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The Best Ever Book Club is a special monthly series hosted by Best Ever founder Joe Fairless. In each insightful episode, Joe dives into influential books that shape the world of investing, exploring key principles, strategies, and lessons to enrich both the seasoned investor and the curious novice.
In this episode, Joe unravels the wisdom found in The Catalyst by Jonah Berger, delving into what it takes to reduce barriers and remove roadblocks to change. He discusses how the book's lessons can be applied to real estate and personal growth, inspiring listeners to reflect on their own financial paths and aspirations.
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Transcript
Paul Mueller:
Hello best ever listeners, viewers, book clubbers. We're here again for another edition of the Best Ever Book Club with myself, Paul Mueller and of course, Joe Fairless. How are you doing today, Joe?
Joe Fairless:
Hey, great. Looking forward to it.
Paul Mueller:
Yeah. Well, this month in September, we read The Catalyst: How to Change Anyone's Mind by Jonah Berger. And before we jump into some of our big takeaways and then also take some questions from... everybody who's here to join us. I want to remind everybody who's watching us on LinkedIn, that if you haven't signed up for the book club already, or if you want to be involved in discussion today with me and Joe here on Riverside, there will be a link in the comments for you to sign up for the book club. So you'll get all the reminders, make sure you keep up to date on all the events with the book club and what we're reading next. Also get to vote on what we're reading next. And I'll mention that a couple of times throughout to make sure that anybody who joins on later can find that link as well, and we'll keep dropping it in there. But with that said, Again, The Catalyst: How to Change Anyone's Mind by Jonah Berger. Joe, I'm really interested in this one just because I know your marketing background. I think there were a lot of things in this book that probably hit home for you, probably reinforce some things that you already do, but I'm really interested in what your biggest takeaways were or what the biggest things that really stood out to you from this book are.
Joe Fairless:
Well, lots of takeaways. Let's start with one. And that I think is the underlying concept for the whole book. And it's the question that we used to ask prior to reading this book and now we no longer ask when we ask a better question. Tony Robbins talks about asking better questions because when you ask better questions then you get better answers. So the question that we might have used to ask when attempting to change someone's mind is what might convince someone to change their mind and that's not good question. The question is more outwardly focused on what we want them to do and it's not as inwardly focused on what is preventing them from making the change. And that is the question that we should ask. Instead of what might convince someone to change, we should ask a better question which is, why hasn't this person changed already? What's blocking them? And by asking that better question, our mind immediately comes to potential solutions for changing someone's mind. And there's a lot to unpack with how to do that. But ultimately, that's the underlying theme for the whole book is why hasn't this person changed already? And what are the barriers that are blocking them? And now let's... talk about some tactics that will help identify those barriers and then unblock them so they can proceed with the outcome that we desire.
Paul Mueller:
Yeah, when I look at the five things highlighted here by the author, reactance, endowment, distance, uncertainty, and corroborating evidence, I feel like the endowment and the reactance were the two that stood out to me as the ones that I didn't necessarily anticipate. Obviously, distance, uncertainty. There's always uncertainty whenever there's any kind of change when you're trying to convince somebody of something, corroborating evidence. Obviously you have to provide some kind of evidence as to why the change is going to be beneficial for that person. But the reactants and kind of the human nature behind that and the endowment and how to overcome those by reducing that reactants and easing that endowment were probably the ones that stood out to me most.
Joe Fairless:
I made some notes throughout and let's talk about reactants, which thank you for pronouncing that word for me. I didn't know how to pronounce it. I had to look it up. So reactants isn't a word that I come across very often. So with that specifically, they gave a really good example with a nursing home. And I've read multiple studies that are similar to this. And it was a nursing home example where if residents at the nursing home are given choices about, would you like this plant today to take care of, or would you not like to take care of this plant? Or... What time would you like me to serve you lunch? 11.45 a.m. or noon. Seemingly insignificant choices that are provided to the nursing home residents, but it makes a huge difference in their happiness and how cheerful and how alert and active they are whenever they're actually given choices. I volunteer for hospice and it is something that I use prior to reading this book because again, I've heard of this already where I'll ask the individual I'm meeting with, when is a good time for me to come back? What works for your schedule? So having a say in the direction of our lives, surprise, makes us happier and makes us feel like we're more in control. And it's interesting because we can apply this to some additional real world applications. Do you remember the Truth Camp? Obviously you do, you read this book. They talk about the Truth Campaign and the campaign in the state that you live, Paul, in Florida, they were trying to stop teens from smoking and the more that you would tell a teen, stop smoking, don't smoke, the more they would light up and smoke. And the reason why, is people go against what they are told to do in order to gain autonomy. So what can we do with that information as it relates to us as real estate investors and as business owners? Well, how they are able to overcome that message is they don't tell people don't do it. Instead, they simply showed the results of people smoking with body bags. They would dump body bags, not with real bodies. I think it was like 1,200 people were dying a day from smoking. They dump them. in front of the office of big tobacco company and then they'd do a video and that was something that resonated with the teenagers. So what can we do as real estate investors? Well, we give options. For example, if you have investors in your deals, one thing that we've seen that resonates is having multiple classes, Class A, Class B. Which one suits you best? Class A... 9% preferred return with limited upside, Class B, 7% preferred return, but with upside. So people can mix and match and they have the autonomy and control to choose which direction they want to go and how to mix it up.
Paul Mueller:
Right. When you get them to tell you what their goals are ahead of time, you can reverse engineer and fit what you're offering into those goals and show that how they're going to be able to achieve those.
Joe Fairless:
That's right. There's a couple other... tactics I like, which is going along the lines of, we want others to take ownership over themselves so that they have the autonomy to decide what is the best result. Well, saying the phrase, I like your idea, and then building on that idea is powerful because then it's like, okay, if someone says, I like your idea, Joe, and I think... building on it, I think we could do this, this. Then it's our idea together versus if they said, yeah that's interesting and what about this? It's like, yeah but what about my idea? So including them along the way and acknowledging them by I like your idea, that's a really powerful phrase for people to take ownership of the idea and they can start persuading themselves versus you trying to persuade them. Yeah. And that's really one of the biggest themes, right? Is allowing people to make those decisions for themselves and change their own minds, hence the name, The Catalyst, right? In terms of inception and putting the idea in their mind and leading them to that place by themselves. It's interesting.
Paul Mueller:
One of the things that really stood out to me, Joe, was this concept. I mean, I'm a sucker for a good football analogy. So the zone of acceptance and the region of rejection where it's almost like this sliding scale where people are caught in this middle ground between these two end zones of being on one side of an issue or another or one thought process versus another. And really how you identify where they are on that scale and how the strategies differ in terms of how you're gonna get them over to one side because someone who's a lot closer obviously to coming over to that other side, your strategy is gonna be a little different if you got someone who's steadfast on the other side. I'm really interested from your perspective and really from a marketing perspective, how do you approach the people who are really in that region of rejection and really the toughest ones to convert, for lack of a better word, in terms of that education, right? Because you said so eloquently that it's really education and giving them the ammunition that they need to change for them to change their own minds rather than you prodding and prodding and prodding. How do you approach that from a marketing perspective when you've got somebody who feels like they're going to be a tough cookie to crack?
Joe Fairless:
Well, you don't try and crack them. You focus on the movable middle. Like the book mentions a phrase, the movable middle, and the author writes, smart campaigns don't try to change every mind. They focus on swing voters who are open to facts and arguments. So identify them using data and find others who have similar characteristics and preferences. And those are your target audience. And then you do more awareness and education for those others that you described. And if they eventually end up in the movable middle, then you start talking to them. And one thing to do specifically is ask for less, don't push for more. And that's something that the book talks about. And that's actually a really big insight for me as an apartment syndicator, because when a potential investor. speaks to one of our investor relations team members, well, the minimum investment's $25,000 in our deals. I mean, that's a lot of money, $25,000. That's a big ask for a lot of people. Now, we only work with accredited investors, but nonetheless, if you're accredited, still, $25,000 is a lot of money. And the insight that I got from that, big changes require asking for less, not pushing for more, is that... Instead of focusing on investing with us during those conversations, let's focus on having them sign up for our investor portal. Because in the investor portal, it has all of the information on the fund that we're doing at that point in time. And we're getting them to take a minor step, but a significant step by joining the portal. And then they can feel free to look at the investment information and we'll have some other things in there to encourage them to sign up. But that was a big insight for me because it's a lot easier to have the call to action. Now clearly if they want to invest immediately, then sure, we tell them how to do it. But for most of them during that initial conversation, it's so I'd like to learn more about what Ashcroft Capital is doing. So okay, cool. Let's get you to the portal that way you can get access to the information and when you are ready, then you already have that set up and you can easily invest. So that was a really big insight for me and we haven't implemented it yet. That's something that we're gonna be implementing soon. But it came directly from this book Big changes which big change is investing at least $25,000 now our average investor invests over a hundred thousand dollars, but big changes require asking for less, not pushing for more.
Paul Mueller:
Joe, that also gives you an opportunity to be really intentional about the education that you provide and provide them value for free over the course of however long they're a part of that before they become investors. So providing that value and proving, showing however you want to phrase that, I think it's a really interesting tactic.
Joe Fairless:
Yeah. And they talk about an example and it's a fascinating case study where I called it get all up in your kitchen in my notes, but it's to ask for less principal. They did not call it that in the book, the get all up in your kitchen. But that was just what I used to remind myself of the story where they had a consumer group call. So imagine, and Paul I know you read the book, so everyone else who might not have read it, imagine this. Imagine a consumer group calls you on the phone randomly and says, I'd like to send five to six people into your home to categorize all your household products. and do it for free. Are you interested? Hell no. No, I'm not interested. Talk to someone else. But they tried a different approach and they got twice as many people to say yes. So here's the approach they tried. They had that same consumer group call, but instead of asking if they could send five to six people into your home and categorize all your household products, they said, We just have a few questions about which household products that you own. Which ones you use to clean the dishes and which laundry detergent. Would you mind just answering a couple questions? Oh, okay. I would say no, but that's just me. But other people said yes. I probably wouldn't even answer the call. But other people said yes. They had two times of opt-in. And then a couple days later, for those people who answered those questions, then they called them back. And they said, now that you've answered some of these questions, would you mind if we bring some people just to categorize your household products and we'd like to complete the study? And they had two times more participants. So the takeaway here from the book is that once someone has agreed to a request, they become in their own eyes, the kind of person who does this sort of thing. Tony Robbins talks about that. The greatest driver of human behavior is acting how the type of person you believe you are would act. So going back to that portal example for anyone who raises money has a portal. You get someone to join the portal and then they agree to that request. And then after that, you grow the relationship or show them more stuff within the portal. And then it's right there and they've already taken that first step. So it's powerful. Thinking through what is a small related task. that I can get momentum with the individuals to do. And then once they do that, then they're thinking I'm that type of person that does these sort of things and they continue.
Paul Mueller:
The idea of people wanting to be consistent with who they think they are, was one that I definitely highlighted. Because if you can figure out who that is, then you can really play to that and allow them again to make their own decision based on who they think they are. Jonathan has a good question here. He actually left a couple of comments before. One of the things that stood out to him was, he writes, the best ways to convince somebody is not by hitting someone over the head, but by gently guiding them, providing choices and freedom like you talked about Joe, presenting information, asking good questions, pointing out areas of agreement, starting with small asks, all this stuff. But his question is, in terms of making things easy to try, free trials, free returns, and things like that, which the book discusses, how does this relate to your business and your brand How you were able to build that Joe.
Joe Fairless:
If we're talking Ashcroft capital, having people sign up for the portal, it's free to sign up for our portal as an accredited investor and you have access to investments and then that builds the momentum. So there's that. And as far as the best ever brand, a completely separate business, which is podcasts and website and all that conference, it's all free. It's already all free. to everyone, the only way we make money is through advertising sponsors. So we're passing out free samples every day with the best ever brand.
Paul Mueller:
The book talked a lot about, I'm trying to find the phrasing that it used, but the idea that there's a cost to change and usually that cost comes upfront and the benefit comes much later on. That's obviously the case whenever you're investing in anything. But at the same time, if you're deciding who you're going to invest with, if you've got somebody locked into that portal and you've got a consistent FaceTime with them and they start to. build some kind of relationship with you, then when the time comes for them to actually pull the trigger and invest, then you're there, top of mind, and you're the thing that they would be changing away from in this case. Again, I can't find the exact terminology that they used, but that was one of the things that really stood out to me in terms of just how married people are to their current circumstances, or their current friends, or their current city where they live, whatever that might be. The cost of an action, there you go, thank you, Jonathan.
Joe Fairless:
Yep, cost of an action, yeah, you've got to bring the cost of inaction to the surface and in the book it stated that the upside needs to be at least 2.6x relative to the cost of inaction for people to want to do something new. And I'll tell you before we wrap up, I've got a couple tactical things I want to mention for any apartment owners out there that I found interesting in the book. One way to increase apartment occupancy. and increase a retention of your current residence is to encourage your guests to have people over and to supply them with appropriate party items like things that you blow and they make that noise on what they're called in hats and stuff. Because the individuals who stay there are going to be your best marketing tool. So we should never ever charge. to rent an event space in our apartment community. We should instead give that space away so that others can come experience that apartment community, make that a gathering place. Obviously there are parameters for that, not getting too crazy with parties and other things like that, but conceptually, that was something that I wanted to call out for anyone looking to increase their occupancy and retention further. apartment community that they have. If it's a four unit, then it might not be an issue, but if you got an eight unit plus and you tend to have a vacancy, then encourage your residents to have some people over. And again, within reason, you'll have to put in some parameters. Word of mouth referrals are the greatest influencer of purchase intent. I've known that for a while and that's proven over and over.
Paul Mueller:
Yeah, it's interesting how simple that solution really is. Eric says that as a new capital raiser, I feel pressured to build relationships through providing content they actually care about when building a list. It seems imperative. How would you apply that principle?
Joe Fairless:
Which principle?
Paul Mueller:
It sounds like he feels pressured to build relationships through providing that content. I mean, obviously Joe, you've got the podcast. That's probably the primary content driver that you've ever had. But in terms of using that to build relationships, obviously you were able to build relationships with the guests that you had on the podcast over the years, which I think was the impetus for starting the podcast in the first place. But I think maybe what he's saying is beyond the people that you were having on the podcast and cultivating your audience. How do you apply this building relationship principle with the audience as well and really expanding that network like you did?
Joe Fairless:
How do you apply building your relationship?
Paul Mueller:
Building relationship with somebody that you're having a one-on-one conversation with on the podcast is one thing, cause you're able to build that rapport in that one-on-one Pritchett principle of kitchen. Get all up in your kitchen principle.
Joe Fairless:
Well, I'd say having them engage in something, just having low-hanging fruit that people like to engage with. I was just having dinner with someone who made a lot of money, non-real estate related, but a whole lot of money through digital advertising. And he said there was a long process that the individuals had to go through to complete what he was selling. The first step of the process was a fun quiz. And then after you do the fun quiz, then you've got a little form, and then after a little form, it's a big old form. And then that's an application, and he had to take people down a path, but he started with a fun, engaging quiz. That's one example. But I go back to the portal example as another. Get them inside the portal. That's relatively low barrier, and that increases trialability.
Paul Mueller:
Yeah. And I think the last thing here, Joe, before we break out of here, Jonathan had something that stood out to him, which also stood out to me. And it's the concept of to move a boulder, use a fire hose, that shotgun versus rifle approach. And I guess like, yeah, to the football analogy as well, in terms of having people in different zones on the field, but yeah, really focusing on those big movers, the shotgun versus rifle approach. I'm interested in any notes that you have on that. Cause it seems like something pretty relevant.
Joe Fairless:
I like that. I missed that quote. I don't remember reading that. Thank you for writing it, Jonathan. I remember reading the concept where if you have a finite number of dollars, which we all have, and you want to try to create change or interest in what we're doing, then it's better to consolidate those dollars over a shorter period of time and do multiple touches, generally speaking. And yeah, I like that a lot. And I agree. So that's how we approach advertising. That's how we should approach things is go in and have multiple touches. I think there's one other question I see Steve asked on. Did we answer Steve's question?
Paul Mueller:
We did not.
Joe Fairless:
Would you mind reading it?
Paul Mueller:
Yeah. Steve says in my non-real estate day job, I'm in business development and speak with potential clients where I actually did their job for years. Sharing this seems to create a bond and break down walls. Does the book cover anything around this topic?
Joe Fairless:
Oh, you're supposed to read it, Steve. We're not, it's a book club.
Paul Mueller:
It touches passively in establishing common ground, obviously, just from a relationship perspective, but I don't know that it brings to the table any real concepts around how to do that from the standpoint of changing somebody's mind. You have to establish common ground with pretty much anybody that you're trying to convince of anything.
Joe Fairless:
The book I recommend is Crucial Conversations. The book talks about the first thing we've got to do when opinions vary and stakes are high is establish a mutual purpose. When you establish a mutual purpose, then you build up from there. And I was just talking to a high level negotiator too. And he said the same thing, established that mutual purpose.
Paul Mueller:
Well, what you said at the beginning, Joe, also about following their idea with the and, and then building on top of that rather than the, but what about my idea thing? That's a good way to establish common ground pretty quickly, whether it exists already or not. Well, I think that's it for us for today, guys. Joe and I obviously really appreciate you guys both being a part of the book club, coming in here and supporting us of being a part of the conversation. We're going to follow up with an email with a replay of this for everybody who was here. If they want to come back and check it out. Also those who weren't able to make it. And we'll also follow up with an email so you guys can vote on what we're going to read in October, which is October, 2023 is already here, which is crazy to think about, but we're here and we're going to do it. And we appreciate all of you. So until next time, have a best ever month and we'll see you guys soon.
Joe Fairless:
All right. Thanks everyone.