The Limitations of Knowledge, Part 1

I recently reread a book called The Power of Persuasion by Robert Levine. It’s not one of those books that sets out to teaches the reader to be persuasive, but rather it aims to teach the reader how to defend against tricks others use to persuade you.

There was a section were a car salesman named Mr. Gasio describes his 10-step car selling technique. What follows is a very basic summary of it, leaving out many of the finer details.

First, the dealership must get the customer’s foot in the door. In auto business, this means getting the customer on the showroom lot. Sometimes customers come in on their own, sometimes the salesman needs to push in front of his competition.

Steps two and three, selling himself and the dealership. As Gasio says, “There’s a 5-minute window to decide whether or not the customer likes you. If they don’t like you, they’ll use you for the information you have and they’ll dump you. If I don’t feel I’m in control after the first five minutes, I’ll turn you to a new salesman.”

Likability is a theme revisited in the book repeatedly. When a salesman is likable, the customer’s guard goes down considerably. And when a customer’s defenses go down, that is when he’s most open to manipulation. The same goes for love. When you’re in love, you’ll put up with behavior and manipulation you’d normally never tolerate or put up with normally.

Next he sells the dealership’s credentials. These early steps require small commitments from the customer in the form of acknowledging the credibility of the establishment. More importantly, however, they start the clock ticking. This isn’t a trivial matter. One of the early goals is to slow the customer down. The passage of time, in fact, almost always works in favor of the salesman. First, the longer the time spent with the salesman, the more likely the customer is to feel he owes the salesman something according to the concept of reciprocity. We know that since the salesman is working on commission, the time he spends with us is, in a sense, costing him money. If he’s established a good rapport with us, we’re left with a feeling of obligation (reciprocity rule) to do something for him in return. The instinct for reciprocity is very much a part of human nature and something we often follow unconsciously.

There are other ways that the passage of time psychologically works against the consumer. Since this is a society where time is money, it means any time we spend at this dealership feels like an investment – a deposit of sorts. If nothing productive comes of the visit, we’ve wasted our time. We’ve blown our deposit. It’s the sunk-cost trap.

As Gasio says, “You have to stall them. The main thing in sales is you make it such a long process they don’t want to go through it again.” If the salesman hurries the tour and tells the customer the price right away, it rarely leads to a sale. “The salesman needs to cover all the steps in their precise sequence,” Gasio observes. “Before we talk about price, I need time to get you to surface all your objections. As long as you’re willing to express your reservations, I’ll find a way to overcome them. Otherwise, I know you’re not serious and I’m going to ‘broom’ you [sweep you off the lot]. The rule is ‘If you don’t have time to drive it, I’m not going to give you a price,’” Many salesman – Gasio included – don’t wear a watch. Like casinos without clocks or windows in Las Vegas, they plan is to get the customer to stay longer than you’d planned.

Now the focus turns to the product. Step four is “the walk,” where the salesman walks the customers all around the premises, even if they object. The salesman gets you in deeper and deeper by “giving you” as much of his time as possible, which as mentioned before makes you feel compelled to reciprocate somehow. Gasio points out that time also works for him in another way: “Maybe I waste so much of your time that the next dealership is closed.”

“All the while, I’m establishing in you a mindset of obedience to my authority. The walk begins when I say ‘Come with me.’ I’ve given you an order. You can choose to follow it or reject it. But I can tell you from experience that almost every customer is going to come with me. I get you to follow me in as many ways like this as I can.” By getting the customer to comply with a series of small requests [“come this way,” “take a look at this part”], the customer subconsciously is training himself to follow the salesman’s lead and submit to his authority.

Some agencies teach salespeople to do the “turn and walk” if they feel themselves losing control. “If I see you fading off while I’m showing you a car,” another salesperson in the books says, “I turn and walk toward a different car. Or toward my office. 99% trail right behind me. I walk. You follow.”

Step five is the “walk around.” Sometimes known as the seven point walk around. You walk around the car as salesman explains the features.

Step six is the watershed moment, the test drive. Sometimes dealers start the test drive by surprise, like asking you to get in the car, then hopping in and taking off without asking if you want a test drive. Gasio: “When I worked for Ford, the front seat made it easy. You’d set the customer in the driver’s seat and then you’d scoot them over and we were gone, off the lot and on the demo drive. Sometimes I’ll say. ‘I know you may not be ready to buy this car, but I’ll get ten points if you go with me on a test-drive.’ (There aren’t any such points, naturally.) Once we start, I always drive far enough away so you’ll have a nice drive back when I put you behind the wheel.” The overriding goal of the test-drive is to build “mental ownership.” One trick is to refer to everything about the car as “yours” during the test-drive: “Let me show you how to adjust your mirrors.” “How do you like your sound system?”

Some push mental ownership principle even further by allowing you to take the car home for a while. But the test drive alone is often attachment enough. Test drive is usually followed by the “assumed close.”

Step seven is to request a hypothetical commitment. “I ask you ‘how much would you be willing to pay for this car to buy it today? Give me an offer, even if it’s ridiculous, to bring to my boss.’” They then increasingly ask for more aggressive hypothetical commitments.

Step eight – if you’re trading in a car – is the appraisal process. Step nine, the customer is asked to commit money. Step ten, close the deal.

After reading this book, I felt incredibly armed against shady sales techniques. I knew if I was ever on a used-car lot I could hold my own. If I had to face off against a salesman trying to push me into buying, say, a gym membership, I would be aware of all his tricks as he gave me the tour. Right?

Well, a few nights after reading the book, a friend and I went to a luxury boutique hotel with a bar. We just planned on giving ourselves a tour of the place, as it was quite a visual spectacle. A very charming member of the staff popped up and asked us if we’d ever been there before. He was a very talkative and jovial fellow, and we immediately liked him. He told us all about himself. Then he told us all about the hotel, raving up and down about it. He told us about its pedigree, the designers, the owners, the short history, the people who had stayed there, the hotel’s commitment to excellence. Then he showed us all the features of the hotel, taking us on different floors and showing us various themed dens, a movie theater, statues, and conference rooms.

It still never occurred to us we were being sold something.

Later on, after we were done with the tour and we were back in the main den, he asked us if we wanted a drink. The den had a nice, luxurious old-world feel to it, so I, caught up in everything, decided to order a scotch even though I wasn’t really thirsty. Remember, we never went inside the hotel even planning to drink; we just wanted to take a look.

When that bill came, it was the most overpriced glass of scotch I ever ordered. Under normal circumstances, I’d never have bought a scotch with a price like that. This night however, I was so caught up in the mood it never even occurred to me to check the price before ordering it. Because I like the guy, started thinking of him as a new friend and naively started trusting him to look after my best interest.

I realized after walking out that I had been hustled. And worse, by all the exact same techniques I had just read about and arrogantly thought I was now so immune to. Incredibly humbling. He got our guard down by being likable. He sold himself, then the establishment. He gave us “the walk.” He had us following him around. He committed us to wasting as much of our time as possible before ever putting us in a position to buy something, and…you get the point.

This is an example of the limits of knowledge. You can intellectually know something inside out, but using it in practice is something altogether different. Unless you’re used to putting that knowledge to use through practical experience and repeated immersion in relevant scenarios, it’s strictly academic, not useful. It’s similar to how you can study and study language textbooks to the point where you feel you’re more fluent in a language than you actually are. But when you attempt to actually conduct a conversation in that foreign language, you freeze up, second guess and sound as horrible as ever. You’ve improved so much less than you convinced yourself you did while you were isolated with your books.

We’ll expand on this topic in the next installment.

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