Synopsis
People are generally resistant to change, which includes committing to new vendors, products, services and ideas. The most common reason: the potential value is counteracted by a perceived risk or switching cost. Irresistibility is the condition you create through strategic marketing to reduce risk and increase the perception of value. Eight "Rules to PERSUADE" can help reduce buying resistance that leads to easier and faster commitment.

Why People Resist
A young man gets on a train and sits across from an older man who's reading a newspaper. After a few minutes, the younger man politely asks, "Can you tell me the time?" The older man looks up and says, "I can, but I'd rather not," and continues to read his paper. A few minutes go by, and the younger man's curiosity becomes too much to bear. "Excuse me, sir. Why won't you tell me the time?" The older man folds down his paper and responds, "If I tell you the time, we'll start talking. This train only makes one stop, the small town where I live. You seem like a nice fellow, so I'd probably invite you to dinner. Now, I have a daughter about your age and you never know what can happen... and I'll be darned if I'm going to have a son-in-law who can't afford a watch."

People resist requests, change or new ideas for good reason. It comes naturally; we're actually hard wired to resist, even if there are some problems with the way things are going. Neurologists, using CAT scans and MRI's have confirmed that the brain likes what it already knows. Over the last million years or so, the brain has evolved and gotten our species this far by avoiding risks, and it's not about to switch direction anytime soon. We're adapters by nature. Not changers. As such, people often have to see real danger in maintaining the status quo before the risk of change counterbalances the risk of staying put.

The 8 PERSUADE Principles
Marketing is the process of diffusing the natural resistance that prospects and customers have for committing to a decision to act, whether that's picking up the phone, going to your Web site, or making a commitment to buy. To create a 'Condition of Irresistibility,' marketers generally employ one or more of 8 strategies for reducing resistance, thereby increasing the propensity to PERSUADE:

• Pain Principle
• Endorsement Principle
• Reframing Principle
• Steps Principle
• Unavailability Principle
• Appearance Principle
• Dollars and Cents Principle
• Exchange Principle

1. Pain: Find a Problem to Solve. People are more likely to commit to change if there's pain: a problem with the status quo. The principal pains that people face are physical pain (or discomfort), financial limits, inability to resolve a problem and social acceptance. If your product, service or idea is perceived to be a solution to one of these conditions, risk is diffused and benefit is more apparent. In some cases, pain is obvious, such as with pharmaceutical products, where physical pain or discomfort are paramount. However, in many cases, the pain or problem is more subtle and may not even be stated. Michelin has positioned its tires as a solution to child safety, a 'pain' for parents, which is clear once they articulate it, but not obvious until they do. Starbucks, to most customers, provides good coffee, not a pressing problem. But finding an interim place to meet or work outside of the home or office is a problem that many people face. So Starbucks provides an environment which it calls 'The Third Place,' where people can meet for 'a cup of coffee,' a buzz word for a brief meeting.


2. Endorsement. Get Support from Others. In the 1981 Sanka brand coffee campaign, television personality, Robert Young suggests 'Why not try Sanka brand coffee... tastes like real coffee.' What does Robert Young have to do with coffee? At the time, he was recognized as a wise and credible 'father figure' who 'knew best,' based on his widely viewed television series, 'Father Knows Best.' Who wouldn't take advice from such a credible surrogate father? People tend to support others who agree, especially if they are recognized or are in authority positions. One of the most unsettling examples confirming the influence of authority, was the 1963 experiment of researcher Stanley Milgrim, whose subjects were asked by 'experimenters' to give dangerous levels of electric shocks to actors posing as subjects. Even when the actors screamed in anguish, only a small percentage of subjects relented. Why? The White Coat of Authority. Think doctors, researchers and even Clinique sales attendants. Uniforms and other markers of status like finely styled clothes and expensive cars can actually improve compliance.
   
   Just like we're hard wired to resist change, the brain likes confirmation from others because it doesn't have to work as hard. So powerful is this tendency that it can and has often been leveraged by con artists, most notably, in the recent Bernard Madoff fraud. The endorsement by many credible and successful 'endorsers' diffused the resistance that many sophisticated investors might normally have had to such uncommonly good performance. The brain seems to be saying, "If it's good enough for someone who knows more than I do, it must be OK."
   
   Interestingly, endorsers don't even have to be famous. Laugh tracks are a classic example. No one likes them... in theory. But the proof is in the applause. The research is overwhelming: canned laugher actually makes people laugh and enjoy their slapstick more. Talk about authority figures having an advantage... people in small cars honk less at people in big ones. And, Jared Fogel, the endorsing persona on Subway commercials, wasn't famous. He was just a customer who had dramatic weight loss as a result of eating Subway sandwiches. What better endorsement than from a happy customer?
   
   The more people agree with a position, the less resistance for others to comply. So put on your white coat or get someone to endorse your product, service or idea and reduce resistance.


3. Reframing. Use Words that Add Value. Littlearth, Inc, manufacturers fashion accessories and purses made from recycled products like old license plates and bottle caps. It turned out that when they framed their message as selling "recycled" products, people thought they shouldn't cost a lot, because the word "recycled" was the connotation of being low priced. The result was that they had a hard time raising their price and conveying a high level of value for their products.
   
   So they picked another word to frame their value: "collectables." By calling their products "collectables," they conveyed a higher perceived value. Now, each purse comes with a certificate of authenticity, representing the uniqueness of each purse. By reframing, they increased the perceived value and were able, with hardly any additional cost, to raise their prices by 30-50% and increase unit sales as well. So using the right words, framing your message, is an important lever.


4. Steps. Take Small Steps Toward a Larger Goal. Because perceived risk is one of the greatest obstacles to commitment, gradual thresholds make it easier to gain confidence and reduce risk in the mind of the prospect. "Sequencing," therefore, becomes an important strategy for minimizing risk. Imagine walking up to someone who's sitting at a bar and starting off with a line like, "I'd like to start a long-term relationship with someone like you." A better start is a series of questions like, "Is this seat taken?" or "Could you pass the peanuts?" The goal of sequencing is to make it easy for another person to cross the threshold toward greater levels of commitment. Further, because it requires less investment to create incremental sales from an existing customer than to create a new one, low relationship thresholds create greater efficiency and lower acquisition cost. By reducing risk, lowering buying thresholds also increases the perceived benefit or value in the mind of the prospect.


5. Unavailability. Create the Perception of Limited Supply. The tendency to embrace what will soon become unavailable can be an important driver to commitment. Short supply influences value and decreases resistance to acceptance. It's the basis of collectables of every sort from baseball cards to antiques. A flawed stamp or coin is actually a more valuable collectable because of its scarcity. Scarcity can also apply to time. The commonly used 'pending event' sales close can be represented by 'limited supply,' or 'the price goes up on Sunday.' Like many of these techniques, scarcity can be employed unscrupulously by con artists. For example, a stock broker calling 'breathless' from the trading floor offering a previously 'unavailable' investment 'if you're able to commit at this time.' Resistance seems to melt in the face of scarcity.


6. Appearance. Use Design to Increase Perceived Value. Often, the reason you have to lower price is because people don't perceive your offering to be valuable in the first place. Design is the process of defining the appearance and attributes of an offering that creates a high perceived value relative to cost using visual cues that communicate value and meaning. It's the form of a product, the aroma, the color or the type style or the physical space, uniforms or even the experience people have on your Web site. Whatever tangible elements people can actually see and experience first hand. Design deals with the emotional component of perception... what makes something desirable. No matter how much your product or service 'does,' if the design doesn't convey value on an emotional or sensory level, you've lost your first line of attack: perception. And, because design doesn't cost anything after you've done it, it's not an incremental cost. Design is truly 'the gift that keeps on giving' in the sense that there is no ongoing cost for use. That not only increases the perceived value, but through continued use, actually decreases your acquisition cost over time.


7. Dollars and Cents. Lower Prices do not Always Increase Perceived Value. A lot of companies believe that when something doesn't sell, you lower price to increase the perception of value. The problem is that lowering price actually has just the opposite effect. It lowers perceived value. By lowering price, you not only reduce value, but reduce your margins and increase your cost of acquisition by at least the amount of the cost reduction. Not a very good way to reduce acquisition cost and increase perceived value.
   
   If you've figured out a way to produce or deliver a product for substantially less than a competitor, then, kudos to you. But, it's important not to confuse operational efficiency with margin deficiency. If your lower price is due to either a reduction in your profit margin, or you're cutting your marketing investment to conserve cost, you are actually compromising your competitive position, not enhancing it.
   
   One would think that decreasing price would automatically increase the perceived value. This is certainly more likely to be the case where, in a competitive market, consumers can compare identical products. But where products or services are not commoditized, perceived value may actually be set by price level. When Tiffany's can't sell something, they raise the price. A recent advertising research whitepaper observes that "discounting serves to lower the value of a product, service or brand because of an almost subconscious reaction by the consumer who believes that quality also has been lowered. Or, in a "value rebound," consumers begin to perceive the everyday price as too high. Many business owners claim they don't have a marketing budget. The reason is that they don't have enough profit margin to support the marketing budget. The fact of the matter is that they may have a huge marketing budget. It's just in the form of price reduction.


8. Exchange. Offer Before You Ask. When someone offers to do something on your behalf, it creates a sense of indebtedness which creates the condition of reciprocation. This can be as simple as a free sample or more sophisticated forms of negotiation where one begins with extreme demands or price levels, only to 'yield' to smaller demands. A sales technique that is often employed is called 'The Puppy Dog Close,' where the salesman suggests the prospect take the product (the 'puppy dog') home to see if they like, with the understanding that they can return it. By lowering the risk, the prospect has the opportunity to cross the commitment threshold. Another reciprocity concept is 'perceptual contrast' where a sales person offers a high priced version only to retreat to a lower priced option, reducing 'resistance' by framing the reduction in price as a 'concession.'

Used separately or together, these PERSUADE principles can be employed to both reduce risk and increase the perceived value of your offering, reducing resistance and creating a condition of 'irresistibility.' For information on how to PERSUADE people to embrace and buy your products, services and ideas, contact Dan: ddroz@droz.com or check out some of the great presentations, materials and blog entries on this site.