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carol. 's Reviews > Predictably Irrational: The Hidden Forces That Shape Our Decisions
Predictably Irrational: The Hidden Forces That Shape Our Decisions
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Yet another book I'm recommending to Goodreads staff. I will write up a long review when it's done, but I think this is worth chewing on:
According to the author of Predictably Irrational, we live simultaneous in the world of social norms and the world of market norms. Social norms are the exchanges and requests we make as part of personal connections. Market norms are the dollar-defined exchanges of dollars, wages, rents, prices. Here's where it gets interesting:
"In the lasts few decades, companies have tried to market themselves as social companions--that is, they'd like us to think that they and we are family, or at least are friends that live on the same cul-de-sac. "Like a good neighbor, State Farm is there" is one familiar slogan...
Whoever started the movement to treat customers socially had a great idea. If customers and a company are family, then the company gets several benefits. Loyalty is paramount. Minor infractions--screwing up your bill and even imposing a modest hike in your insurance rates--are accommodated. Relationships of course have ups and downs, but overall they're a pretty good thing.
But here's what I find strange: although companies have poured billions of dollars into marketing and advertising to create social relationships--or at least an impression of social relationships--they don't seem to understand the nature of the social relationship, and in particular, it's risks.
For example, what happens when a customer's check bounces? If the relationship is based on market norms, the bank charges a fee and the customer shakes it off. Business is business... In a social relationship, however, a hefty late fee--rather than a friendly call from the manager or an automatic fee waver--is not only a relationship-killer; it's a stab in the back. Consumers will take personal offense. They'll leave the bank angry and spend hours complaining to their friends about this awful bank. After all, this was a relationship framed as a social exchange."
No parallels to Goodreads here. Say you have a site that framed itself in social terms. Then when you start applying business decisions to the social sphere, you get surprised that those docile consumers who devoted hours and years to database building (for social rewards) get pissed off and leave to a new site. No parallels at all.
Full review and analysis at:
http://clsiewert.wordpress.com/2013/1...
According to the author of Predictably Irrational, we live simultaneous in the world of social norms and the world of market norms. Social norms are the exchanges and requests we make as part of personal connections. Market norms are the dollar-defined exchanges of dollars, wages, rents, prices. Here's where it gets interesting:
"In the lasts few decades, companies have tried to market themselves as social companions--that is, they'd like us to think that they and we are family, or at least are friends that live on the same cul-de-sac. "Like a good neighbor, State Farm is there" is one familiar slogan...
Whoever started the movement to treat customers socially had a great idea. If customers and a company are family, then the company gets several benefits. Loyalty is paramount. Minor infractions--screwing up your bill and even imposing a modest hike in your insurance rates--are accommodated. Relationships of course have ups and downs, but overall they're a pretty good thing.
But here's what I find strange: although companies have poured billions of dollars into marketing and advertising to create social relationships--or at least an impression of social relationships--they don't seem to understand the nature of the social relationship, and in particular, it's risks.
For example, what happens when a customer's check bounces? If the relationship is based on market norms, the bank charges a fee and the customer shakes it off. Business is business... In a social relationship, however, a hefty late fee--rather than a friendly call from the manager or an automatic fee waver--is not only a relationship-killer; it's a stab in the back. Consumers will take personal offense. They'll leave the bank angry and spend hours complaining to their friends about this awful bank. After all, this was a relationship framed as a social exchange."
No parallels to Goodreads here. Say you have a site that framed itself in social terms. Then when you start applying business decisions to the social sphere, you get surprised that those docile consumers who devoted hours and years to database building (for social rewards) get pissed off and leave to a new site. No parallels at all.
Full review and analysis at:
http://clsiewert.wordpress.com/2013/1...
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Reading Progress
November 5, 2013
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Started Reading
November 5, 2013
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December 20, 2013
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Julio
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Nov 05, 2013 10:20PM
heh. too right.
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What a novel idea! Who would have thought that after being told the business wants a social relationship with the consumer, the consumer would expect some reciprocity. What a difficult idea to grasp!
Right, S.? Classic misunderstanding, and then misunderstanding the power of social media to enlarge the issue beyond the original 21 deletions.
After all, why would these people talk to each other on a social media site? I mean, who knew that they would use the site for that purpose. Clearly they're all here to discover new books to spend money on at website(s) where they are readily available. Why else would bookworms seek out a site full of other bookworms?
I am not sure why this is a 2 star review. You seem to have 'got it' and to agree with the basic hypothesis. What is obvious to me is that the business as a personal friend was always intended to be a one way,marketing ploy. Reciprocity is a business model, not a necessary component. Microsoft had no prior history of social conscious until Bill Gatges: 1Married a woman for whom this was important and
2. He was facing unwanted and unfriendly scrutiny from Congress and Federal Regulators.
As for the customer who feels betrayed by their corporate friend- if your customer base is large enough, there is a kind of mass based inertia that makes such losses acceptable.
For every customer a company looses because that customer decides that a company policy is insufficiently customer friendly, there is a customer from the competitors who comes in having a fit of pique at that other company's policies.
Oddly there are tons of on line posters who will laugh at both the leaving and arriving customer because in both cases there are huge numbers who will always take the case of the business, esp if they can argue that businesses must have what ever policies are given as the the cause of the 'defections'.
Ever notice that the main goal of customer service is to insure that no customer ever talks to anyone with real decision making power? If you are lucky, CS can offer you a refund, sometimes even an extra, like a coupon good for more loyalty to the complained against company. But if the policy itself needs review? Good luck getting that message to anyone who can make that happen.
