Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely
Today was #NudgeStock2021 – a full festival of behavioral science (you can check out the recordings on youtube) – and we heard from Dan Ariely about behavioral science so it seems timely to make this week’s post a book brief on Predictably Irrational by Dan Ariely. The book is a must read in behavioral science, full of research based insight into how we make decisions and the influences on our behavior. In this book brief, I share some highlights from the book and my thoughts on how they apply to SaaS and Customer Success:
My Key Takeaways from this book:
Decoy effect
Where there are A,A and B choices – people pick A because it is easily comparable with the other A, whereas B is not easily comparable
Social Norms vs Market Norms
When you move from social norms to market norms it is very hard to move back – i.e. you help someone because you want to help; if they offer to pay you and you take the money you are now in market norms and you will expect payment next time
Participants work harder under social norms than under market norms –
Companies try for the benefit of a social norms relationship (ie family) but then revert to market norms when it suits them but you can’t have it both ways
Pair something you love with something you have to do to overcome resistance; for example pair a household task you don’t like with something you do like, like listening to your favourite playlist while cleaning
People will actively try to avoid a loss at the expense of gains – Dan cites numerous experiments that show this
People waste time and energy keeping options open when they lose opportunity for gains by doing so; and they do this as they fear the loss of the opportunity more than they value the gain they would get by letting the opportunity go
“We need to drop out of commitments that are a waste of our time.” says Ariely
My ideas on how the concepts raised in this book apply to SaaS:
How many possible gains are you giving up by saying yes to everything? Focus your business Are you keeping options open at the expense of gains?
Are you attempting to use social norms to attract employees and then switching to market norms when it’s convenient? Consider avoiding to the work organization as a family and call it a team instead
My ideas on how the concepts from this book apply to Customer Success:
Are you keeping too many options open in your career and giving up possible gains?
Think about social norms and market norms – when is one in play vs the other? Are you being overly helpful to clients because of social norms when market norms apply more?
For women in customer success, thinking of social norms vs market norms can be especially helpful, especially if you’re finding it hard to say no to work asks – like particularly emotional labour and invisible labour
Women at work are in this bind – they are expected to follow social norms even in the work context when men are more likely to be accepted as following market norms
Social norms and market norms come up in recruitment as well – for example pay transparency – hiding salaries during recruitment tries to keep a social norm context in what is obviously a market norm environment; women are even more penalized for moving to a market norm (discussing salary) than men are or may be more hesitant to move the conversation to market norms due to their socialization
For me, the differentiation between social norms and market norms, thinking about when we use which set of norms, is extremely helpful. There is much more in Predictably Irrational, it’s a great read so I highly recommend diving into the full book!
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