What Scammers and Fraudsters Can Teach You About Selling The Future
Twentieth-century Irish playwright George Bernard Shaw once said, “The single biggest problem in communication is the illusion that it has taken place.” He is still right. And it’s an especially big problem for those of us tasked with communicating the future. Yet with a little more forethought it’s entirely possible to persuade a person to buy into something that’s beyond what they can currently imagine. Or even to convince them to set aside today’s “firefighting” to better appreciate the challenges and opportunities of tomorrow.
It all boils down to an understanding of human nature. Not least an appreciation of how strongly we’re influenced by those pervasive and largely unconscious mental maps psychologists call “cognitive biases.” Ironically, this is something that the most deviant and devious elements in society—scammers and fraudsters in particular—are very adept at manipulating.
As the authors of Deviant Globalization: Black Market Economy in the 21st Century (Bloomsbury Academic, 2011) point out, those who engage in illicit activities have shown themselves to be initiative taking, innovative, and influential entrepreneurs. People who are extremely adept at shaping and influencing a particular kind of future; something many pro-social people could learn from.
Consider Brexit, for example. It became clear once the votes were counted that the outcome was unanticipated by both sides of the political divide. Yet would we not expect politicians — even if those unfamiliar with the concept of scenario planning — to have thought about and prepared for a range of possible outcomes? Because the future, while often spoken of as singular, is — by its very nature — a plurality. And number of things could happen. Yet the Stay camp appeared shell-shocked when a majority of UK voters chose to leave the European Union, and the Leave camp were similarly blindsided and unprepared for what needed to happen next. Neither side showed sufficient foresight.
A similar lack of forward thinking seems to pervade business life, even at the highest levels. A recent survey of C-level executives across a number of countries, including the U.S. and U.K., demonstrated the alarming chasm between how vulnerable most companies are to cyber attacks and how vulnerable they believe themselves to be.
This led Chief Executive magazine to suggest that CEOs, “aren’t taking cyber attacks seriously enough — and aren’t prepared for the public fallout when they occur.” In other words, senior leaders can’t even sell the future to themselves, preferring to take a head-in-the-sand perspective as to what might happen when cybercriminals come calling.
An inability to sell the future is not only a challenge for politicians, businesspeople or even professional futurists. It also affects entrepreneurs. For our book, FOUND: Transforming Your Unlimited Ideas into One Sustainable Business (Bloomsbury, 2016), serial entrepreneur Naveen Lakkur and I invited the CEO of the Founder Institute to write the foreword.
Adeo Ressi pointed out that, “Only about four out of every 1,000 startups founded each year create a global impact.” Which speaks to another inability to communicate the future. One where entrepreneurs fail to anticipate what their target market really needs and wants or are unable to persuade them that this future solution is attractive enough to buy into.
LESSONS FROM A SUPER-SCAMMER
Yet consider this. Like contemporary fraudsters such as Bernie Madoff, an early 19th century scammer called Gregor McGregor successfully conned hundreds of people in Scotland and France out of the equivalent, in today’s terms, of $5 billion. Yes, five billion dollars, from roughly 1821 to the mid-1830s. The Economist has dubbed McGregor the “greatest confidence trickster of all time.” And he achieved this dubious accolade by convincing people to invest in and even emigrate to a fictitious country he called Poyais.
Which begs the question, how can fraudsters like McGregor sell a fake future, when in most cases the rest of us can’t sell viable ones? More to the point, what is it that these scammers know or do that convinces others to buy into something they can’t see, touch, smell, taste or hear?
That question, ironically enough, points us in the right direction of a solution to this challenge.
But, first, a little more about McGregor’s scam. Because his story is pertinent to helping you discover that solution for yourself.
By all accounts, Mr. McGregor was a bit of a “dandy,” someone who likes to dress up and even affects some exaggerated style choices. In McGregor’s case this was the walking cane he liked to strut around with, and the cigars he loved to puff upon while still wearing his military uniform.
A former officer in the British Army, McGregor had fought in the Venezuelan War of Independence, among others. It was presumably his adventures in South and Central America that gave rise to his duplicitous idea. Because when he returned to Scotland in 1821, McGregor announced that he was to be called “Cazique” or the prince of a paradise named Poyais, part of modern-day Honduras.
Bear in mind that the people he conned were fellow Scots living in a cold, damp country eating a diet largely limited to oats, root vegetables, some dairy, fish if you lived near the coast, otherwise mutton or lamb. Imagine how his countrymen felt when McGregor began to describe the plentiful fresh exotic, juicy fruits that literally dropped into your hand as you pulled them off the trees in Poyais; the three annual harvests (in Scotland they were lucky if they had two); the forest full of game; the nuggets of gold that could be found in the sparkling rivers, full of fresh clean water.
And, for those who might be concerned with their safety, McGregor reassured them as to the friendly and helpful tribes people. Thanks to the presence of the British military in the region, they had learned to speak English and loved to be around Brits.
This was a time some years after the Napoleonic Wars, which Britain had won, when people were in an upbeat mood yet somewhat restless. Many were disappointed by how little money they were making from their existing investments in government bonds. So when Gregor McGregor came along, relating the once-in-a-lifetime opportunity presented in Poyais, he found no shortage of people interested to learn more about the bonds he was selling, which he said were paying twice the rate of those in the U.K., and to purchase tracts of Poyais land. Because, as McGregor was at pains to point out, unlike England, Scotland didn’t have any colonies to call her own. Presumably this made the proud Scots eager to populate this part of Central America and build a legacy for their children and grandchildren.
Two final details are relevant to this story. For those still skeptical of his story, McGregor pointed to a book he had for sale, written by an eminent doctor named Thomas Strangeways. This medical man also described Poyais in glowing terms, and offered an objective, third party perspective on the matter.
Meanwhile, McGregor reinforced the fact that there was a mere 8 million acres of land available (roughly equivalent to Maryland, Delaware and Rhode Island combined). Once the smartest, most savvy investors got wind of this wonderful opportunity — you can almost hear McGregor say — then it would get snapped up in a flash. Those laggards that didn’t jump at the chance would undoubtedly regret missing out, especially once they heard what an amazing future their fellow countrymen had secured for themselves.
Having set that context, let’s look at what Gregor McGregor did so successfully to sell a future life in the fictitious country of Poyais. In particular, to review that story through the lens of cognitive biases. The first of which you may be experiencing right now — unwittingly — as you think to yourself, “I would never have fallen for an obvious scam like that.”
Few of us believe we would, because of what psychologists call “hindsight bias,” or the “I-knew-it-all-along effect.” One of the tricks the mind often plays on us is to forget that there’s a huge difference between someone hearing a story like McGregor’s for the first time, and being told it after the event when the full, sorry facts known.
The truth is that when the first ships landed on the coast of Honduras, full of eager land purchasers and other émigrés, they found nothing like the attractive future that McGregor had brought alive for these people. The area of land they had “bought” was a mosquito-infested wasteland with no food and no water safe to drink.
While the settlers tried to make a go of it, most of them either died of disease or drowned in small boats trying to find fresh water and land where things might grow. The dream of living in paradise turned out to be a nightmare.
In this Google Talk you can find some helpful insights into the science of persuasion.
BUILDING ON COGNITIVE BIAS
The following are eight different cognitive biases that Gregor McGregor used to “sell” his version of the future to the Scots. After offering a brief definition of each, and relating them to the Poyais story, there are suggestions for how they can be employed by communicators today.
Attentional Bias: The tendency for people to pay attention to things they are already thinking about, or tend to think about a lot.
By tapping into his audience’s existing discontent — with the weather, the fact that government bonds were paying minimal returns, even the restlessness that sets in, perhaps, after the excitement of hearing about the military campaigns that defeated Napoleon — McGregor was able to speak to their emotional needs and concerns.
What this means for modern-day communicators of future outcomes is the importance of tying the message to whatever it is keeping a target audience awake at night. This is especially important given the influence of the next bias.
Hyperbolic Discounting: This term, often used by economists, means that people tend to favor whatever is going on in the present over what may happen in the distant future.
McGregor’s genius was in creating a very concrete bridge between the present and the future. He achieved this by speaking to every level of Maslow’s Hierarchy of Needs (over 120 years before psychologist Abraham Maslow developed his theory of psychological health):
- Basic needs like food, water, and security (as in the three annual harvests, fresh streams, and the friendly natives);
- Psychological needs such as belonging and esteem (how wonderful it would be for Scots to populate Poyais and for it to be regarded a Scottish colony);
- Self-fulfillment needs like leaving a legacy by purchasing a piece of paradise, to be further developed by one’s children and their children.
Again, when communicating future outcomes that may not even realize they want, it is vital to speak to as many of the audience’s subconscious needs, rather than do what so many do and bombard them with facts and figures and abstract concepts. Which segues neatly into the next mental blind spot:
The Picture Superiority Effect
The Picture Superiority Effect: This refers to the way in which we tend to remember pictures and images more than words.
Photography was yet to be invented when McGregor first began perpetrating his scam. But he didn’t need to fill his written prospectuses with pictures. All he had to do was to communicate a future in Poyais in a way that painted pictures in people’s heads. Describing the juiciness of the exotics fruits to be found there, the abundant game in the forests that could be shot almost without effort on the part of the hunter…all of these conjure up an image of the Poyais people could easily envision and therefore make real to themselves.
This speaks to an important insight that all communicators should realize: People will do a better job of convincing themselves and buy into their imagined future, than you will ever do. You just have to provide them with the right elements, such as vivid descriptions of the many benefits and the “why.” Advantages that they can share, through the next bias:
Bandwagon Effect: Alternative descriptions for this particular bias range from “social proof” to “sheeple.” In other words, people tend to follow the actions of others.
Once McGregor had persuaded his first few investors, it would have been relatively simple for him to leverage the bandwagon effect by ensuring they recommended his bonds and land purchase to their friends and family. All McGregor had to do was to point out how many people were already on board.
We outlined the value of the “bandwagon” approach to entrepreneurs in our book FOUND (an acronym for my co-author Naveen Lakkur’s five-step process that’s been proven to help founders significantly increase their chances of creating successful, sustainable enterprises). Under N, for Negotiate, Naveen talks about the importance of securing early customers.
In the context of our book, this is presented as a way for entrepreneurs to validate their ideas, as well as fine-tune them. That way they don’t spend the time, effort and expense of a major rollout only to find that no one is interested.
Anyone that is looking to secure support for their idea, revolutionary prototype or service needs to identify and concentrate on those people most likely to buy-in early on. The more influential they are, the better.
As I continually tell the clients that work with me to write books, it’s much easier to sell to one person that is already having a conversation with, and is trusted by, hundreds or thousands of people, than to try and reach all of those people individually yourself.
Yet how much trust others are likely to place in you should not be overlooked either. Which brings us to the next three biases to bear in mind:
Halo Effect: Given its name by psychologist Edward Thorndike, this describes how we are unconsciously predisposed to trust people and consider them in higher esteem (i.e., as if they have a halo over their heads), based on certain physical characteristics and personal traits.
In McGregor’s case, the fact that he was former military — and strutted around still wearing his uniform, along with a walking cane, smoking cigars — gave people the impression that he was a high status individual. Who could be more trustworthy than someone who would have given his life for his country, after all? (This was still several years before the first police force was formed in London.)
The fact that McGregor was so well-traveled and had first-hand knowledge of both South and Central America, are two further reasons why most people would have seen an imaginary halo over McGregor’s head as he was regaling them with stories about fictitious Poyais.
This stresses the importance of taking advantage of the way our brains automatically respond to certain cues, such as the way we make judgments about trustworthiness, as outlined by recent findings in the Journal of Neuroscience.
Little can be done about how tall you are (short of wearing high-heeled or “elevator” shoes), or how attractive. But they way we present ourselves — well dressed and with confidence, as Gregor McGregor certainly did — can unconsciously sway people into listening more to what you have to tell them. And being favorably persuaded.
If you are at all concerned about your ability to do that, you could always try this next bias, which McGregor used to good (but characteristically dubious) effect.
Authority Bias: As much as we might view established institutions with greater skepticism today, human beings still retain a deep-seated bias for believing what authorities and experts tell us. Especially if they fall into certain credentialed categories like university professors and Ph.D.s, medical doctors, and scientists to name a few.
Remember how McGregor told his investors about a book written by a medical doctor, describing the wonders of Poyais? The name of this author was Dr. Thomas Strangeways — the pseudonym McGregor used when he wrote and published this book himself. This is how he further duped people into believing that there was reputable, third-party evidence backing his story.
No one in their right mind would wish to do something as duplicitous as that today. However, authority bias points to the need to either find an influential authority figure to support your idea and message, or to engage in sufficient research that will support your argument.
One of the tips I give to the aspiring authors that work with me to publish thought-leading books is to remember to include the four Es when writing each chapter: Explain the concept simply and concisely; provide sufficient Examples; draw from third party Evidence to support your assertions, and provide Empowerment so the reader knows what to do next and how the material can be practically applied.
The next, penultimate, bias also speaks to the importance of interpersonal dynamics.
In-group Bias: We tend to show favoritism to others that we consider are like ourselves, who belong to some kind of kinship or “in” group.
Gregor McGregor had to flee Scotland when the details of his scam became public knowledge. But it’s not as if he learned his lesson because all he did when he reached France was to try his deception on the French. His duplicity was discovered more quickly over there, however, largely I imagine because he was an outsider.
In his home country, having a Scottish accent and with the surname McGregor — a clan made famous by folk hero, Rob Roy McGregor, otherwise known as the “Scottish Robin Hood” — Gregor benefited from in-group bias. This was not something he could rely on as much in France, even though the two countries had long enjoyed an “Auld Alliance” against their common enemy, the English.
Today, people are still motivated by a sense of belonging. It’s the reason we create off- and online communities with people that share the same or similar interests and values. If you can find some kind of commonality with whomever you are trying to communicate with, that will go a long way to increasing the chances that your message will be received favorably.
But what about the other person’s sense of risk? The final bias addresses that.
The Framing Effect
The Framing Effect: As rational as we all like to think we are, the way a problem or suggestion is framed — as positive (a gain) or negative (a potential loss) influences the extent to which we make risky decisions.
Gregor McGregor hedged his bets by taking advantage of both of these aspects of the framing effect. By presenting a highly positive frame in his descriptions of Poyais and the paradise that people would find there, he manipulated other’s willingness to take a risk and buy into his scheme. By stressing that there was a limited amount of land to invest in, and it was being snapped up fast by the more astute and adventurous investors, he introduced a negative (possible loss) frame, thereby spurring people to take greater risks than might otherwise be the case.
Similarly, when it comes to seeking buy in for a future-focused outcome, it’s important to point out the benefits of going ahead. But also what your audience is likely to miss out on (lose) if they don’t.
Again, there are so many cognitive biases you need to be aware of.
DON’T IGNORE YOUR BIASES
Not being aware of our own cognitive biases is one of the biggest impediments to leading people into the future. Arguably the most pervasive is the Curse of Knowledge. As a visionary and innovator you need to be aware that you don’t think or act like most people.
In fact, Rogers’ Innovation Adoption Curve (see Figure 1) illustrates what a small percentage of people willingly embrace a new, different and paradigm-shifting idea: something like 16%. Then there’s the “chasm,” the communication gap you must breach before getting through to the other 84% of the population that are pragmatists, conservatives and skeptics.
Speaking to your target market as if you would another visionary isn’t going to work. It’s like talking Swahili to an English-only audience, expecting them to understand you. Generally speaking, most people aren’t as excited by the technology behind an idea as they are being sold on what’s in it for them.
Pioneer Clarence Birdseye had to overcome that problem — although it took him a little while to figure it out.
You may recognize Birdseye as the inventor of the “quick-freeze” method — one that ensured fruits and vegetables that were frozen commercially maintained their texture and were as flavorful as when picked straight from the garden. Legend has it that Birdseye learned this “flash freeze” technique from the Inuits in Newfoundland.
Their technique of using ice, wind and sub-zero temperatures in the Arctic to quickly freeze fish resulted in their catches remaining as tasty and flaky after being cooked as they would have, cooked from fresh. Commercial freezing methods at the beginning of the 20th century took 18 hours, during which time the large ice crystals that formed damaged the cellular structure, causing the food to end up mushy and tasteless after cooking.
Despite his technological success, Birdseye was unable to persuade grocers or housewives to purchase his frozen products. So much so, that the company he worked with went broke. But, believing he had a hit on his hands, Birdseye persisted. After his next company got underway, they smartly devised a major advertising campaign that told the compelling story of “frosted foods.”
Consider how the following early Birdseye advertising slogans address a number of the cognitive biases outlined earlier:
“Raspberries in winter; June peas in March” : Speaks to housewives’ discontent with the fact that they couldn’t (until now) enjoy their favorite fruits and vegetables all year round. (Attentional Bias.)
“How to pick corn—real, farm-fresh CORN—during Lent!” : Notice how the words “farm-fresh” and the reference to “picking” conjure up certain pictures of corn that tastes as good as if you had just harvested it yourself. (Picture Superiority Effect.)
“Modern food for modern living.” : Who would NOT want to be considered modern? (In-group Bias.)
And the Bandwagon Effect takes care of the rest.
Plenty of people have shown themselves to be highly gifted at persuading people to buy into the future, or take a risk with an innovative idea or product. Not all of them, thankfully, are criminals. But as reprehensible as the likes of Gregor McGregor and his present-day scammers might be, there is a lot we can learn from them.
Always bear in mind the following two lessons when looking to sell a future solution to others:
- Address your own cognitive biases or mental blind spots and don’t assume that your audience will be as excited by your ideas, especially not for the same reasons you are. And
- Be aware of other people’s cognitive biases and learn how to make them work for you, rather than against you. Note least, be sure to bring the future alive to those that would benefit most from your ideas and vision of a better future.
|Liz Alexander, Ph.D.
Co-founder, Leading Thought and DrLizAlexander.com
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