Two lessons I learned from a car salesman

** These learning points I got from "The Personal MBA" book - Josh Kaufman, the #1 bestselling author in Business & Money, as ranked by Amazon.com.

1, VISUALIZATION

The most effective way to get people to want what you offer, is to encourage them to Visualize how their lives would be if they accept it.

As soon as you step onto the lot of a car dealership, the salesperson you work with has a single, clear objective: convince you to get behind the wheel of a vehicle for a test drive. The test drive is the most effective tool a salesperson has to convince you to purchase a car that day.

Until you’re actually driving a car, it’s much easier to treat a potential purchase in a detached way. You’re capable of rationally comparing makes and models, features, and prices. You can convince yourself that you’re “just looking,” with no intention of purchasing anything just yet.

Once you’re actually behind the wheel of a car, however, the emotional parts of your mind take control. You start to imagine what your life would be like if you owned this vehicle. Instead of dispassionately comparing horsepower and acceleration metrics, you can actually feel the power of the engine and the ease of handling, and you can imagine the respect (or envy) of your neighbors as you pull your attractive new vehicle into the driveway.

You’ve stopped comparing and started wanting. Once you start wanting, you’ll probably buy-it’s only a matter of time.

2, RECIPROCATION

Reciprocation is the desire most people feel to “pay back” for what they received. This is one of the most powerful psychological tendencies underlying human cooperation.

If you’ve ever had the experience of receiving a holiday gift from someone you didn’t send anything to, you know how uncomfortable this feels. If someone benefits us, we like to benefit them in return.

In Influence: the Psychology of Persuasion, Robert Cialdini provides an example of reciprocation in car sales. Car salesmen typically offer prospects a small gift up front.

“Can I get you a coffee? Would you like a soda? Some water? Cookies? Is there anything that I can do to make you more comfortable?”

It seems like a simple gesture of hospitality. It’s not. Accepting this small offer creates a psychological need to reciprocate, subtly stacking the deck in the salesman’s favor. Prospective car buyers who accepted this free offer were far more likely to purchase a vehicle, add optional accessories, and agree to less attractive financing terms.

As a result, these customers spent thousands of dollars more than the people who did not accept anything from the salesman while negotiating. That doesn’t make rational sense, because the coffee or cookies only cost the dealer very little, but Reciprocation makes it more likely the buyer will “pay back” the favor with a much larger concession.