Robert Cialdini shows how scarcity, authority, and consensus reduce uncertainty and drive action. A one-word change in a Bose ad, reframing it as loss instead of gain, lifted sales 45%. He illustrates with a woman who traded a $2,800 Louis Vuitton bag to move two spots in an iPhone line.
Questions this video answers
iPhone5
Originally number 25; she traded to number 23.
Bose Wave Music System — changing copy from “New” to “Hear what you’ve been missing.”
45%.
Hello, I'm Dr. Robert Cialdini, and I've spent my professional career studying the psychology of persuasion. As you could probably tell from the title of my presentation today, I want to talk about how to be persuasive under conditions of uncertainty. When uncertainty reigns, when people are unsure, let's say, when there's a new set of products on the market that they have to choose from, let's say when you have a new model you would like them to move toward, or when a pandemic strikes the globe and throws everything in the air and people are unsure about what is going to happen next, they freeze. They choose to sit on the fence and not move forward with such choices as we've just discussed described. Even when, let's say, in the instance of your products or services, those would be beneficial to them, they're not going to move, they're going to stay on the fence until their uncertainty has been removed or at least reduced significantly. Now, it turns out there are three universal principles of influence that give us space, special traction when people are under conditions of uncertainty. Here they are, scarcity, authority and consensus. For today, I just want to concentrate on the first of those, the principle of scarcity. Scarcity tells us people want more of those things they can have less of. When something is rare, scarce, dwindling in availability, their attraction for it, and their motivation to have it skyrockets. Take as example, just witness what happened in our recent experience to toilet paper. My goodness. See what something like that suddenly becomes so desirable, people can't stop them from wanting to possess it. Well, that's the process of scarcity at work. And there's a reason why scarcity works this way. There's a psychological tendency called loss aversion, which tells us when people are uncertain, they become especially reluctant to choose items that allow them to gain something. Instead, they prefer to take actions that protect them from losing something. Let me give you an example of something that happened to me in my local community, where during the launch of iPhone5, one of my local TV stations sent a reporter to interview the people in line all around the block, waiting all night for the shops to open so they could rush in and get their new iPhone 5. And the interviewer began talking to people, and she came to a woman who was number 23 in line, who had been waiting all night. And she said, so did you make friends with the other people in line with you? Did you exchange information about one another? Did you strike up conversations? And this woman said, in fact, yes, I did. In fact, when I First got here, I was not number 23 in line. I was number 25. But I struck up a conversation with number 23. And during that conversation, she admired my shoulder bag. It's a $2,800 Louis Vuitton shoulder bag. And this woman said, that's beautiful. I can tell that's not a knockoff. That's the real thing. And I said to her, I'll make you a deal. My shoulder bag for your place in line, $2,800 Louis Vuitton bag to go from number 25 to number 23. The reporter, to her credit, after being rocked back a bit, said, can you tell us why you made that choice? And this woman gave the answer that I think explains everything in terms of the psychological process of loss aversion. She said, because I heard this shop didn't have a lot of models, and I wanted to be sure that I didn't lose the chance to get one loss. It's loss. That's the thing that causes people when they are uncertain, to move and even to move in the direction of a particular product or service or idea, provided that they think they might lose it. Otherwise, how would this work in business? Well, let me give you an example from an advertising campaign for the Bose from Bose Corporation, right? Bose Acoustic Corporation. I have done some consulting with them in the past, and a few years ago they had a new ad for something that they called the Bose Wave Music System. Let me show you that ad, what it looked like at the top. It said new. And then it provided the new features, performance, elegance, simplicity that you could obtain if you bought this new product. They were very disappointed in the outcome of this ad. They expected much more. They didn't get it. So they came to us and they said, you study persuasion, you change this ad, make it more persuasive, change everything about it, because it was so disappointing. And I looked at the ad and I said, you know what? This is a good ad for bo's customers. They're not spur of the moment, spontaneous purchasers. No, they want this information. But I am going to ask you to change one thing about the ad. Something at the top of the ad. Instead of saying the wording new, I would like you to change it to, now, let me show you what the second generation said. Instead of saying new, this said, hear what you've been missing. The rest of the information was the same. It was about new performance, new features, new elegance, new simplicity. But now those things were going to be lost if you didn't move in this direction. Now we had the power of loss aversion, not in the face, but in of the Bose product, but in the sales of the Bose product, in both terms, in both senses of the term sales. Because that second generation ad increased sales by 45%. Why? Because of a small change moving from what you can obtain to what you will miss, what you will forego, what you will lose. So what's the implication for you? You all have products that have a particular unique value proposition, Some aspect of it, maybe some combination of features that people can't get if they don't move in your direction. Don't be content to tell people that they will gain. They will obtain this unique combination. Tell them what they will lose in terms of that combination of features if they don't move in your direction. If you do that, you will get significantly more people moving in your direction. Because now you've harnessed the power of loss aversion and scarcity when under conditions of uncertainty. Okay, well, that's how the uncertainty process works within the principle of scarcity. If we were to do a longer presentation, we'd go back into scarcity, talk about other kinds of opportunities for using scarcity to move people in our direction. We'd also talk about the principles of authority and consensus and that also reduce uncertainty and allow people to move forward. I hope I have the opportunity to make that presentation to you and your group in the future. Thank you for your kind attention.
