The power of persuasion is a critical tool for all entrepreneurs to learn.
As an entrepreneur, you need to persuade employees, investors, family & friends, and others that your vision and ability to succeed are high. While social psychology doesn't get enough attention in our schooling, it should be something that all entrepreneurs learn.
Persuasion is everything to an entrepreneur. Entrepreneurs try to sell something that doesn't' yet exist. They try to convince investors to give them millions of dollars that they can turn into tens of millions of dollars. They try to convince customers to pay for products that will solve their problems. They need to convince employees that the stock options they are providing as compensation will one day be worth something.
The 5 factors of persuasion have been commonly written about in social psychology and most recently introduced into curriculum in business schools to help students better understand what forces drive the behaviors and decisions of our peers.
The 5 Factors of Persuasion are:
1.) Consistency: The hardest of the 5 factors for an entrepreneur is consistency. Entrepreneurial organizations are dynamic and always changing as new information becomes available, yet in order to persuade, one needs to be consistent. Changing your story too many times indicates that your stories are not believable in the first place. This is why entrepreneurs need to have a sound vision and mission statement that they stick too amidst the dynamic changes an entrepreneurial firm undergoes.
2.) Social Validation: probably the most powerful of the 5 factors. Social validation can come in the form of press, investors, recruiting top talent, or signing a large customer. Previously successful entrepreneurs have a higher probability of getting funding and easily attracting strong talent to their new venture than unknown entrepreneurs because they have social validation in the context of entrepreneurship.
3.) Favor: People are easier to persuade when they like you. You need to be respected and well liked to convince a team to follow your vision and lead.
4.) Authority: You don't need to be the President of the United States to have authority, but people must view you as an authoritative figure. Having authority indicates that you can get others to listen and act based upon your
5.) Scarcity: Creating scarcity drives demand since you have publicly indicated there is low supply. Items become more desirable as they become less available. This is a key attribute for marketers who cleverly designed promotions such as "limited time only".
No matter what industry you are in, knowing how to persuade will be a key factor for success. Learn these 5 factors and practice them on a daily basis so that they can become routine in how you take action.