In college, my friend Jesse and I often discussed the “night guy vs. morning guy” phenomenon. Night guy would say, “I can totally get by on four hours of sleep – let’s stay up.” Morning guy would curse night guy as he rushed to class late and tired.
A HBS Working Knowledge article documents and codifies this type of behavior and provides a link to the PDF of a working paper by Todd Rogers and Max Bazerman. Here’s a brief overview from the executive summary:
Rogers and Bazerman show through four experiments that people are more likely to choose what they believe they should choose when the choice will be implemented in the future rather than in the present, a tendency they call “future lock-in.” They also discuss directions for future research and applications for public policy, an arena in which citizens are often asked to consider binding policies that trade short-term interests for long-term benefits. Key concepts include:
- Tension occurs between an individual’s immediate self-interest and the interests of all others, including his or her own “future self.” Individuals tend to think that their future selves will behave more virtuously than their present selves.
- Four studies demonstrated the future lock-in effect, which describes a person’s increased willingness to choose and support a binding “should-choice” when it is to be implemented in the future rather than in the present.
- Policymakers could leverage the benefits of future lock-in by advocating for reforms that would be decided upon in the present, but go into effect in the future. Future lock-in would encourage citizens to more heavily weight a policy’s abstract merits rather than its concrete costs.
The working paper presents several studies, including one on donation. They find that “the future lock-in effect… suggests changing the structure of the donation such that the prospective donor can commit now to donate in the future.”
This work obviously has implications for development professionals in nonprofits, and also brought to mind another HBS Working Knowledge article from July 2007 (thanks, Gmail, for making email archiving and search so simple!) which was, in fact, also co-authored by Rogers and Bazerman with Katy Milkman. It also chronicles the “want” vs. “should” cognitive dissonance, and study it in terms of grocery shopping and DVD rentals. You can read that article, an interview with Rogers and Milkman, here.
Yeah, it took an HBS professor to figure this one out. Authenticity is important in new media marketing. This recent article from HBS Working Knowledge looks at the research of professor John Deighton. After a review of the Dove “real beauty” campaign, we get this meaty tidbit:
The new rules
But what does this all boil down to for companies that want to be successful in this relatively new environment? In the working paper, Deighton and Kornfeld discuss 5 aspects of digital interactivity, including
- Thought tracing. Firms infer states of mind from the content of a Web search and serve up relevant advertising; a market born of search terms develops.
- Ubiquitous connectivity. As people become increasingly “plugged in” through cell phones and other devices, marketing opportunities become more frequent as well—and technology develops to protect users from unwanted intrusions. A market in access and identity results.
- Property exchanges. As with Napster, Craigslist, and eBay, people participate in the anonymous exchange of goods and services. Firms compete with these exchanges, and a market in service, reputation, and reliability develops.
- Social exchanges. People build identities in virtual communities like Korea’s Cyworld (90 percent of Koreans in their 20s are members). Firms may then sponsor or co-opt communities. A market in community develops that competes on functionality and status.
- Cultural exchanges. While advertising has always been part of popular culture, technology has increased the rate of exchange and competition for buzz. In addition to Dove’s campaign, Deighton cites BMW’s initiative to hire Hollywood directors and actors to create short, Web-only films featuring BMWs. In the summer of 2001, the company recorded 9 million downloads.
These 5 aspects show increasing levels of effective engagement in creating social meaning and identity, Deighton suggests, noting that the first 2 (thought tracing and ubiquitous connectivity) change the rules of marketing but don’t alter the traditional paradigm of predator and prey. In the last 3 (property, social, and cultural exchanges), the marketer has to become someone who is invited into the exchange or is even pursued (as in the case of the BMW films) as an entity possessing cultural capital.
Catching up on some of my HBS Working Knowledge newsletter reading, I found an interesting Q&A with Professor Gail McGovern. She discusses some of the major changes in marketing strategy in the past decade, particularly CRM. Particularly salient is this point:
“Indeed, popular metrics such as customer satisfaction, acquisition, and retention have turned out to be very poor indicators of customers’ true perceptions or the success of marketing activities. Often, they’re downright misleading. High overall customer satisfaction scores, for example, often mask narrow but important pain points—areas of major dissatisfaction—such as unhappiness with poor customer service or long wait times.”
She then goes on to promote the executive dashboard – a concept that seems to be all the rage lately. When our team evaluated software vendors at the Museum, the inclusion of a comprehensive yet user-friendly dashboard giving an overview of the Museum’s current business position was a key component. Of course, as with any data-driven tool, a dashboard is only as good as the data included (i.e. the old programming mantra, “garbage in, garbage out.”). Knowing which measures are important as actual business drivers and which measures are merely distractions is obviously the key. The best way to figure this out seems to be the key lesson that was hammered into my team as we defeated the competition in our Marketing Strategy simulation in business school: listen to your customers.