3 Killer Persuasion Techniques You Can Learn from Billionaire Warren Buffett
Psychologist Robert Cialdini dissects what makes the world’s most successful investor so incredibly persuasive.
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If you want to persuade others, there are endless tips and tricks available. Most of them tell you how to package your argument to make it as convincing as possible, but according to psychologist Robert Cialdini, 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, he insists. 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.
"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," he writes in the L.A Times.
So how do you learn this skill? You can do a lot worse than observe billionaire investor Warren Buffett, 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. Buffett 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." That's a masterstroke, according to Cialdini.
"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 mistakes
Admitting your errors upfront might sound like a terrible way to persuade people. After all, who would have confidence in someone who bumbled badly in the past? But Buffett proves that showing you're human straight off can actually be a brilliant move, Cialdini also contends.
On The James Altucher show (hat tip to Business Insider), Cialdini praised Buffett's 2012 shareholder letter for this reason. Buffett kicked it off 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
Buffett understands that showing vulnerability can, paradoxically, strengthen your argument. As we saw in the last section, he does that by admitting missteps, but he also strives to come across as more human and believable by making fun of himself.
Every year at their annual shareholder meeting Buffett 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.