If you would persuade, you must appeal to interest and not to reason.

Benjamin Franklin

In my opinion, this is powerful! The world works predictably in some ways and it’s like you have a secret to convince people around you. You could talk all reasons you want. But people will listen only what is of interest to them. Allow me share some case studies.

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In 2018, Bloomberg published an article that said Delhi had more e Rickshaws than all the Electric Vehicles sold in China since 2011 (to 2018). Wow, really? 1 City and that too a collection of humble Rickshaw drivers beat the world’s most populous and 2nd richest country. How did that happen? You know the answer- appeal to interest.

Here is how the conversation between a e Rickshaw salesman and the Rickshaw driver may have been like:

Salesman: Sir, I think you should switch from Cycle Rickshaw to an eRickshaw.

Rickshaw owner: Why would I do that?

Salesman: Sir, here is why. First with an e Rickshaw you can complete your trips faster. Your customers would love that. On ther other hand, if your customers stopped using your service and instead preferred others with eRickshaws, you may see drop in sales. Do you want that? Second, because you are completing your trips faster, you can do more trips each day and therefore you will earn more. Imagine, if your earnings go up, you can send more money to your family in the village! Third, you will be less tired at the end of the day. Earlier, on days when you didn’t feel up to it, you could only do a few trips. But with an e Rickshaw, you can earn even if you are not 100% energetic.

Rickshaw owner: Wow, I never realized that it had so many benefits for me. How can I buy one?

And thus, the conversation shifts from why e Rickshaw to how to buy one.

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Here is another example.

I have invested in Aavas Financiers, an affordable Housing Finance company. What struck me as odd was Aavas was lending to those at the bottom of the pyramid and yet it’s Non Performing Assets (NPA) were about 1% while a behemoth like HDFC which lends to prime customers had an NPA of 2%. How, I wondered.

There are many reasons for that, but here is one: Aavas lends only to people who are going to live in the house. They don’t just take the borrower’s word for it. Even after they lend the money, they visit the borrower’s premise to make sure he is living in that house. If he isn’t, they go back and increase the provisions on their books, because they think the chances of the borrower defaulting has gone up slightly.

Why, is self occupancy such a big factor in the lending decision? Because, a person who lives in the house for which he is borrowing the money has a vested interest to make sure that he doesn’t default on the home loan; if he does, he and his family would become homeless. It’s like how Romans made the Engineers that built the bridge sleep under it. There is vested interest on behalf of the borrower to ensure they pay their dues on time.

Here is an excerpt from a conference call of Aptus Value Housing whose business model is very similar to Aavas.

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And finally, one that I came across in the paper yesterday.

Paul Dirac was a Theoretical Physician and he won the Nobel Prize in Physics in 1933. By nature, he was a private man. His colleagues at Cambridge coined the unit “dirac”, which stood for 1 word per minute. So when he was awarded the Nobel prize, he wanted to reject it for the fear of publicity. So, how did the Prize committee convince him to accept it?

They told him that by rejecting he would become the first in the world to reject a Nobel prize thereby bringing him even more publicity! And thus, they convinced him to choose the lesser evil! LOL!

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At home, all of us appeal to each others’ interests. You know you are being manipulated, yet you find yourself agreeing with the fine points your wife is making.

-Happy persuading!