“All economics is Psychology” says Chris Anderson in his book Free the future of a radical price.
I would go further and say pretty much everything comes down to psychology.
It is so basic it should be taught in schools.
The way we feel when we act is key to everything from making a purchase, learning a skill, disciplining our children or getting on with our partners. It is incredibly powerful and can even dominate things we know to be absolute.
Take for example 2+2. We know that this equals 4 and always will do. But as children we may repeat the sum over and over again on our fingers because we have not yet developed the confidence that it will always be the same.
When you are confident of an outcome you can comfortably take things to the next level. Once I am confident that I won’t drown in the swimming pool I am able to learn the techniques I need to swim with a stylish stroke.
Once I am confident that the Italian café provides me with superb coffee everyday I might try it out for lunch.
As a swimming teacher or café owner, knowing how my customer feels can help me enormously in providing them with the skills and services they want. I need to use basic psychology to judge when they are ready to go to the next level with me and then lead them there. Can you see how this might help in other areas of your life ?
It’s not just in confidence-building that psychology plays such an important role, although I challenge you to think of any job that does not involve the transfer of confidence from you to the client.
Take the psychology of price. Charge too much and your client feels ripped off. Charge too little and your client thinks you’re no good.
What about the amazing effects of just being heard ?
Life coaches, hypnotists even doctors perform a common basic function; listening to their patients. Some damaged individuals who get little attention in life,become addicted to hospital visits because people hear them and pay them attention. Children in small classes flourish because, for once, they can be heard.
Popular psychology was once a big deal in the business world and has fallen somewhat out of favour. Now we hear a lot about Trust and Community and building Relationships. But at bottom, they are all versions of the same thing; building confidence and the desire to be heard.