I am reading “Influence: The Psychology of Persuasion,” by Robert B. Cialdini
This is an excellent book. I highly recommend it. The book is very well-written and loaded with illustrative anecdotes, some extremely funny, some all-too-recognizable and some extremely tragic (such as copy-cat suicides). Unlike “Thinking, Fast and Slow,” by Daniel Kahnemann which is academic, “Influence” is aimed at sales and marketing professionals and loaded with practical advice.
All METARs know that markets are highly susceptible to influence. The fundamentals of an investment can be exactly the same (corporate profits, bond ratings, etc.) but the price of the investment can swing wildly under the influence of the crowd or statements by leaders.
A bank in Singapore was almost destroyed by a bank run. A bus driver’s strike caused a crowd to gather at a bus stop that was coincidentally in front of a bank entrance. Depositors erroneously interpreted the crowd as a bank run and quickly ran to withdraw their money. The bank had to shut its doors to avoid being sunk.
Books have been written about financial manias, panics and crashes caused by crowd-following investors. The past few years have seen absurd investments in meme stocks, NFTs and crypto currencies with no value.
The bottom line of the book is that the human psyche has evolved “click-run” “autopilot” programs which save time and effort in many situations. (The late Daniel Kahneman described this as “heuristic” in “Thinking, Fast and Slow.”)
Many decisions can be safely made on autopilot (e.g. wearing a specific style of clothing because your social group is wearing it). But many tricks and techniques are used by sales people (and other influencers) to trigger these click-run programs.
Think carefully and objectively when making decisions that could be influenced by others. Verify all data personally.
Thanks for these recommendation(s), Wendy. I’ve been heavily immersed in all manner of impression management/image manipulation techniques and books on them for most of this past year. Puzzling how the Lump of Foul Deformity could’ve bamboozled his way into my daughter’s life and the psychological tactics used to keep her shackled…and is attempting to still (a full 4 months post-divorce)
On my list for when I’m done with the latest on co-parenting with a narcissist.
As to the “verify all data personally”…it’s quite astounding how family court/divorce lawyers feel no compulsion to do this…no matter how preposterous a client’s claims.
Dale Carnegie wrote “how to win friends and influence people”
A neighbor of mine was cleaning out her apartment one day, and offered me her copy of “Winning Through Intimidation”.
When I was going through my mom’s things, I found she had a copy of a book about how to psychologically manipulate people.
Seems the culture has shifted from the Carnegie model of appealing to people, to the model of either cramming things down people’s throat, or tricking them.
Influence was recommended to me by the METAR board about 20 years ago. A very good book.
However, while Influence was strong stuff in the 1984 when it was published, The methods have been refined over the generations and Influence today by corporations over the masses has about the same relationship to 1984 Influence as Cocaine has to a coca leaf.
I would think that Influence should be part of any high school civics class today.
@steve203 when I interviewed for my first sales job in 1980 I was a research chemist with no sales experience.
The interviewer asked, “Do you think you will be good in sales?”
I answered, “You would know that better than I would. But I will say that I’m a completely honest person. My reputation is based on my honesty. I think that sales is a long-term relationship between people. That depends upon trust and honesty.”
They hired me. Over the 7 years I worked in sales I doubled my salary as a research chemist.
I stand by this philosophy today. Sales and marketing are undermined by cramming things down people’s throat, or tricking them. Any sale that isn’t a win-win is unstable and won’t be repeated.
My philosophy is the same in human relationships (most importantly in marriage). Every interaction should be positive for both or the relationship will be destabilized.
Wendy (met my husband in 1987 after reading Dale Carnegie’s book twice)
One of the former RS managers I knew left RS for a sales job at a Dodge dealer. He left the car dealer after a few months. He said he was “tired of lying for a living”. Another former RS person switched to selling insurance. He said “I never made so much money in my life, but I never had so much trouble sleeping”, the implication being guilt over what he told people to get them to buy insurance. Another former RS manger came to RS from being in sales for a chemical company. Don said he had to do a lot of scummy things at the chemical company, but he quit when his boss ordered him to hire a hooker for a client.
@steve203 all my customers were engineers and scientists and they were repeat sales…years of repeat sales. These were not people I could lie to even if I wanted to.
One of my customers from 1980 is still one of my best friends. A powerhouse superintendent who ran two 800 PSI boilers plus several smaller ones and the associated equipment (deionizers, etc.).
I wouldn’t take a sales job if I had to lie. I have to believe in my products and service. As for hiring hookers…no, the managers never tried that with me.
Yep, it’s been that way since the election of Reagan. But middle-class people voted for it because they liked the racist dog whistling.
Give them what they voted for – good and hard.
Ironically, the one area of American life where a middle-class person can get a fair deal is in the stock market. But only if they’re a long-term buy and hold investor in a low fee index fund. Unfortunately, only a small minority of investors have found their way to a low-fee index fund (i.e., expense ratio of 0.04% or less.) In 2023, the Investment Company Institute (ICI) (lobbyists for the financial services industry) reported that the average equity index fund had an expense ratio of 0.50% and the 90th percentile expense ratio was above 1.50% (see page 83 in the 2024-05 report.)
{{ Note: If you’re paying 0.50% per year in expenses, you need to save about 10% more to retire with a given account balance. If you’re losing 1.50% per year to fees, you need to save 30% more. (Skim is expensive.) }}
Health care tends to be a complete fraud with Americans paying twice the price of other large industrialized countries for a health care system that’s killing them 3 years sooner. The health care “fraud tax” is now more than $12,000/yr per family.
The idea that owning a home is a path to wealth is another lie. The real estate, mortgage, and home building industries are lying to you almost as much as the health insurers.
You add it all up. The average American family is likely losing about 1/3 of their income to “skim, scam and fraud”.
There’s a big difference in selling anti-corrosion chemicals to an engineer operating a boiler and selling a Medicare Advantage policy to a hapless senior citizen. American business thrives on poorly educated consumers that are easy to cheat. It’s like more than half the country.
The last place I worked was a Fortune 500 chemical company. We had a big meeting one day to unveil the “Company Code of Ethics” which included “An employee may not accept a gift from a vendor with a value of more than $20.”
Someone asked, “Are the people in sales covered by that $20 prohibition?” Answer, “Oh no. They can still do what’s required to make the sale.”
Pay special attention to the part about how the whole investment industry is based on “the illusion of skill” (i.e., market timing and stock selection).