THE DREAM IN ACTION

via flickr

While reading ‘Predictably Irrational‘, a phenomenal book by Dan Ariely, well known TED speaker, I began thinking about his discussion of Social Norms and Market Norms. I’ve re-termed them for the sake of this post to be a bit more descriptive as Social and Market Behavior Codes. I’ll first start with my own definitions of both (these are my interpretations, not from the book) the Social and Market Norms as they relate to human behavior.

Definitions

Social Behavior Code - exchanges made between two individuals/entities on a social level. These exchanges are not always equal and do not need to be balanced by more than ones interest to make the other person happy/satisfied (ie. Emotion).

Market Behavior Code – exchanges made between two individuals/entities on a market level. These exchanges must always be equal and need to be balanced by a tangible good or intangible good of tangible value (ie. Currency).

A classic example of this (used in ‘Predictably Irrational‘) is when you go to your mother-in-law’s house for Thanksgiving. If you were to stand up at the end of the meal and instead of making a toast, you say, “that was a great meal, how much do I owe you?” and then plop down $100 dollars, you’re behavior would be ridiculous. Everyone knows (on a socially normal level) that you’re not expected to pay the host of a Thanksgiving dinner. Your say thank you, maybe exchange a gift, like a bottle of wine, or bring a portion of the meal to contribute (candied yams in my fathers case). But, an exchange of money is completely inappropriate.

Similarly, if you went into an In-N-Out Burger (I love In-N-Out) and offered the gal at the counter a bottle of wine and my father’s candied yams as a contribution to your meal in exchange for a Double Double Cheeseburger and a large chocolate milkshake you’d surely be asked to leave. It would be inconsistent with the expected Market Behavior to go into a store and make a barter for product this way.

So, how do we know when it is appropriate to apply the Social Behavior Code and when is more appropriate to apply the Market Behavior Code? In the past, it’s been fairly simple to identify and employ the correct behavior. Now, it’s not nearly as simple. As markets change and communication platforms develop that blur the lines between Social and Market, choosing the correct behavior has become extremely difficult.

Here’s a rule of thumb…

You Can’t Mix Social and Market Behaviors

To make the point of why mixing these behaviors is usually a bad idea, I’m going to use 2 examples: One extreme and one a bit more applicable to your life…I hope.

Sex – Mixing generally accepted Social & Market behaviors in regards to sex can get very messy.

Example 1: You meet a cute girl at a bar and offer to buy her a drink. (social norm) Then a few days later you call her and ask to take her out to dinner. You pay for the dinner. (social norm) This process repeats for a few dates. You’re even lucky enough on the 3rd date to get a kiss as you drop her off for the evening. (social norm) You’ve exchanged time and emotion for physical affirmation that she has similar emotions. (social norm) On the 4th date you take her out for a walk in the park and offer her $200 bucks to sleep with you. This seems normal because you’re just offering a different form of payment for something that you hope to receive in return (market norm, not social norm) She slaps you, calls you a creepy bastard, and you never hear from her again.

Example 2: You hire a prostitute off the street, offering $500 for 5 hours of ‘her time’. She obliges and in return for your $500 you’ve received sex. (market norm) This process can safely continue for as long as the market conditions don’t change (supply/demand). Then after 2 consistent weeks of repeating this interaction you meet with the prostitute again, after you pay her for ‘her time’, you say, “I love you want want to spend the rest of my life with you. Will you marry me?” (social norm, not market norm) Your relationship with this woman has always operated under Market Behaviors, not Social Behaviors so this socially normal question is inappropriate and will likely be turned down.

Without an understanding that you can’t mix Social & Market behaviors the offer of $200 for sex to the girl you’re dating, and the marriage proposal to a prostitute, seem normal. However, we know that neither would really fly. You have to be able to filter and apply your knowledge of Social & Market Behavioral Codes or you’re in serious trouble. There is a reason that happily married couples don’t pay each other for sex and prostitutes don’t make the best of wives.

Next example, one you might be more familiar with…

Social Media – Mixing generally accepted Social & Market behaviors in regards to social media can get ‘almost’ as messy.

Example: When Tony Hsieh, the CEO of Zappos tweets funny pictures of himself or his company he’s making you believe that Zappos is a personal brand. They are your friend. He has been praised over and over for creating an amazing environment at Zappos where employees take incredible pride in how well they treat the customer both online, on the phone, and via their policies (shipping, billing, quality). By letting Tony or any of the Zappos employees into your Twitter stream or Facebook newsfeed, you’re accepting a Social interaction and they are developing a relationship based on the Social Behavior Code. They keep you posted with what they are doing and thinking and that makes your feel good or entertained. This is an out of balance exchange but under the Social Behavior Code it will fly.

If you were to get a tweet from Tony or another Zappos employee saying that you didn’t pay the tax on your last order and you needed to send $X that would break the Social Code. Similarly, if you started getting updates like, “Uggs on sales for $79.99 Today Only!” from Zappos employees you’d be pissed. They broke the code. Fortunately for them, they understand the Code and do not break your trust.

Application of Behavior Codes, Choosing Your Strategy

Now that you understand the difference between the Behavior Codes it is critical that you are able to apply what you know. It is also important that you do not mix them and if you do you should understand the effect it will have on your target.

First, I’ll be clear on one point. Your strategy depends on who you (or your company) are. I also want to be clear that both are OK. Operating your social media strategy under the Market Behavior Code is totally fine as long as your target expects it.

Benefits of Keeping a Market Behavior Code

Consistent – Market Behavior can always be justified. “Sorry, it’s just business”, can always be your get out of jail free card and although it may seem cold at first people do understand it. For example, Woot.com’s Twitter account has likely never said anything personal at all. They just tweet their latest deals. They have decided, instead of being on the Twittering CEO list, they would use the platform to quickly communicate the latest and greatest value that they provide, awesome deals. You accept tweets, they provide you with deals, an equal exchange.

Automated – Again going back to the Woot.com Twitter account, this is easy to automatize. My guess is that this took about 10 minutes to setup and has never been touched or adjusted again. You can push any kind of update you want to Twitter and Facebook using third party tools so that update is quick and effortless.

Resourceful – This method is very cost effective and economical. Your user knows exactly what to expect from this type of interaction. Interactions based on Market Behavior Codes do not have to be debated for discussed. Party A states what they want and what they will pay. Party B fulfills the request in exchange for payment. Sure there is plenty of discourse to define those terms, but once their is an agreement there is not much room for debate.

Benefits of Keeping a Social Behavior Code

Friendly – There may not be the same simplicity with the Social Behavior Code that exists within the Market Code but it sure seems nicer. Within the Social Behavior Code, interactions are much more grey, more foggy, and less defined. People don’t always know what to expect and the rules are not as clearly defined. That’s why it is scary for companies much of the time. The rules are not written so they don’t even know how to avoid screwing up! However, the goodwill you gain from this approach can cover the cost of that screw up.

Challenge: Companies are not inherently friendly. They are run by numbers not by emotion, and if costs get high, people get laid off…that’s just how it is. Well not under the Social Behavior Code. That employee gave you so much of their life, their focus, and their trust, you the company must find a way to make this work for both of employee and employer, you have an emotionally charged Social responsibility.

Trustworthy – The fact of the matter is, the customer won’t judge you the same if you operate within the Social Behavior Code. Under Market norms, if your company was going under, you were not going to have any customers throwing in the life raft for you. The Market norms are a harsh reality, but remember the Social Norms are friendly. If Zappos was having a tough time selling checkered Vans for example (which they wouldn’t because checkeredVans are sweet), my guess is that Tony could tweet, “we really need help getting these checkered Vans off of our shelves”, and that would cause an increase in checkered Vans sales strictly out of support for Tony and Zappos. I don’t think he would ever tweet that, but he could, and it’s all because of the trust he’s built up by following a Social Behavior Code vs. a Market Code.

Fulfilling – To use another example from Dan Ariely’s book: A few years back the AARP asked a subset if a group of lawyers would work to support the organization for minimal fees, say $30/hr. The overwhelming response was no, they would not work for such a small amount. This result was cause by the fact that these lawyers were being asked to work on Market Codes. Then, a year or so later the same group of lawyers was asked by the AARP if they would work for the organization for free, no pay, or pro-bono. Now, the overwhelming response was yes, they would be happy to support the organization. Now they were being asked to help following a Social Behavior Code. Another benefit of the Social Behavior Codes is, although not equal, the interaction will be fulfilling for both parties.

Summary

The biggest learning that a company or individual can take away from this post is be consistent with your approach to people. Be very careful not to mix Social and Market Behaviors for fear of pissing of a friend (or girlfriend) and/or losing a customers loyalty.