A Half Dozen Things I’ve Learned from Robert Cialdini’s book “Influence”


Professor Robert Cialdini first published his best-selling book Influence in 1984. Charlie Munger liked the book so much he sent Cialdini a thank you note and a share of Berkshire A stock then worth $75,000. Munger said in his famous The Psychology of Human Misjudgment speech at Harvard: “Cialdini does a magnificent job and you’re all going to be given a copy of Cialdini’s book. And if you have half as much sense as I think you do, you will immediately order copies for all of your children and several of your friends. You will never make a better investment.” It should not be a surprise that Influence is in the top ten on my book discovery web site 25IQ books.

Cialdini has a new book out that is at the top of my reading list called Pre-Suasion, which I will write a post about at some point. Cialdini’s describes the subject of his new book as follows: “Pre-suasion is the practice of getting people sympathetic to your message before they experience it.”

In his book Influence Cialdini identifies six important principles often used by what he calls “compliance professionals.” Do you know any “compliance professionals” who have been in the news lately? How do they use principles like authority to try to manipulate you? Influence also discusses a range of additional biases and type of dysfunctional thinking that can cause people to make mistakes. Ironically, we often act as compliance professionals with respect to ourselves to our own detriment. Unfortunately, just being aware of these tendencies is not sufficient to keep them from adversely impacting our judgment and decisions. But a tendency is not destiny, so we can learn to be less adversely impacted by these techniques. None of us will ever be perfectly rational, but we can become incrementally better at making rational decisions.

1. “The [reciprocity] rule says that we should try to repay, in kind, what another person has provided us.” “The obligation to receive reduces our ability to choose whom we wish to be indebted to and puts that power in the hands of others.” The need for reciprocity is a powerful human emotion. Compliance professionals know how to exploit this tendency. For example, when the stock broker gives away the “free” salmon dinner he or she is expecting you to reciprocate by allowing them to manage your wealth. The salesman who wants you to buy his goods in return for the football tickets is no different in his or her motivation. One weird thing about the reciprocity tendency is that you are so influenced by this tendency that what is asked for by the compliance professional can be of far greater value that what is given to you. For example, the Hare Krishna member in the airport who gives away the flower can ask for something much more valuable and yet the people being solicited will still feel the compulsion created by reciprocity. The key defensive move against reciprocity is to not accept the gift in the first place. I would rather stab myself in the thigh with a sharp fork than accept a free weekend condominium stay offered by a time share salesperson. One technique that is useful when engaging in a negotiation is to politely refuse to accept or at least immediately reciprocate when hospitality is offered. Lavish hospitality given to the employees of a business is often intended to create obligation at a personal level, which they hope will cause the employee to offer reciprocal benefits to the generous compliance professional. One problem, however, is that some studies have shown that there is also a bias toward receiving a gift: “Although the obligation to repay constitutes the essence of the reciprocity rule, it is the obligation to receive that makes the rule so easy to exploit.” I’m not so sure about this conclusion as I have an easy time saying no to giftsCialdini points to an additional factor that compliance professionals may use to generate the behavior they desire: “A well-known principle of human behavior says that when we ask someone to do us a favor we will be more successful if we provide a reason. People simply like to have reasons for what they do.” Charlie Munger has said: “the practice of laying out various claptrap reasons is much used by commercial and cult ‘compliance practitioners’ to help them get what they don’t deserve.” The sales person may say something like: “Well yes, we are charging you a 3% sales load on this index fund, but we need to do that because our costs are high.”

The “reason” cited by the compliance professional creates a tendency by the customer accept the fee, even though it is unreasonably high. Similarly an internet scammer may claim that they need to know your social security number because it is required by a state government regulation. How can this reciprocity principle be used in a positive way? One example would be someone who wants to find a career mentor. The best way to do that is often to do favors for the person you want to be a mentor first.  Cialdini talks about an important idea he calls prework:

“People will help if they owe you for something you did in the past to advance their goals. That’s the rule of reciprocity. Get in the habit of helping people out, and—this part’s really important—don’t wave it away when people thank you. Don’t say, “Oh, no big deal.” We’re given serious persuasive power immediately after someone thanks us. So say something like “Of course; it’s what partners do for each other”—label what happened an act of partnership. With that prework done, a manager who subsequently needs support, who needs staffing, who maybe even needs a budget, will have significantly elevated the probability of success.”

Cialdini believes the exchanges can:

“increase both the social value of the giver and that person’s productivity. It wasn’t the number of favors done. It was the number of favors exchanged. If the initial giver creates a sense of reciprocity—a sense that there’s a network of partners who are not just willing but eager to help—he will get a lot in return. He can increase the likelihood of a big ROI by characterizing his assistance as a two-way partnership.”

2. “We all fool ourselves from time to time in order to keep our thoughts and beliefs consistent with what we have already done or decided.” Charlie Munger believes:

“The brain of man conserves programing spaces by being reluctant to change.” He describes the relationship between the human brain and an ideas as being like a human egg with a sperm. Once an idea gets in to the brain, other ideas are prevented from entering by a shut off valve, just like what an egg does to additional sperm once one gets in.”

Commitment and consistency are a very powerful forces that kick in with particularly strong force when people do things like making a public statement about something like a stock price or a political issue. Once that public statement is made (e.g., climate change is X), the tendency is for the person who made the statement to ignore or deny dis-confirming evidence. The best antidote to this bias is arguably an outlook often described as : “Strong opinions, weakly held.” To effectively adopt this antidote a person should do enough research so their opinions are strongly believed, but be open to new dis-confirming evidence (weakly held). As an example, when you publicly state that you believe X stock is going up you are setting in place a potential bias that may cause faulty thinking. By keeping your view on that stock weakly held you can remain open to new evidence if it appears. Value investor Guy Spier writes: “I try to avoid walking into the trap of making statements about any stocks that we currently own, since the situation might later change or I might discover that I was wrong. This is why I prefer not to discuss our current investments in public settings such as annual meetings, shareholder letters, and media interviews.” Sunk cost bias is part of this bias. Munger notes:

“Failure to handle psychological denial is a common way for people to go broke. You’ve made an enormous commitment to something. You’ve poured effort and money in. And the more you put in, the more that the whole consistency principle makes you think,” Now it has to work. If I put in just a little more, then it ’all work…. People go broke that way —because they can ’t stop, rethink, and say,” I can afford to write this one off and live to fight again. I don’t have to pursue this thing as an obsession —in a way that will break me.”

How can this principle be used in a positive way? Cialdini once used this story in an interview to make the point: 

“There was a study done on college students, as freshman, were having trouble in their first year with their study habits.  They weren’t doing very well in their classes.  And they went into a particular program that was scheduled to help their study habits.  One group of them made a commitment to study regularly and specific times, in a systematic way every night.  And they kept that commitment in their heads. Another group wrote it down and kept it private.  Another group wrote it down, and showed it to everybody else in the room.  “Here’s what I promise that I’m going to do.” The first 2 groups didn’t improve at all on their next test.  But that group that showed their public commitment to everybody else in the room, 86 percent of them got one full grade better and moved from a C to a B or a D to a C on the next exam.”

3. “First, we seem to assume that if a lot of people are doing the same thing, they must know something we don’t. Especially when we are uncertain, we are willing to place an enormous amount of trust in the collective knowledge of the crowd. Second, quite frequently the crowd is mistaken because they are not acting on the basis of any superior information.”We will use the actions of others to decide on proper behavior for ourselves, especially when we view those others as similar to ourselves.”  Social proof is powerful and someone who knew that well was Bernie Madoff. The list of his famous victims is long. Sandy Koufax, Kevin Bacon,  Henry Kauffman, Steven Spielberg, Kyra Sedgwick, John Malkovich… The list of famous victims goes on and on. Cialdini writes: “One means we use to determine what is correct is to find out what other people think is correct. We view a behavior as more correct in a given situation to the degree that we see others performing it.” Restaurants often seat the first patrons near the front window since it is harder to get people to enter if no customers are already inside. As Ben Graham once said: “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.” Munger talked about how business executives makes errors based on social proof in his famous Harvard speech on human misjudgement: “Big-shot businessmen get into these waves of social proof.  Do you remember some years ago when one oil company bought a fertilizer company, and every other major oil company practically ran out and bought a fertilizer company?  And there was no more damned reason for all these oil companies to buy fertilizer companies, but they didn’t know exactly what to do, and if Exxon was doing it, it was good enough for Mobil, and vice versa.  I think they’re all gone now, but it was a total disaster.” In order for investors to beat the performance of an index fund they must have a view that is different than the crowd and they must be right about that different view. Cialdini points out: “Daniel Kahneman won a Nobel Prize for showing that if you’re trying to mobilize people under conditions of uncertainty, notions of loss are psychologically more powerful than notions of gain. Managers can take the wind in their faces and make it wind in their sails by speaking not just of what will be gained by moving but also of what will be lost or forgone if people fail to move. A second thing that happens when people are uncertain is that they don’t look inside themselves for answers—all they see is ambiguity and their own lack of confidence. Instead, they look outside for sources of information that can reduce their uncertainty. The first thing they look to is authority.” An example Cialdini cites is changing the action line in an infomercial from “Operators are waiting, please call now,” to “If operators are busy, please call again.” Cialidni describes why the call in rates went way up when this change was put in place: “home viewers followed their perceptions of others’ actions, even though those others were completely anonymous. After all, if the phone lines are busy, then other people like me who are also watching this infomercial are calling, too.”

Social proof, like the other tendencies discussed in this post, can be uses for good as well as bad purposes. For example, an advocate of greener practices writes:

“Cialdini, a professor at Arizona State University, conducted a study in several Phoenix hotels comparing the effects of those ubiquitous hotel-bathroom placards that ask guests to reuse towels, testing four slightly different messages. The first sign had the traditional message, asking guests to “do it for the environment.” The second asked guests to “cooperate with the hotel” and “be our partner in this cause” (12 percent less effective than the first). The third stated that the majority of guests in the hotel reused towels at least once during their stay (18 percent more effective). The last message was even more specific: it said that the majority of guests “in this room” had reused their towels. It produced a 33 percent increase in response behavior over the traditional message.”

Cialdini gives this other example from an area of the United States close to where he lives:

“We’ve done some research in the petrified forest in Arizona where I live, there’s a big sign: ‘So many people have stolen pieces of wood from the forest that it’s undermining the integrity of the forest’. That sign tripled theft! But if we said ‘If even one person steals, it undermines the integrity of the forest’, that cut theft in half compared to no sign. Well, it turns out that the managers of the park made a mistake, because only 2% of people steal. So actually they made two mistakes: First of all, they didn’t use the real Social Proof: the 98% of the people who don’t steal. Secondly, they made stealing seem like the norm when it wasn’t! So it’s all about the norm. Norm is essentially Social Proof.”

4. “People prefer to say yes to individuals they know and like.” Finding examples of dysfunction based on liking is like shooting fish in a barrel with a spear gun. For example, an actor who knows nothing about finance is put in a commercial and talks in the advertisement about how you can “make money” doing X.  People know that the person is just an actor and yet statistics show they are motivated into the reverse mortgage or buy the expensive insurance or trade commodities. The sales person who wants to close the sale may want to learn the favorite sports team or hobby of the customer for the same reason. People are also more likely comply with requests of people who are physically attractive or who have similar backgrounds and interests.” Again, the liking tendency can be used for good as well as bad purposes. For example, a study concluded: “newcomers feel motivated to come back to Alcoholics Anonymous because they felt cared for, felt similar to other alcoholics, and found hope in others’ recounted experiences with the program. Findings also argue for an extension of Cialdini’s theory by augmenting the ‘liking’ peripheral cue to include social support and similarity.” Munger says Alcoholics Anonymous uses many of the same techniques as a cult like the Moonies, but for what he believes is a positive outcome. It is interesting to note that just because someone is “family” does not mean they fall outside of the liking/hating tendency.  Munger quotes Buffett as saying: “a major difference between rich and poor people is that the rich people can spend more of their time suing their relatives.”  On a more positive note, Cialdini advise salespeople as follows:

“People don’t buy from because they like you, as much as they buy from you because they perceive that you like them.  If I know that you like me, I know you’re going to give me a good deal. You’re not going to exploit my interests.  You’re not going to take me.  If you genuinely like me, I can exhale.  I can listen to what you have to tell me with confidence. So here’s the implication.  Instead of trying to find a way to get your clients to like you, you find a way to come to like your clients, and show them that you like them. That’s your secret.”

5. “We are trained from birth to believe that obedience to proper authority is right and disobedience is wrong.” “Abraham’s willingness to plunge a dagger through the heart of his young son because God, without any explanation, ordered it. We learn in this story that the correctness of an action was not judged by such considerations as apparent senselessness, harmfulness, injustice, or usual moral standards, but by the mere command of a higher authority.” Authority is often used by “compliance professionals since it is so easy to put into play. Often all is needed is an expert, who can be just about anyone with a fancy title, particularly if they are from out of town. The good news is that if someone’s expertise is shown to be fake the spell can be broken. Charlie Munger describes the problem with authority bias: “[Researchers] don’t do this in airplanes, but they’ve done it in simulators. They have the pilot to do something where an idiot co-pilot would know the plane was going to crash, but the pilot’s doing it, and the co-pilot is sitting there, and the pilot is the authority figure. Twenty-five percent of the time, the plane crashes. I mean this is a very powerful psychological tendency.” Cialdini explains: “Someone who is in authority has a title, ranking, or the trappings of authority. But, someone who is an authority is more persuasive because they have superior knowledge, experience or expertise in a specific area.” A crook trying to steal your Internet password may claim that they are from the security department of your network services provider, bank or credit card company. The Nigerian scammer may say they are a prince, senior government official or tribal leader for the same reason. Scammers who claim to be from the IRS are also trying to exploit authority bias. Ciadini has said in an interview:

“Authority is more important, impactful and more influential on topics of fact. If you are an expert on the matters of fact then you should emphasize your authority when you are presenting that information.” How has the Internet charged this authority principle. Cialdini points out: “Social media have allowed us to access other sources of information than in the past, but I don’t think they’ve changed our responses to influence appeals. One thing we’re seeing, though, is that people are beginning to be influenced by their peers more than by experts.”

6. “Our typical reaction to scarcity hinders our ability to think.” Scarcity is often used by salespeople and other compliance professionals to motivate buyers. Bernard Madoff when approaching new marks liked to make a big show out of telling people in public that they would not be allowed to invest in his fund. The more he told them he was not willing to manage their money, the more they wanted to do so since he created a false sense of scarcity. Palm Beach accountant Richard Rampell said of Madoff: “It was almost like you were getting let into the club of investors, and everybody wanted to be in. ‘Oh, wow! You’ve got a Madoff account.'” The phrase “limited time offer” or available for the first ten customers is all about invoking scarcity bias. A limited edition Ferrari is all about creating an image of scarcity. Cialdini points out: “The scarcity principal trades on our weakness for shortcuts.” If the Yeezy sneaker is relatively scarce, is must be valuable is the message intended by the compliance professional. If there is a line outside a store to buy the latest phone it must be scarce and therefore valuable in the thinking the vendor wants to generate. If the salesperson says you need to act now, but you are not ready to act since you have not done the due diligence, just say no. As Warren Buffett says: “Investing is a no-called-strike game. You don’t have to swing at everything–you can wait for your pitch.” Addendum: It is important to note that more than one principle may be involved and that there are many more biases, tendencies and heuristics than the six discussed in this post on Influence. They can all interact to create what Charlie Munger calls a lollapalooza. Munger:

“A [decision] frequently involves a whole lot of factors interacting … the one thing that causes the most trouble is when you combine a bunch of these together, you get this lollapalooza effect. Often results are not linear.” Munger relays this story: A guy named Zimbardo had people at Stanford divide into two pieces: one were the guards and the other were the prisoners, and they started acting out roles as people expected.  He had to stop the experiment after about five days.  He was getting into human misery and breakdown and pathological behavior.  However, Zimbardo is greatly misinterpreted.  It’s not just reciprocation tendency and role theory that caused that, it’s consistency and commitment tendency.  Each person, as he acted as a guard or a prisoner, the action itself was pounding in the idea.” Wherever you turn, this consistency and commitment tendency is affecting you.  In other words, what you think may change what you do, but perhaps even more important, what you do will change what you think.  And you can say, “Everybody knows that.”  I want to tell you I didn’t know it well enough early enough.”


Cialdini’s book Influence: https://www.25iqbooks.com/books/8-influence-science-and-practice-5th-edition 

Munger’s The Psychology of Human Misjudgment speech:  http://www.rbcpa.com/mungerspeech_june_95.pdf

Influence at Work  http://www.influenceatwork.com/wp-content/uploads/2012/02/E_Brand_principles.pdf

Atlantic article:   http://www.theatlantic.com/magazine/archive/2009/07/greening-with-envy/307498/

HBS Interview: https://hbr.org/2013/07/the-uses-and-abuses-of-influence

NPR Interview: http://www.pbs.org/newshour/bb/psychological-trick-behind-getting-people-say-yes/

Interview: http://www.mischacoster.com/2010-10/psychology/interview-dr-robert-cialdini-on-social-media-influence-with-audio/

Interview: http://www.geniusnetwork.com/robertcialdini/Genius-Network-Robert-Cialdini-Interviewed-by-Joe-Polish.pdf

One thought on “A Half Dozen Things I’ve Learned from Robert Cialdini’s book “Influence”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s