The rise of social media and influence monitoring tools like Klout means that we can now measure the previously invisible interactions that mark and transmit influence within human networks.
In the increasingly important Social Economy, influence is something that brands and marketers are struggling to understand and to harness.

The new connected economy

We are witnessing the rise of a new connected  economy where value is delivered across human networks. Relationships and personal interaction form the foundation of this economy, and the subtle currents of influence through these networks are being recognised as a powerful force which affects the broader economy.

This social influence has always been important, and has become enshrined in many cultures as class and political structures. The rise of social media has allowed the rapid and massive measurement of units of human interactions for the first time, leading to the development of a whole influence industry – as covered in this article on The rise and rise of influence.

For the last couple of hundred years our economy has been built on transforming our interactions into transactions.The most successful businesses have built industrial processes which deliver value and captured profit. Success in this economic model is measured by profit and capital. To increase the market for a product or service, industrial marketing strategies and tools (broadcast, advertising, interruption based marketing) were used to increase the number of consumers entering the sales funnel.

Influence trumps advertising

People are much more likely to buy a product because a friend recommends it, rather than because you saw an advertisment. Most consumers today avoid most of the traditional advertising channels. This is causing real headaches for big brands which have relied on industrial marketing campaigns to feed their business models.

Brands are turning to social media and advocate marketing to capture the power of influence over consumer buying decisions. Without understanding the economics of social influence they risk poor outcomes and even brand damage by applying industrial marketing models to the social mileu.

The Social Economy is Built on Relationships Within Networks

New social and technological transformations are causing an growth in a parallel economy of relationship and networks. In this economy, success is harder to measure – we are still learning how to measure engagement, influence, connection, and relationship.

Can Influence be converted into Profit?

Naturally industrial businesses want to know how this new currency of influence can be turned into the old currency – something they can put in the bank. Likewise many people who enjoy the Social Media experience are interested in turning their influence into cash – whether it is a “pay per tweet” model or representing a business as their “Brand Ambassador”.

Without understanding how influence works in a social economy we risk destroying social credibility if we attempt short term capture of profitability from influence – we’ll “kill the golden goose”

What is the role of influence and the network economy in business thrivability and profitability?

We’ll cover that further in our upcoming post and webinar on Brand Elevation.

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I realise there are also real downsides which we are only just beginning to see, but lets face it, it isn’t going anywhere, so we need to learn to adapt and make it work for us, rather than trying to avoid it.

1. You never have to not know the answer to something ever again.

2. Find people who love the things you love, and love what you do:

3. You can do what you love for a living:

4. You can have an influence over things you care about:

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Influence – Psychology of Persuasion 

Robert Cialdini, in his book Influence, the psychology of persuasion details his study of what influences people to make certain decisions.

He has found that across cultures, social groups, different occupations, geographies and industries, that the factors which influence people fall into a small number of principles;

He found that while people mostly think they use rational and reasonable apporaches to making decisions, in fact their decisions are often driven by simple, reflexive responses.

These universal principles of influence are:

• Reciprocation
• Commitment and consistency
• Social Proof
• Liking
• Authority
• Scarcity

Cialdini argues that even though people are capable of profound thought and analysis, most of their decisions are governed by a reflexive or instinctive responses humans rely on reflexive responses.

These responses are widespread in nature and often help prepare us for complex or time critical decisions (eg, run away from a lion), but aren’t always accurate or in our best interests.

Importantly, Cialdini points out that “compliance professionals” (Salespeople and con artists) exploit these reflexive responses to produce desired actions in prospects.

Why do people rely on these primitive responses for important decisions (and often don’t realize it, justifying their decisions with rational analysis)?

Our world is extraordinarily complex, we need shortcuts

Seemingly irrational reflexive responsives can be smart shortcuts – the most rational response available

“Civilization advances by extending the number of operations we can perform without thinking about them”

The smooth functioning of these principles relies on a social contract, and also it creates the social contract. For example reciprocal behavior is a powerful factor in governing our perception and behavior – it is hard to receive without wanting to give back.

This factor results from a social norm, but by complying with it (being influenced) we also reinforce the social norm – so the principles of influence are a social glue which enables the smooth functioning of society.

A recurring theme in Cialdini’s book is that used wisely and genuinely the principles of influence can be positive – it is when they are used cynically, falsified or exploited that we are aggrieved.

Not only does the con man or cynical salesperson exploit the individual – to some degree they undermine the social contract that our society runs on.

In terms of building a brand or social business, both inherently long term projects where trust is a priority, we should align ourselves with the principles of influence – in a two way relationship. We don’t just use compliance or social proof to ‘TRICK” people into buying from use – we need to be consistent ourselves, be genuinely likeable, establish real authority etc. Thus while it is important to learn how the principles of influence work and use them appropriately, they should be used accurately or we are effectively breaking some of the principles ourselves.

While these automatic responses are incredibly powerful and control the outcomes of many of the most important decisions in our lives, there is acutally little knowledge about them.

It is important we do take time to recognize how they work because we are vulnerable to exploitation by those who do know how they work.

Likewise, in our work and lives the majority of our efforts revolve around attmpts to influence the perceptions and actions of those around us.

Developing some sort of literacy around the principles of influence helps us ensure our attempts at communication and influence are effective.

Let’s review the principles of influence and the lessons they hold for us in creating a social business and becoming influential in our sphere.

The Principles of influence, according to Cialdini are:

• Reciprocation – when someone does us a good turn we are compelled to reciprocate
• Commitment and consistency – people will behave in ways consistent with past behavior or commitments they’ve made
• Social Proof – people behave the same to those around them, especially when they perceive those those people to be similar to themselves
• Liking – people are more readily influenced by people they like, including those similar to them
• Authority – People are more readily influenced by people in positions of authority (real or manufactured)
• Scarcity – People value things which are scarce, rarely available or which will soon be lost or are desired by others.

We’ll explore what these are and how we can utilize them in our marketing.

One answer, according to UC Berkeley social psychologist and sociologist Robb Willer is that the more generous we are, the more respect and influence we wield. In one recent study, Willer and his team gave participants each a modest amount of cash and directed them to play games of varying complexity that would benefit the “public good.” The results, published in the journal American Sociological Review, showed that participants who acted more generously received more gifts, respect and cooperation from their peers and wielded more influence over them.

“The findings suggest that anyone who acts only in his or her narrow self-interest will be shunned, disrespected, even hated,” Willer said. “But those who behave generously with others are held in high esteem by their peers and thus rise in status.”

“Given how much is to be gained through generosity, social scientists increasingly wonder less why people are ever generous and more why they are ever selfish,” he added.

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