Social Norms
5 growth ideas playing on the concept of social norms.
When I was running Wine List, our office was above the warehouse where we ran fulfilment. While we hired a warehouse team, there were periods, especially in the early days, when we would all help out.
On one of those occasions, a late delivery meant we were all behind. So, I text my friends group WhatsApp and asked if anyone was free to come and help out.
Within the hour, two friends had arrived on bikes and got stuck in. There was never any talk of payment. Our payment for warehouse staff was London Living Wage, and both of my friends in their day jobs were earning many brackets above that.
They got stuck in, we all stayed late to get everything finished, and then I opened a bottle of sparkling wine as a thankyou at the end to celebrate.
The reason they were so happy to do so, wasn't in spite of no talk of payment, but because of it. The understanding to all of this lies in the idea of social vs market norms.
Social norms are the codes which we all live by to make for a harmonious society. Market norms are those that govern how we think about economic factors. Even the most rational amongst us, are bound by social norms.
It's one of the themes that sticks out most to me in Dan Ariely's book Predictably Irrational1. In that he reveals that by merely mentioning prices, it encourages people to lean into market norms behaviour.
Thinking back to my earlier example, if I'd offered my friends £10/hour to help out, they would have been less likely to do so. The social norm of helping out a friend would have decreased because of the mention of price, thus turning it into a market conversation.
While you can always lean into social norms as a tool, I find it particularly useful in the super early days of startups. Before it becomes thought of as Big Business (and therefore market norms-focused). Here are a few ideas to lean into.
5 experiments to run using social norms
1. Founder-invited, free customer interview
The bigger a company gets, the more you associate it as being a 'Business' and the more of a 'Business' it is, the more you will think of market norms.
Think of this: if Amazon asked you for customer feedback, you'd be far less inclined to give it to them for free, than if your local coffee shop did.
When you're early-stage, you are in the unique position where you can use this learn from customers for free.
At Wine List, I emailed the first 500 customers myself – not from a marketing tool – with an email that read "I'm the founder of Wine List. We launched this year, and this can only succeed if we're building the right thing for you. If you had 30 minutes you could spare for a conversation, it would help a lot." Response rate decreased the bigger we got.
2. Public commitment challenges
We want to appear good in front of other people. It's one social norm we're all governed by. The Ice Bucket Challenge was a great example of how public commitment plays in out in reality.
While not something you can use with all startups, if you're in the purpose-driven space, there's a good chance you get your community to commit to ideas publicly.
3. A no-offer referral request
As soon as you offer a "£10 off" or "50% off" for a friend in a referral scheme, or alternatively offering a 'give £10/get £10' we enter the land of market norms.
Airbnb once tested the idea of giving the entire credit to the friend, and nothing for the referrer. It outperformed the go-to give/get.
Early days, you can get very far by just asking people to tell their friends. Incentivising when you are a super early stage business can actually harm your word of mouth.
4. Pay-What-You-Want day
Due to social norms and expectations, offering people the opportunity to pay what you want, can lead to an increase in what they pay.
There's other psychological things that are important to consider in this one, like price anchoring, and again, the size of your business. People will be more likely to try to get a bargain or cheat you, if they think of you as a Big Business.
But in those early days, use these sparingly and with limits and you will likely create a lot of good will and find it profitable for you in the short term.
5. The unexpected free upgrade
If you've ever manned a customer service tool before, you will know that many default to anger. Understanding why this is the default is complex.
Regardless of why it happens, there's great experiments to be run in how you can deal with it. The unexpected freebie is one of my favourites, but there's many others too. But at the core, being kind and generous encourages that in response. And will likely create positive word-of-mouth for you afterwards.
Bitesize of the week
I’ve just started reading Marc Collins’ To The Culture, which so far is a really good read.
It’s reminded me of how we think about Creator-Driven content. The way these platforms are used is a big part of the culture. And we can either try to play with that, or play against it. Our bet is that those who play with it will continue to succeed, and those that play against will lose ground.
Predictably Irrational. Dan Ariely.