Opening a business is a new adventure, a one that you’ve never experienced before. It could be challenging, you could feel lost at the beginning, but if you manage to survive the first year of the business you will probably set yourself for success.
In school we’ve been trained for years to be good executors we’re good at completing tasks and assignments, but as a business owner you will now have to set tasks and assignments for yourself and for your team members, and that’s a new challenge.
Also in school, as executors, we never had to persuade anybody with anything, the teacher assigns us a certain task, we implement it, hand it over for review, and that’s it, not much human interaction. But in business, human interaction is everything. You interact with your suppliers to get the best price for the goods you’re going to sell, you interact with your employees to get tasks done, and you interact with your customers to sell them the goods that your business produces.
We study everything in school from history and geography to math and physics, but there’s something missing in the school curriculum and that is the human element.
Most of us go through their academic careers without having a clue on how to work in a team or how to interact and collaborate with other human beings to accomplish a specific goal.
Covering all the aspects of human psychology and team dynamics is beyond the scope of this article, but here we will try to cover the basics of persuasion so you could use this skill to improve your human-to-human interactions.
So let’s get started.
Why You Need to Learn Persuasion as A Business Owner?
A business is more than cooking good meals, providing great hair cuts, fixing pain in teeths.
A business is more than accomplishing the technical tasks that the business provides.
A business is about human interaction.
Your customers are human beings, your team members are human beings, your suppliers are human beings.
And humans are creatures that don’t function well if they’re not motivated, engaged, and convinced.
Without persuasion you get low sales, unaccomplished tasks, and worst prices from your suppliers.
You will need persuasion to:
- Negotiate
- Sell
- Attract Customers
- Build Relationships
- Lead Your Team
- Secure Funding
- Position Your Brand in the Market
Whom Will You Need to Persuade as A Business Owner?
Your Clients:
The most obvious segment you will need to persuade as a business owner is your customers and clients, otherwise they’ll just keep shopping and do business elsewhere.
In a competitive market, you can’t force your clients to buy from you with the prices that you see fit.
The features, the price, and the quality of the product or service you’re selling need to be designed strategically taking the external environment, the market, into consideration.
A newbie mistake new business owners make is that they set, relatively, very high prices for their products or services.
Notice the word “relatively”.
When you are new to the market there’s a strategy that I like to call “the penetration pricing strategy”. Simply put, you need to set competitive prices to attract customers to buy from you. Even if the quality you’re offering deserves more you still need to set competitive prices to convince customers to break their habits and buy from you.
And pricing is just one factor in the persuasion equation.
Your Suppliers:
Every good business needs good suppliers, without your suppliers you’re going to face a hard time doing your business.
Every business owner is a customer for other business services, and just like businesses need to convince customers to make business with them, customers also need to convince businesses to give them best prices.
Negotiation with suppliers is a skill you will need to hone as a business owner if you want to survive in the market.
Prices change all the time, businesses get born and disappear, the market is always dynamic in nature, so if you don’t convince your suppliers that you are a good business partner for them they are just going to ditch you and work with your competitor.
Your Team Members:
The human population is around 8 billion people. Yet believe me, talent is scarce.
As a business owner you might be tempted to do everything yourself, but have you ever seen a maestro playing all the musical instruments at the same time to play the moonlight sonata?
Even if he is the best one at playing all the tools, he can’t play them at the same time. He needs a team. And you need a team as a business owner.
Now that I convinced you that you need a team you will have to enter the “talent market” and shop for talents.
Labor is everywhere, talent is scarce.
You will need to offer your team members a good reason to stay on your team and don’t go elsewhere.
That includes salaries, but it’s not just that. It’s also work environment, career growth, and many other factors working together.
How to Persuade?
So now I’ve persuaded you of the importance of persuasion the question becomes: how to persuade?
There’s a famous book Influence written by a professional psychologist Dr.Robert Cialdini, discussing in great detail the psychology of persuasion and what you need to do to get a “yes” from the other person. This section of the article is going to be a summary of the famous ideas in this book.
There are 6 factors in the communication and interaction process that impacts how persuasive you seem to be to the other person, and these are:
- Authority
- Reciprocity
- Commitment
- Liking
- Social Proof
- Scarcity
Authority:
The most famous example of how authority works is the Ads of Sensodyne. Sensodyne brands itself as the toothpaste recommended by experts for sensitive teeth.
A dentist recommending a toothpaste brand is a source of trust for this brand that it actually delivers what it promises.
Generalize this idea on every other business category. An expert recommendation is a source of trust for many in every business niche, so being endorsed by experts is a huge element in the persuasion process for your audience.
Reciprocity
When someone gives you a gift you feel obligated to give him a gift back. This is called reciprocity, and it works in business too.
When you’re entering a car dealership and the salesman offers you a candy or something to drink, that’s reciprocity in play, he’s trying to influence your decision by giving you a small gift so in return you unconsciously want to buy from him.
Reciprocity is a powerful tactic because humans tend to reciprocate and like to give back, your free gift could be an eBook or a free online course, it could be anything, but when you offer something for free you win the hearts of your audience and they tend to buy and do business with you.
Commitment:
Human beings are enemies of change, we don’t like change, we hate change, we resist change. So when we get used to something we don’t like to abandon it.
This characteristic of human beings is utilized by businesses to influence your buying decision.
When you’re buying clothes you’re always incentivized by the salesman to try out the pieces you like, why? Because you will get attached to it if you like it and you won’t want to give it back and you will be more likely to buy it at any cost.
When you’re in a car dealership you’re incentivized by the salesman to go for a test drive for the car you like, why? Because you will like it and like how it feels sitting in the driver’s seat so you will be more likely to buy it.
When we like something we get attached to it and we don’t want to give up on it, and that’s how businesses increase their sales with free trials, test drives, and other strategies.
Liking:
We tend to imitate the people we like, when Cristiano does a certain haircut suddenly when you walk on the street everyone has the same haircut.
When a celebrity dresses in a certain style suddenly it becomes a trending style.
Humans are imitators, we imitate people in power, we imitate celebrities we like, we could even imitate things in nature. That’s just how we work.
Businesses realize this concept and start building marketing strategies around it.
A concept called “influencer marketing” has stemmed from this idea, business go to social media celebrities or even micro niche influencers and pay them a certain amount of money they agree on so they could promote the businesses’ products or services to their audience because the audience likes and trusts the celebrity.
This is just one example of how the principle of liking works, there are a lot of other examples on this idea, but the main concept is that we like someone so we tend to imitate him to be “like” him and businesses use that person to promote to the people who like him their products and services.
Social Proof:
Which product are you more likely to buy: A product with 1152 reviews and 4.7 star rating or a product with 3 reviews and 2.1 star rating?
That’s the principle of “social proof” in action.
If many people have tried and recommended something we are more likely to trust that thing over something new nobody knows or tried.
Human beings are the enemies of the unknown, we are scared of it, we are afraid of it, we don’t like it.
So we tend to try the things that has proved itself and put our trust in it.
Scarcity:
Have you ever gone through that situation where there’s a certain item you want to buy you keep procrastinating about it and say to yourself “I’ll buy it later” but when there’s just 3 pieces left you feel panicked and hurry to buy it before it goes out of stock?
That’s called scarcity, and we all go through it.
We tend to procrastinate the buying decision when there’s plenty of that thing we want to buy, but when it’s scarce we feel panic, we hurry, we could even fight each other to buy it.
Conclusion
Now you’ve got all the basics you need to be good at persuasion, at first you might feel intimidated implementing these tactics but with practice you will see how your business is growing exceedingly well when you’re implementing them.
