Robert Cialdini is a psychologist who has devoted his career to researching what makes people decide to buy. For many years a professor of marketing at Arizona State University, his book "Influence: The Psychology of Persuasion" was a New York Times best-seller and cited in both Fortune Magazine and the Harvard Business Review.

Cialdini's research identifies six "lessons of influence" when interacting with existing or prospective clients.

The first three have limited relevance to financial advisors:

Commitment and consistency

If people commit, orally or in writing, to an idea or goal, they are more likely to honor that commitment. Even if the original incentive or motivation is removed after they have already agreed, they will continue to honor the agreement - for example, in car sales, suddenly raising the price at the last moment works because the buyer has already decided to buy.

Perceived scarcity

Scarcity can create a sense of urgency. For example, saying offers are available for a "limited time only" or there's only a certain number of items available encourages sales.

Social proof

People will do things that they see other people are doing. For example, in one experiment, one or more confederates would look up into the sky; bystanders would then look up into the sky to see what they were seeing. And of course, this phenomenon also leads to mini manias that lead to bubbles.

The last three weapons of persuasion are more relevant to the typical financial advisor:

Likeability

People are more easily persuaded by people who they like. Cialdini cites Tupperware parties - the more guests liked the host, the more likely they were to buy.

Strategies to be more likeable was the topic of a recent article. Click here for ten ways to be more likeable: http://www.clientinsights.ca/article/ten-tips-to-be-more-likeable

Reciprocity

The idea behind reciprocity is quite simple . People tend to return a favor.  

For example, if a colleague at work takes you out to lunch for your birthday, chances are when it's their birthday you'll take them out to lunch in return.

Advisors who consistently go the extra mile above and beyond what clients expect, especially when there's no short term impact on revenue, build goodwill that can enhance loyalty or lead to spontaneous referrals.

Deference to authority

People will tend to obey authority figures, even if they are asked to perform objectionable acts. Cialdini cites military incidents such as the My Lai massacre in Vietnam; the incidents in Abu Gharib in Iraq are more recent examples.

This also applies to the investment arena. Think of the impact on clients when they receive an article or video featuring Warren Buffett's views.  

Advisors need to look for every opportunity they can to buttress their recommendations with articles and videos from credible sources. This is true of clients and it's even more true when it comes to prospective clients. This is not a reflection on advisors' own credibility - it's just the reality of the world we live in.

And that's why you might want to email clients the New York Times or Wall Street Journal article concerning Warren Buffett's latest letter to investors.

To listen to an audio of Robert Cialdini discussing his research, click here: http://advisoranalyst.com/advisor/2010/01/27/the-psychology-of-persuasion-robert-cialdini-audio-presentation/