable path, then all of a sudden, the thinking becomes different, and it’s not so binary. It’s not so, oh my God, I have to do this to be consistent. Wait, hang on a second. Maybe there’s this alternative thing that I can do instead. So without the gory details, those are my suggestions. Yes, yes, yes. In a face-saving manner. For you as well, probably.

Okay, so social proof. Social proof is this thing that when the course of action is not completely clear, we very often look to other people around us as to what it is that we should do, and we follow them, right? We’re much more likely to follow people who are like us, who are in close proximity to us, and this can result in a lot of interesting things. So the difficulty with doing these sessions is that I have so many examples to share with you, and I’m like picking and choosing amongst my kids, but this one I have to choose. So laugh tracks. Do we know what those are? The canned laughter, right? So in a lot of TV shows, a lot of these sitcoms, there’s this canned laughter in the background. Who here finds it annoying? Yeah, okay. But why do sitcoms, why do the studios do this? Because it works, and it’s particularly effective if the show is ambiguously funny. If somebody else is laughing, you find that funny too. So it’s just something to keep in mind.

How do we get somebody to do

something? Well, tell them everybody else is doing it, and we see this happening a lot of times. It’s like this happens with trends. It happens a lot in marketing where they try and say, look, everybody likes this, and when that happens, there’s a sense of, oh, I must like it too. Within a more business example, these sorts of social proof ideas have a lot to do with both auctions themselves. So if somebody’s bidding, right, you’re not very sure whether this has value or not. If somebody’s bidding, okay, you bid too. But then as a result of that, it has implications for things like M&A. So my husband’s a banker, and what do they try and do? If you can get one interested party, two interested parties, you’re done. There will now be a whole slew of people who are interested in buying this company because these ideas of social proof kick in.

Please. Also when you do use some quotes or paraphrase somebody else, you’re trying to get this social proof to say not only me, but also there’s a quote or somebody else. Exactly. So you are trying to show that your idea is not only yours? Yes, absolutely. And then very often too, it goes beyond social proof, but we pair it with this idea of we pick the people whose quotes we use. It may be a celebrity or somebody very cool because we want to be like these people. So it’s again pairing different types of influence tactics together. But absolutely. Yeah. In a meeting with Japanese executives of a Japanese company, if you want to put forward a new idea, the best thing to do is just talk to each of them before the meeting and present the new idea to each of them. Get them to think that the idea is great and present it as new to the whole meeting and there’s more chance that it’s going to be accepted. So thank you for this. I know that it may be particularly relevant in a Japanese culture, but it’s true the world over, right? If you’re trying to sell an idea, trying to sell it first time in front of a big group is not necessarily the easiest thing to do.

Whereas if you can get a bunch of people offline to buy into your idea, then to hopefully publicly support, one or two of them to publicly support you in the big room, you’re much more likely to get a momentum of people who are voting in your favor. Again, bringing in things like Brexit is where it becomes pertinent. How do we prevent some of these things from affecting us? Unfortunately, the research doesn’t necessarily have great ideas here.

So we just have to kind of say, look, you need to understand your motivations for doing something. Don’t just follow the crowd, right? And when I say this, for those of you guys who have kids, I mean, this is really particularly pertinent, right? So kids just kind of follow fads and trends and you’re trying to get them to be individuals and to understand what’s going on. This is consistent with some of these ideas. This one’s easy to understand but really, really powerful. We like to say yes to people whom we like, which means that we want to be likable in some sense. And what makes us likable?

Well, there’s a lot of research that shows that people who are physically attractive are more likable. People who are similar to us are more likable. So if somebody comes from the same town, same city, same country as you, more likable. If somebody has the same name as you, research has shown that even if you just tell them the same name, all of a sudden you don’t know anything else, you’re more likely to trust them. I don’t know why, but there you go. We like that. We like our names, so we like other people who have the same names as us. People who compliment us, people who are associated with positive things.

I’ll give you some funny examples. Who are these guys? Arnold. I’ll be back. Who’s the other guy? Somewhat? Some Arnold. No. Cruz Bustamante. Now, you might remember that the Terminator became the governor of California. This happened during this recall election, and there were a lot of people who ran for these recall elections, but the other big contender was this guy, Cruz Bustamante. Now, Cruz Bustamante, as it turns out, was extremely qualified for the position. He was the lieutenant governor. He’d been a public servant for many, many years. In fact, up until that time, he was the highest-ranking Latino in public office. But he didn’t win the election. The famous Hollywood star won the election. This goes towards this idea of liking, especially since the vote was happening in California. This is the Hollywood world. People know him. People like him. He represents all these cool things. He’s married into the Kennedy family, or was at that time. Was.

And then things happened. Another example. Some of you guys might be aware of this. In the presidential elections in the U.S., the taller of the two candidates tends to win the electoral vote. It’s a little bit messier with the other vote, but we like tall, apparently, or tall symbolizes, I don’t know, power or authority or something, and we tend to vote in the person who is tall, which is really bizarre. It’s like, what does somebody’s height, and I feel bad for myself, have anything to do with somebody’s ability to be president? Not a whole lot, and yet, the taller candidate tends to win the U.S. presidential election.

Now, some of you guys then are thinking of world leaders who may not be as tall. Sarkozy comes to mind, or when he was in power, and I don’t know how much you know about Sarkozy, but one, first of all, he was quite short, but he tried really, really hard to make himself tall. So there are pictures, and if you Google it, you’ll see it. There are images of him standing on boxes in front of podiums, so if there’s a lectern and a mic and everything, he’s standing on a box. There are press conferences of him in some sort of company, like opening a new factory or something like that, and the story goes, they called around the entire organization, looking for the shortest members of the organization to be in the photo shoot with him so that he wouldn’t appear quite so short. So there is the sense that I want to seem tall, and being tall conveys good things that people like, bizarrely enough. So I don’t know whether he had huge shoes, but yes, he again, notoriously short, right? I was just about to say, Kim Jong-il, there are pictures of him with these lifts in his shoes, but it’s to try and appear tall.

Thoughts, questions, examples? Is that considering like-for-like ID, when you’re looking at men as opposed to men versus women? So, very good question, right? So at least

with regards to these data, except for the last elections, it’s always men between men, so we don’t know, and then the caveat that I often give, especially with these data, is who knows nowadays, because it’s becoming more complex with gender coming into play, with race coming into play. That said, a big picture, there’s generally a big main effect where, and this is very unfortunate, and a whole different story, men are generally perceived as more competent, so it is going to be like-for-like, but there is also just a sense that men are more competent than women, which I beg to differ on, but separate story. I’m going to share with you two other principles. The second last one is authority. We tend to say yes to people who are in positions of authority, or seem like they’re in positions of authority.

So, studies have been done, and it’s really scary, where somebody dresses up like a doctor, so they put on a lab coat, they put on scrubs, they have a stethoscope, and then they’ll go into a hospital, they’ll find a nurse, and start giving random instructions to the nurse on how to take care of patients, and the nurses very often say yes, and follow through with the instructions. Obviously, they stop the nurse before bad things happen, but the idea is, this person seems like an authoritative figure, and therefore people say yes to what they’re saying, or what they’re asking for. Same thing happens with regards to a lot of these, when people start investigating what’s happened with airplane accidents, very often it has to do with the dynamics between the co-pilot and the pilot. So, you guys may remember some years, maybe five years ago, there was a plane that, I think it was a Korean Airlines plane, that landed in San Francisco, and thankfully people were generally not hurt, not that many fatalities, and the plane managed to land fairly safely. And what happened is that they found out that the sun was in the pilot’s eyes, but the co-pilot didn’t want to put down any sort of shades or wear sunglasses, because he thought that that might be disrespectful to the pilot. And as a result of that, these sorts of crazy things happen. Now, I put out these examples, and especially for you guys, because it’s useful to think about it from two ways. One is, how can I get people to do the things that I want them to do? But simultaneously, I think it’s important to realize, especially with people who have a lot of seniority and manage other individuals, your own seniority, your own authority, could be suppressing your employees’ ability to think creatively, to voice their opinions, because they’re just kind of concerned, hang on, I better not speak up against my superior, against my boss. So we want to think about it from two ways. Example that I have to mention when it comes to authority. Anybody heard of the Milgram experiment?

This is a good one. Oh, I actually do have a little bit of a picture for you. Okay, so, what happened? In the 1950s and 1960s, a guy by the name of Stanley Milgram wanted to try and understand why the atrocities of World War II happened. And one school of thought was, look, there’s just some people who are bad, and they’re bad, and that’s what it is. Okay, they’re bad apples, and there’s nothing we can do about it. There’s another school of thought that said, hang on a second, there was something about the situation that made really good people do some really bad things. And Stanley Milgram was of that opinion.

So what did he do? He ran a study in New Haven, Yale, where he brought in a bunch of people off of the street to be teachers. And they were supposed to teach a student, who is this guy, who was actually working in collaboration with the experimenter. And this participant was told, look, you’re the teacher, that person’s a student, and every time the student gets the answer wrong, you need to give them an electric shock. And the student, as you can see, was hooked up to a bunch of wires, and then the teacher had control of a big box that had a bunch, uh-oh, flip chart one, that had a bunch of levers on it from 15 volts going all the way to 450 volts. Now, they asked a few psychiatrists beforehand, so what percentage of the people do you think would go all the way? And the psychiatrist said, no, no, no, very few, very few. People are good.

It’s only the nutty people, the psychotics, the sociopaths, who are going to do that. So what’s the percentage of psychopaths and sociopaths? One to two percent of the population. Those are the only people who are going to go all the way to 450 volts. What percentage of the people do you think went all the way to 450 volts? Very close. Two-thirds. Two-thirds of the people went all the way to 450 volts. When the student, who was not very good at learning, got the questions wrong again and again, this person just kept on pressing these levers from 15 volts up, up, up, up, up, up, up, up, up. They didn’t stop when the student was screaming in pain, faking it. They didn’t stop when the student shouted that he had a heart condition. They didn’t stop when the student fainted dead away.

They just kept on going. Why did they do that? Because this guy, who was the experimenter, was standing there in his white lab coat with a clipboard there. He never held a gun to the guy’s head and said, you have to go. Nothing like that, but just prompts along the lines of, the experiment requires you to continue. Please continue. There were verbal prompts, but it was never anything physical that said you have to do this. Now, these participants, they were stressed out beyond their minds. They were sweating profusely. They were shaking. They were traumatized from doing it, but they still did it. This is the power of authority.

I will give you one thing to think about, though, keeping in mind the idea of commitment and consistency. Imagine if the study had started off here. My guess is that you would have a very different result. You probably wouldn’t have had two-thirds of the people giving him a 450-volt shock, which, by the way, was also marked with XXX. So, again, combining different types of principles can be very, very powerful. I have just a few minutes left with you, so I want to give you this last idea to think about, and hopefully that’s enticing ideas, which is that when something is limited, we want it more, and that limited can be limited in time, limited in number. It’s particularly valuable if it’s just limited, and if you think about it now, almost all the places online where you can buy tickets do that, and even Amazon does that. When it’s just a few more, they’ll tell you, three more, like buy now, or for airline tickets, four more seats at this price.

It’s trying to tap into this principle of scarcity, getting you to get the sense of, I need to get in on this action now before that opportunity goes away. Auction fever, which I study a lot, is the perfect sort of combination of this. There’s scarcity because in auctions, it’s typically one unique item. There’s time pressure because you have to bid very quickly or the item goes away, and then there’s competition with other people, so this competition increases the sense of the scarcity of the item. So all of that makes it really seem as though this item

is really, really scarce. In general, we really need to beware this adrenaline rush, especially in an auction-type setting. Take a break, think carefully, confer with your colleagues, but fundamentally understand your motivations for buying something or doing something. Is it just because it’s very, very rare and very scarce, or is it because you really want it?

Now, I bring this up. Example, I’ll give you just a second. I hadn’t realized how perfect the timing for this is, but the Black Friday sales, which are on right now in the UK, and then they’ll start in the US probably tomorrow, it’s all about this idea here. Please. If you get somebody to bid on your behalf, so they’re actually not the buyer themselves, and you give them obviously target price restrictions around what they’re doing, do they also get caught up in this adrenaline rush? They might. They might, because at the end of the day, if they’re watching all of, I mean, first of all, in theory you’re asking a professional to do it, they might hope that they’re there for a little bit. If they’ve asked you to do it, to go to Sotheby’s by 18?

Yes. Well, okay. Have you done any work on it at all? That I have not. No, I have not, to see how an agent would do in this situation. But your example is interesting, because when I said professional, then I’m saying, okay, they know something about auctions, they know how to do all this, and in theory they should be better off. Then you ask me specifically, then I’m going to be obnoxious to say, I know about scarcity, I know how to guard against. So in theory, if you train somebody, then you’re better off.

So when you could train yourself, you can train an agent. Does that answer your question? Yeah, I’m just curious about the dissociation between actually wanting an object for yourself, but then just the whole environment, how that actually, someone gets caught up in it, even though they’re not buying that object for themselves. So that’s a very good and important distinction, right? You’re basically pointing out the fact that there are different psychological motivations for you as a buyer, versus an agent as a buyer. And for both parties, there are things that will motivate them to keep going. But different types of things that will keep them going. So for each of the parties, you need to be careful of what the bottom line is.

But you need to put in place different safeguards to ensure that they’re not taken over by auction fever. I think on that example, if you ask someone to go to the auction for you, if you tell them up front that you want that item, they will feel kind of compelled and they will feel this implicit liability towards you that if they miss out on that item and someone takes it, it’s an issue because you employed them to get that for you. So I suppose if you don’t tell them what the outcome you want is, then probably you can eliminate a bit of that. Well, I think it goes back to something that we’ve said before, right? Have very clear bottom lines. So that will prevent you from getting a bad deal. But it may not help you to get a good deal. I saw a hand up.

Yes, please. I just wanted to share something. Please. So I used to be the CEO of the Metro, which probably needs to be known a little bit. And I was involved in the launch period of that. And the scarcity was exactly what we did in the early days. And what I’ve realised is actually it’s a blend of two of the things. Because what we deliberately did was undersupply the London market with numbers of copies to create a scarcity. And if you see the bins now, you’ll still see it says you’ve got to be quick. Because suddenly if you’re going to put lots of free newspapers into London, there’s no value, potentially no value being attached to it. We had to create value, which was by limiting supply. And then it was about creating the habit, because obviously there’s consistency, you have to get there and get quick. And also the resolution, because when people felt that they’d been given this for free, they felt that they had to move it. That’s a lovely example. Thank you. Yeah.

It taps into all of these principles, which is why it becomes very powerful when you’re using all of these different principles simultaneously. I’m at time, but can I please give you my favourite example? Diamonds. So pretty. Yeah, timeless classics. Beauty, fire, love, brilliance. Women tend to like them. What do we know about diamonds? Scarce? Are they really scarce? Tell me more. Mm-hm. It’s brilliant. It’s brilliant, though. Okay? I mean, so… Yes. Yes. It is genius. So that’s exactly it, okay?

So, I mean, look, diamonds, there are tons of diamonds in this world. There are just loads and loads of diamonds in the world. But De Beers holds control of the supply of diamonds. It limits the supply. It makes it to be a perceived value, combined with some clever marketing and biggity-bam-boom, we really, really want them. Now, I have to say this because it’s important. We’re looking at the women in the room going, oh, yeah, we want these diamonds. But you guys have the things that you want, too, okay? I don’t know whether it’s the iPhone or the watch or the stereo or the gadget or the limited edition print or whatever it is, but you guys, women and men, have things that they covet because of scarcity. Let me just end with this final idea here. When we think about influence and persuasion, I’ve talked a lot about these ideas. There are other things that fall into how it is that we can influence and persuade people.

The bottom line, if you don’t remember anything else, remember this. You guys have been trained to strategically think about

the content of your message. Yes, the content of your message is important. But when you’re trying to influence and persuade somebody, think also about how you’re creating that relationship, how you’re framing the information that you’re conveying, because that has a huge impact on how it is that you influence and persuade people. I’ll stop. I’m happy to take questions or thoughts, but I know that I’m also over time. Any questions or thoughts for Gillian? Other questions?

Yes, just going back, I think all of that is great and makes a lot of sense. Going back to the commitment, some cost of that policy is absolutely true. The thing I had a question about was, with the consistency, you know you use that, for example, of putting a sticker on the window and then dealing with it. I think that works from a company-to-person perspective. If you’re the one who’s doing negotiating and you’re going to someone to say, hey, can you do this with me? And it’s a small thing, and then later you go back and say, can you do this with me? Yeah, they might get caught up in the consistency, but isn’t there a danger that they’ll think, actually, I’ve already done you a favour, I’m not going to go back to that. It could be, right?

But the way that I’d actually think about doing it is if you’re trying to get in with a company, it’s, hey, can I have a meeting with you to have a chat about something? Can I buy you a cup of coffee? And then from that coffee, it’s the biggest sale after that. So it doesn’t, yes, they’ve given you their time, but you’ve bought them coffee. Right. Yes. Yes. Please. I guess what I’m just trying to do is to summarize this idea that the ideas of influence and persuasion are all of this stuff. All of this stuff, it’s not necessarily around what you’re saying. So think about politicians, okay? And these height things that we’re talking about or the attractiveness things about. It’s not their actual political positions that they’re conveying, okay? There’s something there, but people are being persuaded by other things like their attractiveness, their height. So that’s what I’m trying to convey to you that the message is important and the message is particularly important if people are motivated to listen to you and have the cognitive resources to listen to what you have to say. But especially if they don’t have cognitive and motivation resources there, you want to focus on how you’re getting to them, buying them a coffee, asking for a little bit of time and then asking for more time, doing them a favor, those kinds of things.

So people don’t necessarily listen to them, but maybe should do. So you’ve got these trade-offs. Exactly, right? So there’s a message component, but there’s also how you’re delivering it. Absolutely. Let me stop. Thank you guys very much for your time and I hope you have an interesting rest of your day. Thank you very much.

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