In his excellent book, Predictably Irrational, author Dan Ariely writes about how people interact in two different ways, socially and commercially. Social exchanges are freely given, without an expectation of repayment—helping a neighbor move a sofa, helping a coworker jump start a dead battery, or opening a door for someone. These are the every day kindnesses that make life civil. On the other hand, Market exchanges depend on money changing hands in return for a product or service—commerce.
Trouble sets in when these behavioral norms collide, introducing market conditions into a social situation. Placing an economic price on a social exchange affects how each party behaves, often negatively. Ariely uses the example of a man offering a few hundred dollars to “even up” on his mother-in-law’s love. It simply isn’t possible, so the idea is almost offensive. He also offers the example of a day care center that introduced fees for picking up a child late, hoping to discourage this behavior, only to see late pick-ups increase. Ariely writes:
“So we live in two worlds: one characterized by social exchanges and the other characterized by market exchanges. And we apply different norms to these two kinds of relationships. Moreover, introducing market norms into social exchanges… violates the social norms and hurts the relationships. Once this type of mistake has been committed, recovering a social relationship is difficult.”
Consumers aren’t the only ones that make this mistake. Brands do it too.
Think of a brand with a market position that says, “We’re your friend” or “We’re on your side.” A few examples that come to mind:
Like a good neighbor, State Farm is there.
Zion’s Bank. We haven’t forgotten who keeps us in business.
Verizon. We never stop working for you.
This is great brand positioning: brand as friend, helper, or care giver.
Until the brand introduces a market exchange into the story.
If Zion’s Bank charges a overdraft fee, or eliminates free checking for students because it isn’t profitable, the market exchange collides with the social norm and consumers question whether they really do remember who keeps them in business.
If State Farm cancels a 20-year-old policy because the home owner makes her first claim, or refuses to pay a claim that the customer feels entitles to, the consumer might feel that State Farm wasn’t there.
If Verizon’s network drops calls or customer service is less than helpful, the niceties of the social exchange run headlong into the market exchange reality.
The result? The positive social norm goes away. As Ariely writes, “Once the bloom is off the rose—once a social norm is trumped by a market norm—it will rarely return.” Then your brand story is worthless.
If your brand depends a market position characterized by social exchanges, it is important to manage the brand experience to ensure market exchanges don’t interfere and destroy the social relationship.