How to Influence Someone

 

 

Is there a greater story of a book influencing an investor?

In the 1990s, Charlie Munger of Berkshire Hathaway read Robert Cialdini’s Influence. It affected him so deeply that Munger reached out to Cialdini to thank him, sending him a hand-written letter saying, “Warren and I have read your books, we’ve made hundreds of millions of dollars. This is our way of saying thanks.” The letter included Munger’s personal phone number, accompanied by included a single share of Berkshire Hathaway’s A-share. That single share, worth $70,000 then, trades at over $412,000 today.

The genesis of Influence was Cialdini the grad student getting tired of running laboratory experiments on other college students. He wanted to see what causes one person to say “Yes” to another in the real world. So the future Social Psychologist went undercover in the “influence professions” to see what he could learn as a trainee. These are the professions where success is measured by how many people you get to sign on the bottom line: car sales, insurance, even portrait photography by phone. How do advertising copyrighters influence consumers? How do charities get people to donate? What recruiters do to get people to enlist?

Cialdini found 6 commonalities in all of these fields: Reciprocity, commitment & consistency, social proof, authority, liking, and scarcity.

Today, he is Professor Emeritus of Psychology and Marketing at Arizona State University. He has sold over 7 million  books. Influence, which has sold over 5 million copies in 30 languages, is out with a new edition twice as long as the original: Influence, New and Expanded: The Psychology of Persuasion.

A list of his favorite books is here; A transcript of our conversation is available here. A full list of all of our prior interviews with Behavioral Economists/Psychologists is here.

You can stream and download our full conversation, including the podcast extras on iTunesSpotifyStitcherGoogleBloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Joe Moglia, who is the former chairman and CEO of TD Ameritrade (now part of Schwab), as well as former Head Coach of the football team at Coastal Carolina University.

 

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