Predictably Irrational: Social Norms vs. Market Norms - The Blytheco Blog
Predictably Irrational: Social Norms vs. Market Norms

Predictably Irrational: Social Norms vs. Market Norms


Yesterday I talked about Dan Ariely’s book Predictably Irrational and discussed the hidden messages many companies send us in order to sway our decisions. Mr Ariely also discusses intricacies involving social norms vs. market norms. The most vivid way to define social norms and market norms is to paraphrase Dan Ariely’s story:

Let’s say you are at your mother-in-law’s home for Thanksgiving. The meal looks amazing – all your favorite dishes are presented beautifully on her table. The relatives are all getting along well – even your kids seem happy momentarily. As the afternoon winds on, the meal is eaten and digested, and everyone is feeling festive and content. You pull out your wallet and dig around, saying “Mom, this has been a great dinner. Will $300 cover it?”

Ouch. You’ve stepped on a serious social norm. By generously offering $300 for a favor that is done out of tradition or generosity you’ve gone ahead and introduced a market norm, or the concept of monetary compensation for services rendered.

This delicate balance is apparent in the business world. When companies create marketing and messaging that relates to social norms (i.e., “we are your partner, we can help you” or “we are here when you need us”), they are sending out a positive and reassuring signal to their customers. But they often want to have it both ways, implementing market norms and treating customers impersonally when it’s convenient. Your “partner” wouldn’t violate the social exchange by calling and rudely demanding immediate payment for an invoice. This may create confusion and resentment from customers, who might prefer to be treated consistently.

How do you handle this dichotomy in your business? Or do you? Do you recognize it exists?

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