Art Of Persuasion : 3 Techniques You Can Learn From Buffett

Psychologist Robert Cialdini dissects what makes the world’s most successful investor so incredibly persuasive.

0
106
Image via AARP.

There are endless tips and gimmicks available if you want to persuade others. Most of them teach, or tell you how to package your argument to make it as convincing as possible, but even if you heed every bit of advice out there on the topic, you’ve still ignored the most important part of persuasion.

A huge chunk of persuasion happens before people even know what you’re selling, according to psychologist Robert Cialdini. This “pre-suasion” is all about establishing your credibility and relationship, and it’s often the difference between people embracing your ideas or tuning you out.

According to a piece written by Cialdini in the LA Times, research done in the last fifteen years shows that optimal persuasion is achieved through optimal pre-suasion: the practice of arranging for people to agree with a message before they know what’s in it.

So how do you learn this skill? You can, for starters, observe the Oracle of Omaha himself, billionaire investor Warren Buffet, Cialdini contends.

1. Build Unity

When it comes to persuading people, trust often matters more than the content of your ideas, and you get people to trust you by demonstrating that you’re all on the same team. Buffet knows this and demonstrated this fact in his 2015 letter to shareholders.

Aiming to convince readers that his company, Berkshire Hathaway, could continue its improbably long run of incredible success, he opened by saying that the message contained in the letter, was “what I would say to my family today if they asked me about Berkshire’s future.” According to Cialdini, it was an absolute masterstroke.

“The result was a flood of favorable reaction to the letter (with headlines like ‘You’d be a fool not to invest in Berkshire Hathaway’ and ‘Warren Buffett just wrote the best annual letter ever’), as well as a per-share increase for the year of nearly five times that of the S&P. I can say that, as a Berkshire Hathaway stockholder, I have never since thought of selling any shares. After all, Buffett had given me the same recommendation he first declared he’d give to a family member,” he comments in the L.A. Times article.

2. Admit Your Mistakes

At first glance, admitting your errors upfront might sound like an absolutely horrible way to persuade people. After all, who in the right mind would have confidence in someone who messed up badly in the past? But Buffet proves that showing you’re human straight off the bat can actually be a brilliant move.

Cialdini praised Buffet’s 2012 shareholder letter for ‘admitting his mistake’. Buffet kicked off his letter with an admission that “for the ninth time in 48 years, Berkshire’s percentage increase in book value was less than the S&P’s percentage gain.”

“It’s disarming every time he says, ‘You know, we made this mistake.’ I believe the next thing he says to me — and that’s where he puts the strength of the last year,” Cialdini explains.

“He’s just readied me to listen to and process the next thing he’s going to say more deeply because he’s established himself as a trustworthy source.”

3. Make Fun of Yourself

Buffet understands that showing vulnerability can, paradoxically, strengthen your argument and point in a conversation. As we saw in the previous point by admitting his missteps, he also strives to come across as more human and believable by making fun of himself.

Every year at their annual shareholder meeting, Buffet and his right-hand man Charlie Munger play a video that makes them the butt of jokes. These videos “humanize them and make them seem like they’re not arrogant, know-it-all types, but very much in keeping with the image of who they are as honest, straight-talking people who will reveal their foibles if those foibles exist,” Cialdini told Yahoo Finance.

LEAVE A REPLY

Please enter your comment!
Please enter your name here