www.assentcompliance.com Assent Compliance looks at psychological mechanisms to improve supplier conversion rates around product compliance and data collection. This unique spin on classic psychology research takes readers through a variety of studies and their application to supply chain. Visit http://www.assentcompliance.com or email info@assentcompliance.com for more information.
3. INTRODUCTION
In an average week Assent has the opportunity to interact with hundreds of
compliance managers at a multitude of different firms in almost every vertical.
Through years of interaction with supply chains -ranging from electronics, to
retail, pharmaceutical, defence and medical - Assent has authored this ebook
as a culmination of supply chain best practises as a means to help gain
compliance data from suppliers.
Each section of the ebook is supported by academic research and real word
Assent supply chain experience. While supply chains are as diverse as the
tactics we cover in this ebook, not every tactic is suited for every compliance
program or firm. However, many of the tactics can be used in almost any supply
chain interaction.
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4. 1 How an ounce of social
proof can be worth a pound
of compliance
In a classic psychology experiment Stanley Milgram and colleagues had research assistants walk into a busy
New York sidewalk, stop and look skyward. The vast majority of passerby’s simply walked around the assistant
and continued on with their day. When researchers added assistants to the group of skyward gazers to make
the total four, the rate at which those passing by stopped and mimicked the action increased dramatically
(more than quadrupled).
We’ve all also seen the famous McDonalds reference “Billions and Billions served”. Social proof is a very strong
motivator and one that is very widely recognized. In the compliance space, when communicating to suppliers
that compliance data is required, we can see positive increases in compliance when messages include a social
proof. For example, next time you’re sending out communications to your supply chain try a message like:
“All of our valued suppliers are asked to complete our compliance survey. Many have already
submitted the completed document, so please help < your firm name> in our ongoing
compliance efforts. “
Assent has found that referencing that other suppliers are in the same position and some have already
complied will, generally speaking, increase response time/rates when compared to control messages.
Have you updated your copy recently?
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5. 2 When a supplier reference can
kickstart compliance
No matter how you’ve structured your compliance program, you’ll need to have your suppliers “buy in”.
What are some of the more effective ways to do this? To start making the process as easy and painless as
possible is obvious. An example of this is Assent’s “2 Click to Compliance” automated data procurement
portal. Yet regardless of the data collection mechanism, the first step of the compliance journey is “buy in”.
In a study on influence, researchers wanted to
see if they could increase the rate at which
hotel visitors participated in a towel recycling
program. They first tried to promote the
initiative by placing a sign in the hotel
washrooms. By adding to the copy of the
message “Guests in the same room as you are
staying have opted generally opted in”
researchers found that compliance rates
increased on average 33%.
33%
When communicating the nature of your compliance program to your suppliers it can be beneficial to
obtain a supplier reference:
The simple message, such as, “The compliance department at “Acme corp” found that our compliance
program was simple and easy,” has in, many instances, increased buy-in rates for data submission and
speed. Do you have supplier references at your company? It might be worthwhile to reach out to some
suppliers that you have fostered a strong relationship with, and see if your compliance rates increase.
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6. 3 When less is more in the
compliance space
When making decisions fewer options can actually be more in terms of compliance. In 2 separate studies
where participants were presented with more options rather than less, compliance tends to decrease. This
is known as the paradox of choice. We all like to think that having more options is best, but in many cases
this paralyses the decision makers.
Sheena Iyengar, a behavioral scientist, looked at company-sponsored retirement programs and associated
participation rates. Note that this is peoples retirement, not submitting compliance data (one would think
this is a lot more important). When participants were offered more choices the participation rate dropped.
For every 10 choices offered participation decreased by 2%. When only 2 funds were offered the
participation rate was 75%, yet when 59 funds were offered the rate dropped to 60%. The study was
replicated with consumer products using jam. Consumers who had a choice of a variety of jams purchased
in only 3% of cases, contrasted with 30 percent who were offered only a very limited range of options.
When developing your compliance program, the data suggests that the means by which suppliers can
submit data should be limited to 1 or 2 options at most.
Don’t:
Do:
» Suppliers please submit your
REACH/RoHS/Conflict Mineral data
via: portal, email, fax, corporate level
declaration, division level declaration,
our custom survey, EICC form, test
reports, IPC 1752A and or other.
» Suppliers please follow our
automated wizard to guide you
through the data submission process.
Or
» Please fill out our custom survey
which covers all compliance related
matters.
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7. 4 How can your old compliance
program influence your
new one?
Anchoring is technique that has been used in sales and marketing for years, but can it be applied to the
compliance space? We think so. Anchoring takes place when there are prices or options that are expensive
or intensive. According to research by Itamar Simonson, a decision researcher, people tend to choose
compromise choices, meaning if there is a high-end or intensive option, a middle option and a lower
option, the natural tendency is for people to choose the middle option. While this research is clearly in the
consumer domain, it can easily be transferred to the compliance domain.
Let’s say you’re in the process of adopting a new automated approach to data collection by using the
Assent compliance platform. Communicating to suppliers that the old manual, labor-intensive approach is
being swapped out (anchor high by noting this process took much more time and effort) for a solution that
is much quicker and easier will influence suppliers to adopt the new process. It is important, however, that
in the long run this process is easier and quicker or else the supplier might feel duped. In general,
referencing that the new compliance program will save time on both ends of the equation opposed to the
old process, will be helpful when persuading your suppliers to buy in.
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Example: “By using ‘new solution’ we are replacing ‘anchor high program’ to save you time and effort.
The new program achieves this by ‘ x’”.
Assent Example: “By using the Assent data collection portal we are replacing lengthy email exchanges
and the redundancy that goes along with them. This will automate collecting data for restricted substance
lists and also give you, our supplier, free tools to build IPC and EICC forms which can be used in the future”.
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By anchoring your communication and letting your suppliers know you’re saving them time by
implementing automated solutions you can increase your take rate very quickly.
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8. 5 Do compliance threats
persuade or paralyse?
Research has demonstrated that fear arousing messages generally stimulate action, with one important
exception: when the fear producing message describes danger, but does not describe a clear means of
reducing, escaping or stopping the danger from occurring. In a study conducted by Howard Leventhal and
colleagues, the researchers tested a communication about the dangers of not getting a tetanus shot. The
message that was most effective versus the control was the message that induced fear but also outlined the
specific steps and process readers could take to obtain a vaccine while assuring them that this was a simple
option.
In the compliance world, threats are very real. Some compliance programs call for suppliers to be
disqualified from RFP’s, contacts /PO’s to be pulled or corrective action to be taken. While the threat of
corrective action for the supplier will help influence them, it is of the upmost importance to clearly
communicate the steps your suppliers need to take to avoid these penalties.
Research indicates that your compliance program should include outlining what the corrective actions steps
are, but to also be crystal clear in outlining the data needed and the means to submit it.
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Example: “ <Your Company> is committed to having compliant products. As our supplier we need your
help. Please submit <compliance data required> through the Assent supplier portal and this will keep you
in good standing and avoid any business disruptions, breach of contract or corrective action”
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Throw in some social proof: “suppliers just like you have already submitted using this process” and a
reference: “It was quick and easy” - Supplier X, and you might have one of the most persuasive supplier
communication strategies in the world!
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9. 6 Minty fresh supply chains?
Think back to the last time you were out for dinner. When the waiter or waitress
brought the cheque at the end of the evening did they leave a little something extra?
Behavioural scientist David Strohmetz conducted a study to determine what, if any effect leaving candy
at the end of a meal had on the tips that patrons left for their respective servers. In the first trial tips
increased 3.3 percent when servers left 1 candy opposed to no candies. In the second trial tips increased
14 percent when 2 candies were left for each patron. In the third group when the server pointed out that
they were leaving something special tips increased 23%.
While these findings may be well and good for wait staff, how does this relate to
compliance managers?
Fostering relationships with your suppliers is one of the most important facets of business. Your supplier
are essentially the life blood of your company. It’s a fine balancing act, but getting the right price,
agreeing on terms, gathering data, and happily rewarding the compliance department that successfully
completed your compliance program could pay future dividends. At Assent we offer turnkey services,
meaning that we collect all required data from your supply chain.
Do we have some tricks up our sleeves? Absolutely. Your high-value suppliers will, on occasion, get
bottles of wine through wine.com, personalized thank you cards and java on us. Our data suggests a little
love can go a long way, and this can increase the speed and accuracy of future compliance requests. Don’t
have time to share the love? No problem, that’s what the Assent turnkey program is for.
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10. 7 Small Requests -- Large Gains.
What do test drives, lawn signs
and compliance have in common?
Imagine you get a knock on your door and a city official asks to install a large, permanent sign on your lawn
that reads “Drive Carefully”. There will be no cost, and the pouring of the cement and digging up of your
lawn will be taken care of by the city. This is to promote the city’s new “drive safe strategy”. How likely do
you think you or your neighbors would be to comply?
In a study conducted by Jonathan Freedman and Scott Frazer the answer was 17% of people. That’s
surprising enough. How were the researchers able to get that figure up to an astonishing 76%? Prior to the
initial test, researchers went to a sample set and asked if they could place a small sticker in the residences
window that displayed the same message. Weeks later when they asked the same sample set for the larger
more permanent commitment their rate was wildly higher than the control group where no initial small
ask took place. This is whey car salesmen are so adamant about taking a test drive.
This is what’s called the “foot in the door” effect.
Depending on the complexity of your compliance program you can use the foot in the door effect to your
advantage. One of the best ways of achieving this is in the initial contract phase. Adding in a simple section
or clause that states that the firm is willing to adhere to the compliance policy and process is often all it
takes to get a buy in. The foot in the door effect for compliance is also directly connected to finding the
right contact. Chances are that your firm only has a sales contact at your suppliers firm. Once you locate the
compliance manager and have your “foot in the door,” so to speak, it’s easy to ask for other restricted
substance list information or any compliance requests for that matter.
One of the benefits of using Assent is that we currently have 1000’s of pre-existing relationships or “feet
in many compliance department doors” so it’s easy for us to obtain this data. When we bring on new
customers to our platform its not uncommon to have high percentages of contacts pre-existing which
accelerates the speed of the program and the data collection process.
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11. 8 How to use Jedi Persuasion in
the Supply Chain
In the movie Star Wars – Return of the Jedi, Luke Skywalker proclaims to Darth Vader “There is still good in. I can
sense it” Is it possible that these simple words could have influence both on persuading the cinematic super villain
and your stubborn suppliers? The research points to yes. What Skywalker is doing in a technique known as
“labeling”. When he tells Vader he senses good in him he is transporting that trait onto him. This can be done with
traits, beliefs or attitudes. In research conducted by Alice Tybout, by simply labeling the indented traits on potential
voters they were able to increase suffrage rates by 15%. Airlines routinely use this technique when they state at
the end of the flight:
“We know you have lots of choices when selecting an airline. Thank you for selecting ours.”
They are using the implication that since there are so many choices you must have chosen ours for good reason.
In the supply chain the labeling technique can be used to help with difficult suppliers.
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“We know you always want to help us stay in compliance which will help us continue to be a
valued customer to you”
“We know compliance is important to you at ACME corp, so can you please fill out our
compliance survey through our automated portal”
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Using a little labeling can help you become a compliance Jedi and get full supplier buy in, in record time.
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12. 9 Do you think you’ll succeed?
Compliant companies say yes
When potential voters are asked prior to an election if they think that they will vote (making a prediction)
researchers Anthony Greenwald found that the likelihood of the respondents voting increased 25%. There are
two factors at play here. When people are asked to predict if they will take part in a socially desirable activity
they are compelled to say yes. Secondly, after making that declaration of agreeing to conduct the socially
desirable activity, people will feel more compelled to actually undertake it. In one study a restaurant owner was
able to decrease the number of no shows by changing the reception message from “Please call if you will be
unable to make the reservation” to “Will you please call if you will be unable to make the reservation”. The no
show rate went from 30% to 10% overnight.
In the compliance space, asking for suppliers to make compliance commitments will increase the programs
success.
“Can you submit data X,Y by Date Z through our automated portal?”
“Can you complete our compliance survey by X Date?”
Assuming the respondent answers “yes” then asking if they need any assistance or asking why they think that
they will be able to meet those dates will add reinforcement to the idea and expedite the compliance rate. At
Assent, through our turnkey program we work with your suppliers and do our best to get set hard dates so that
data collection is completed at set milestones. This technique has proven to be very effective.
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13. 10 When asking for a little can go
a long way in compliance
Charities need donations. This is how they fund their philanthropic activities. In a research study conducted for
the American Cancer Society, several different messages were tested. The theory was that letting potential
donors know that “even a penny” would help increase the overall average donation rate. When the messages
were tested:
“ Would you be willing to help by giving a donation” Vs “Would you be willing to help by
giving a donation? Even a penny would help”
The donation rate increased from 28% to 50% in the “even a penny would help” condition. Now we don’t expect
you to only accept limited data over the long term but often times even having a supplier login once to your
custom survey or supplier portal is all you need to get them on board with your compliance program. Are you
collecting a wide range of testing data? Perhaps asking for that they have right away, even if the reports are
for a previous restricted substance list will help your overall compliance program in the future.
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“Can you complete our compliance survey? Even logging in to check it out right away
would help”
“Can you upload your test reports for product X through our portal? Even the reports for
the previous REACH candidate would be a good start”
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Your job as a compliance manager is to get from point A (where you are at right now) to point C (compliant) as
quickly as possible. Sometimes a small start, small ask or just a little compliance can go a long way.
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14. 11 Why compliance outsourcing
might be the most eective
option
Outsourcing data collection and compliance related activities has many advantages. While we have entire
case studies to support this claim some of the reasons are:
» Cost savings
» Leveraging economies of scale in experience, contacts and infrastructure
» Automation through software
» HR time/cost savings
Another principle of influence is also at play. Like most companies you want to claim that you are the best to
your customers, authorities and the public in general. Though boasting about your compliance program won’t
be as influential as having someone else boast on your behalf. How do you show off without showing off?
Have an expert do it for you. Stating on your website that you take compliance seriously and have invested
in a complaint management platform sends a strong message to customers and to clients that you take
compliance seriously.
While there is no REACH compliant or Conflict Mineral Compliant logo, associating yourself with your
compliance service provider gives a reference similar to that which personal care companies use when they
have a doctor in their advertisements. Publishing a case study, whitepaper or video with your compliance
vendor can be used as a sales tool, creative for your site and proof of your program and compliance
commitments.
At Assent we host regular webinars with our clients informing suppliers of regulatory challenges, we work
with our clients to answer RFP’s, we deal with enforcement officials, we work with accounting and audit firms.
Having a compliance ace up your sleeve can be a cornerstone of a complete compliance program.
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15. SUPPLIER MIND CONTROL
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CASE STUDY
Please, please… don’t think of a pink elephant.
You did, didn’t you? Assent mind control division success!
Before we examine some jedi techniques to best procure data from your supply chain
let’s give some background.
The Assent Compliance software platform comes with bi-directional supply chain
communication, task management, analytics and data exchange features. Clients use
this feature set to gather compliance data from their supply chains for a variety of
regulations like REACH, RoHS, Conflict Minerals and dozens of other regulations that
Assent supports. Within this dashboard users can also manage and send email and
information requests to their respective supply chains.
We recently had 2 electronics manufactures with roughly the same market cap, size of
supply chain and products launch with Assent. This was the perfect opportunity to do an
analysis of what techniques were working best and what weren’t. While there were
some small differences in firms sample sizes this review does give some very relevant
best practises.
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16. COMPANY PROFILES:
» Firm Size: ~1B Market Capitalization
» Suppliers: ~ 1500 (this was not the entire supply chain for either firm but one business unit)
» Sector/Industry: Electronics
METHOD:
Using the Assent Compliance dashboard, each firm would contact their respective supply chains for conflict
mineral information as well as REACH declarations of conformity. Suppliers could use the Assent IECC form
through a supplier wizard or upload their own. (Create or Upload) as well as use the Assent system to make
declarations for their respective parts and or upload corporate level declarations for REACH. This process was
managed entirely on part of the firm’s compliance department. (This is relevant because Assent does offer on
demand and ongoing support services for some clients. These firms had no outside support from Assent beyond
the software set up and training)
TIMELINE:
For purposes of this case study we used a 1month sample from send out to analysis. It is also important to note
that Assent is unique in that, because of its strong footprint in the compliance space we help all our clients cross
reference their supplier contacts with our compliance contact database. This allows clients to access the most
up to date listing of compliance managers and key compliance personnel at 1000’s of companies. Response rates
differ dramatically based on the quality of contacts a firm has.
CONTROLS:
» Similar Company Size
» Similar Supply Chain Size
» Supply Chain Data Validation performed by
Assent
» 1 Month Time Period
» Identical System (Assent does offer customizations
for enterprise clients in some cases)
» Analyzing of 1-1 supplier response rates regardless
of parts supplied ( If a supplier has parts in every
product a firm uses one supplier could be
representative of a huge part of overall product
compliance. In this case, for analysis of
supplier response rates we treated all suppliers
equally)
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17. RESULTS
» Firm 1: 99% of suppliers responded within 1month time frame
» Firm 2: 74% of suppliers responded within 1 month time frame.
INTERPRETATION
It was surprising to see that very similar firms with various controls would see a 25% variance in supplier
response rates. Why was there a difference? After examining controls Assent dug a little deeper. Firm 2 used
the following copy when doing send outs from the system:
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Firm2
Dear Supplier,
Firm2 is requesting that all suppliers of firm 2 compete or submit EICC Conflict Mineral forms and
REACH declarations for the products that you supply to us. Using the wizard below please follow the steps
outlined and upload your documentation. If you need assistance feel free to contact our compliance
representative at email@firm2.com or call number
Thank you for your cooperation.
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Firm1
Greetings Valued Supplier,
As we’re sure you’ve probably heard, companies are now required under the Dodd Frank Act to procure
compliance information with regards to conflict minerals, and in order to sell our products into the EU we
must comply with the REACH regulation. If you put yourself in our compliance departments shoes you can
see that this is no small challenge. We’re asking that all our suppliers please use the Assent compliance
wizard to upload their compliance information because that will allow us to maintain our upstanding
relationship with your firm as one of our valued suppliers.
Here is background on both REACH and Conflict Minerals links that firm provided
If you need any help at all please contact Reps Fist Name and Last Name, Phone, Email
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18. From our analysis and controls it seems that it’s all in the copy. Firm 1, while maybe not even knowing it,
employed some very subtle copy writing tricks that might have had a 25% responses rate improvement to firm
2. Let’s examine:
» Firm 1 was more informal in the copy. While Assent hasn’t formally researched tone and formality in
response rates using the platform it does appear that the more informal tone was more effective with this
sample
» Firm 1 employed some subtle influence tactics. In a well-known study researchers found that when asking
for something using an (Can you do X because of Y) technique was much more effective than simply (Can you
do X). The word “because” seems to result in compliance with the request even if the reason mirrors the request
or simply states the obvious. “Can I use the copier because I need to make some copies” results in higher
compliance than “Can I use the copier”.
Langer, E., Blank, A., Chanowitz, B. (1978). The mindlessness of Ostensibly Thoughtful Action: The Role of
“Placebic” Information in Interpersonal Interaction. Journal of Personality and Social Psychology, 36(6),
635-642.
Firm 1 built in this influence trick into their copy as well as informed the reader.
» Finally firm 1 made the copy much more personal. They asked readers to put themselves in their shoes,
talked about maintaining their relationship and provided personal contact information. To the reader this copy
was much more compelling. Firm 1 and 2 actually had a supplier in common out of the 25% variance. We
reached out:
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Question Assent: Why was it that you responded to firm 1 but not to firm 2 when asked about compliance
info ?
Supplier: “It wasn’t my intent to not reply to firm 2. When I got the request I read it and kind of just forgot to
get around to it. When I read the message from firm 1 the line about maintaining our relationship really made
me feel that I needed to get right to it. The last thing I want is a PO getting pulled or a customer calling my
boss. I think that email just got me moving. I would have gotten around to firm 2 though.”
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19. FINAL THOUGHTS
---------------------------------------------
When crafting copy to send out to the supply chain perhaps run it by the marketing
department or give your Assent account manager a quick call to proof read it for you.
Strong copy can activate a sense of urgency with your suppliers so it’s a variable that
shouldn’t be overlooked. While the results of this case study don’t control for every
imaginable variable it appears on the surface that copy can provide as much as a 25%
swing in response rates. That means 25% less time and effort following up, potential
testing and delays in compliance. Try and exercise a bit of supplier mind control and
you might have some great progress in your compliance efforts.
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20. CITATIONS
1. Milgram, S., Bickman, L., and Berkowitz, L. (1969). Note on the drawing power of crowds of
different size. Journal of Personality Social Psychology, 13: 79– 82. Goldstein, Noah J.; Martin, Steve J.;
Robert B. Cialdini (2008-09-03).
2. Goldstein, N. J., Cialdini, R. B., and Griskevicius, V. (forthcoming). A room with a viewpoint: Using
social norms to motivate environmental conservation in hotels. Journal of Cosnumr Research. Goldstein,
Noah J.; Martin, Steve J.; Robert B. Cialdini (2008-09-03).
3. Gerber, A. S., and Rogers, T. (forthcoming). The effect of descriptive social norms on voter turnout:
The importance of accentuating the positive. The Journal of Politics. Goldstein, Noah J.; Martin, Steve J.;
Robert B. Cialdini (2008-09-03).
4. Schultz, P. W., Nolan, J. M., Cialdini, R. B., Goldstein, N. J., and Griskevicius, V. (2007). The constructive,
destructive, and reconstructive power of social norms. Psychological Science, 18: 429– 34. Goldstein,
Noah J.; Martin, Steve J.; Robert B. Cialdini (2008-09-03).
5. Iyengar, S. S., Huberman, G., and Jiang, W. (2004). How much choice is too much?: Contributions to
401( k) retirement plans. In Mitchell, O., and Utkus, S. (eds.), Pension Design and Structure: New Lessons
from Behavioral Finance (83– 96). Oxford University Press. Goldstein, Noah J.; Martin, Steve J.; Robert B.
Cialdini (2008-09-03).
6. Iyengar, S. S., and Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of
a good thing? Journal of Personality and Social Psychology, 79: 995– 1006. Goldstein, Noah J.; Martin,
Steve J.; Robert B. Cialdini (2008-09-03).
7. Schwartz, B. (2004). The Paradox of Choice. New York: Ecco.
8. Leventhal, H., Singer, R., and Jones, S. (1965). Effects of fear and specificity of recommendation
upon attitudes and behavior. Journal of Personality and Social Psychology, 2: 20– 29.
9. Garner, R. (2005). Post-It ® Note persuasion: a sticky influence. Journal of Consumer Psychology,
15: 230– 37.
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21. CITATIONS
10. Strohmetz, D. B., Rind, B., Fisher, R., and Lynn, M. (2002). Sweetening the till: the use of candy to
increase restaurant tipping. Journal of Applied Social Psychology, 32: 300– 309.
11. Goldstein, N. J., Cialdini, R. B., and Griskevicius, V. (2008). Maximizing motivation to cooperate
toward the fulfillment of a shared goal: Initiation is everything.
12. Freedman, J. L., and Fraser, S. C. (1966). Compliance without pressure: The foot-in-the-door
technique. Journal of Personality and Social Psychology, 4: 195– 203.
13. Tybout, A. M., and Yalch, R. F. (1980). The effect of experience: A matter of salience? Journal of
Consumer Research, 6: 406– 13.
14. Greenwald, A. G., Carnot, C. G., Beach, R., and Young, B. (1987). Increasing voting behavior by asking
people if they expect to vote. Journal of Applied Psychology, 72: 315– 18.
15. Cialdini, R. B., and Schroeder, D. A. (1976). Increasing compliance by legitimizing paltry
contributions: when even a penny helps. Journal of Personality and Social Psychology, 34: 599– 604.
16. Pfeffer, J., Fong, C. T., Cialdini, R. B., and Portnoy, R. R. (2006). Overcoming the self-promotion
dilemma: Interpersonal attraction and extra help as a consequence of who sings one’s praises. Personality
and Social Psychology Bulletin, 32: 1362– 74.
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