Monday, January 17, 2011

Sales Use Of The Principles Of Persuasion

Principles of Persuasion
In a negotiation both parties seek to persuade the other party to move on their positions. As a negotiator you need to know how to persuade or sell others.

Robert B, Cialdini is a professor and author that identified six basic forms of persuasion. 
1.     Liking. People like those who like them. A weaker argument will convince people who like you. 
2.      Reciprocity. People repay in kind. In general, this goes for cooperation, trust, empathy, help.
3.     Social Proof. People follow the lead of similar others. (Social comparison Theory)
4.     Consistency. People fulfill written, public, and voluntary commitments
5.     Authority. People defer to experts. 
6.     Scarcity. People value what is scarce. Framing that highlights losses or lost opportunities can be very persuasive.
You can read about them in Mr. Caldini’s  book “Influence: The Psychology of Persuasion”

Lets look at this from a procurement negotiation perspective to see how a Supplier might use those principles of persuarion.
  1. Liking. Suppliers may want to entertain you, take you out to dinner or to events. That’s because they want the Buyer’s personnel to like them. If they like you two things will happen. You may accept their weaker argument, or you will give them the benefit of the doubt versus others that you may not like as much.
  2. Reciprocity. When a Supplier has gone above and beyond to help you with a problem, there is an expectation that you will return the favor. If you don’t your future requests may fall on “deaf ears” where they won’t provide the same response.
  3. Social proof is something that suppliers will provide every day and during negotiations by references to either who is purchasing from them or what others have requested or agreed for terms.
  4. Consistency can be used in trying to sell a position of no. If every time you bring an issue up they are consistent in telling you no, they are trying to convince you that the answer will always be no.
  5. Authority in a sale setting is done in many ways.  It can be an expert opinion on their product or service. It can come from the fact that they have standard terms, standard prices, standard discounts they want to use. They will also use the need to get approval from a higher authority and the delay that will create as a means to seel you not to pursue the issue.
  6. Suppliers will use scarcity as a means of persuading you to act. For example, they can tell you about short supply and the need to order. They can tell you about an impending price increase that to beat requires immediate action.
All of these are attempts by the Supplier at trying to persuade the Buyer.

Lets look at the same principals of persuasion that could be used by the Buyer, 
  1. Liking. Instead of focusing on the Supplier liking the Buyer personally the focus is usually on getting the Supplier to like doing business with the Buyer because of the way the Buyer treats the Supplier.
  2.  Reciprocity.  Rather than focus on reciprocity for past acts, most buyers will use future business as way to persuade the suppliers to act.
  3. Social Proof.  As social proof Buyers will remind Suppliers of their competition, what they have provided and what the Supplier needs to provide. 
  4. Consistency. To persuade Suppliers buyers will set expectations of what’s needed and why and what’s not acceptable and why and be consistent in their positions.
  5. Authority. Buyers will use expert opinions and defer to experts to make points. 
  6. Scarcity.  From the Buyers perspective scarcity ties to the Buyer’s business. It can be what it will take the Supplier to replace them as a customer. If can be how long it will be before they get the opportunity again. It could also be making it clear that they have one chance, and if they don’t take advantage of it, they may not get another. For example, once you make an award, it will be that Supplier’s business to lose for the duration of the program and you won’t consider others unless they are not performing.
One of the best tactics in Buyer’s persuasion is taking the time as early as possible to set expectations.

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