Driving around city blocks, you finally find a parking spot, parallel-park, jump out of the car, dig into your pockets, and realize you’re out of quarters to feed the meter—in fact, you only need a single quarter. So you ask a passerby for a quarter, and he offers to sell you a quarter for a dollar.
“How many of you would pay?” asks Dan Ariely, professor of psychology and behavioral economics at Duke University, to marketers at Advocamp in San Francisco this month. “Most people would say, ‘I’m not paying a dollar for a quarter.’”
What if the passerby instead offered to run five blocks down the street to a bank, exchange your dollar for quarters, come back and give you the quarters, and all he asks for his efforts is a dollar in return?
Ariely says most people would gladly pay a dollar for this service. Yet, in every way, it’s worse than simply paying a dollar for a quarter. For instance, you have to wait for the person to run to the bank and back. You now have to carry around three quarters in your pocket. And you’re still out a dollar. (In the first deal, you’re actually out $.75, not a dollar.)
But it’s this idea of someone working hard on your behalf that makes the second deal more appealing. Ariely has run many such behavioral tests that lead to insights on how companies might engage customers in the five second window.
Show your hard work
Consider the difference between Google and mobile travel app Kayak, Ariely says. Type in words and phrases into the Google search bar, and you’ll get immediate results. It’s something we all take for granted, because we don’t see the effort.
Kayak, on the other hand, shows users that it’s working to come up with results. For a few seconds, a processing bar lets users know that the search engine is going through the databases of airlines and hotels. Things are happening, and users intuitively understand that they could not do this on their own.
“People don’t like to wait, but they appreciate the service at a higher level,” Ariely says. “Basically, the idea is that people care about fairness. If we give people something and say, ‘We worked really hard for this,’ all of a sudden people feel more connected to it.”
Related: How to Court a Customer
Another behavioral test from Ariely concerns trust and revenge, which can have major implications in customer engagement efforts. The test starts with two strangers—person A and person B—in separate rooms. They never see each other. Person A is handed $100 and given two options: go home with $100, or send the money to person B.
In the latter option, the money quadruples to $400. Now person B is given two options: go home with $400, or send back half the money to person A. Imagine you’re person A who faces a dilemma of trust. Will person B be worthy of your trust and send back half the money? Or go home with all of it?
“Economic theory suggests random people won’t give back the money,” Ariely says. “Given that, people should not send the money. But what do we actually see happening? People show a tremendous amount of trust. Is it justified? Yes, people most often reciprocate the trust.”
The idea here is that customers are more trusting than they probably should be. It’s a human instinct that companies can tap when trying to engage customers—so long as companies don’t abuse this trust.
If you wrong us, shall we not revenge?
Herein lies the dark side to Ariely’s test. If person B decides to go home with all the money, the tester will give person A a counter offer: For every dollar person A gives the tester out of his personal bank account, the tester will hunt down and take two dollars from person B. The only one who wins financially, of course, is the tester.
What would you do?
“The moment you trust somebody, and they betray your trust, it’s a terrible feeling,” Ariely says. “The vast majority of people are willing to spend money to make the other party suffer. Not only that, the part of the brain that seems to be activated when people contemplate revenge is the same part of the brain that is activated when we think about pleasure.”
Companies lucky enough to earn a customer’s trust in the five second window now have a responsibility to maintain trust throughout the customer journey, lest they face the wrath of a jilted customer taking revenge on social media.
Tom Kaneshige is editor of Five2ndWindow, Penton’s independent news site helping marketers and line-of-business executives get ahead of the digital disruption happening to the customer experience. You can reach him at email@example.com.