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MFDs should keep their sales pitch smaller but their message should be qualitative, said Niro Sivanathan, Organisational Behaviour Professor, London Business School at Cafemutual Ideas Fest (CIF) 2022.
Niro has shared with us some very important lessons on persuasion skills. One of the lessons that stood out was the significance of 'dilution effect' in sales pitch. He shared some interesting outcomes of an experiment. Let us look at this:
In the experiment, participants are divided into two groups. The first group is asked as to how much they would pay for a 24-piece luxury dinnerware set comprising 8 dinner plates, 8 soup bowls and 8 dessert plates. The average price of set turned out to Rs.13,200 (158 Euro)., Niro asked similar question to the second group but in this case the 40-piece dinnerware set comprises the same quality and quantity of plates and bowls along with a handful of broken cups and saucers. The average price came down to Rs.8000 (Euro 95) for the same number of plates and bowls.
Niro said, "Strictly speaking, these are an irrational set of numbers. The second set includes all elements you would get in the 24-piece set plus a few additional cups and saucer. Despite this, people are willing to spend less than two-third of what you are willing to pay for the first set. What you're witnessing here is what's referred to as the dilution effect. This is because the broken items diluted the overall perceived value of the entire set," he said.
This 'dilution effect' is prevalent in sales pitch as well. When we present an argument, however strong it may be, needs to be free of faults to be able to make an impact, said Niro.
Niro said that the dilution effect shows us that less can be more. “Rather than trying to convince someone with a long presentation or argument, MFDs or anyone else for that matter, should focus on presenting a small but quality argument. The longer the argument goes on, higher is the chance of making some weak points,” said Niro
