Why Is Storytelling Important in Business? 3 Reasons

This article is an excerpt from the Shortform book guide to "Stories That Stick" by Kindra Hall. Shortform has the world's best summaries and analyses of books you should be reading.

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Why is storytelling important in business? How do stories allow you to build connections?

Stories have a massive role to play in business. They can convince customers to buy your product because of the connection you’ve built with them, and there’s even scientific proof that they increase empathy in listeners.

Let’s dive into the importance of stories in a business setting, according to Kindra Hall’s book Stories That Stick.

The Role of Stories in Business

Why is storytelling important in business? In the simplest terms, the purpose of any business is to provide people with something of value. But this isn’t as easy as it sounds, and businesses are always running into challenges in fulfilling that purpose. Hall argues that these challenges are actually disconnections, or gaps, where businesses fail to effectively engage their intended audience, whether that be customers, employees, or investors. For example, anytime a startup is struggling to find investors or a product isn’t selling, there’s a disconnection between the company and the intended audience. Hall argues that stories are the tool you need to build the connections that enable your business to fulfill its purpose

(Shortform note: The idea of storytelling as a marketing tool isn’t new. Storytelling has been a part of marketing for centuries, but it was not until the late 20th century that it began to gain prominence as a marketing strategy. Seth Godin, author of All Marketers Are Liars, is often credited with popularizing story-based marketing. In the 2005 book, Godin argues that the most successful marketers are those who tell the most compelling stories that resonate with their target audience. This idea has since become widely accepted in the marketing industry, with many businesses and marketers using storytelling techniques to create more engaging and effective marketing messages.)

Storytelling allows you to build connections for three reasons: 

1. Storytelling invites engagement because it’s a collaborative process. As you tell a story, the listener mentally fills in the gaps. They add images, feelings, and context to the details you provide. Instead of being lectured to, the listener is a participant in the storytelling.

(Shortform note: Scientists believe that mirror neurons are responsible for the collaborative nature of storytelling. Mirror neurons are brain cells that allow us to relate to other people’s experiences by mirroring their actions, emotions, and sensations in our own brains. These neurons are activated when we listen to a story, allowing us to imagine the story as if we were experiencing it ourselves and to understand and empathize with the intentions and emotions of the storyteller.)

2. Storytelling can inspire people to take action because stories are persuasive. Stories can shift perspectives and attitudes without people even realizing it, causing people to take action they wouldn’t have considered before hearing the story.

(Shortform note: Research has shown that people are often more persuaded by stories than by facts, largely because stories require less processing fluency, meaning it’s easier for us to process new information when it comes in the form of a narrative.)  

3. Storytelling has the power to produce lasting change. Virtuous stories, or noble stories, that are about something bigger than the story itself, are the stories that transform people.

(Shortform note: In his book Redirect, social psychologist Timothy D. Wilson suggests that “story editing,” or changing the stories we tell about ourselves, is fundamental to long-lasting behavior change. Wilson argues that we all construct stories about ourselves that determine our thinking and behavior. Reframing these stories or creating new stories has the power to alter mindsets and affect our behavior and decision-making.)

Why Storytelling Works

There’s a reason people respond strongly to stories—stories change our brain chemistry. To make this point, Hall cites the work of Paul Zak, a neuroscience researcher and neuroeconomist who has focused on the neurochemical effects of storytelling on the brain, particularly the role of the hormone oxytocin in enhancing social bonding and trust. Through various experiments, Zak found that a well-crafted narrative stimulates the production of oxytocin in the brain, leading to increased empathy and a stronger emotional connection between the storyteller and listener. He explains that stories make the audience feel more connected and invested in the storyteller, which is why Hall argues storytelling is such an effective marketing tool.

(Shortform note: Not everyone agrees with the research Hall cites on oxytocin. Science writer Ed Yong (I Contain Multitudes) once characterized the hype around oxytocin as “dumb and dangerous,” explaining that this hormone has been erroneously linked to trust, cooperation, love, empathy, morality, and more. Yong argues that the evidence isn’t always there, and how oxytocin actually affects the brain is probably a lot messier than the headlines indicate. When thinking about neuroscience, it’s also useful to keep in mind that most studies are very small. This means that many findings are statistically inconclusive. Conclusions that seem correct in a small sample size could be disproven in a study with a larger sample.)

Why Is Storytelling Important in Business? 3 Reasons

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Here's what you'll find in our full Stories That Stick summary:

  • Why stories are probably the answer to most of your business problems
  • How to harness the power of storytelling to connect with your audience
  • How to integrate storytelling into your marketing strategy

Katie Doll

Somehow, Katie was able to pull off her childhood dream of creating a career around books after graduating with a degree in English and a concentration in Creative Writing. Her preferred genre of books has changed drastically over the years, from fantasy/dystopian young-adult to moving novels and non-fiction books on the human experience. Katie especially enjoys reading and writing about all things television, good and bad.

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