You Spoke. We Ignored It.
Posted by Adam Benforado on October 9, 2010
A couple of weeks ago, I wrote a post in which I questioned the practice of corporations (1) selling a narrative that the American public is made up of rational actors, exercising free choice, in an open market, while, at the same time, (2) working hard to “limit choice and confuse or reduce the knowledge of potential buyers.”
This morning, while cleaning up my office, I came across the following excerpt that I’d clipped from an article by Barry Berman, the Walter H. “Bud” Miller distinguished professor of business and director of the Executive M.B.A. program at Hofstra University’s Zarb School of Business:
If you ask customers whether they want more variety, I can tell you right now what they’re going to say: Yes. After all, who doesn’t think they want a lot of choices? And it’s common for consumers to be both sad and angry when a product they like is discontinued.
So don’t bother asking. It’s better to depend on data, rather than what is often a mistaken emotional response.
Gather information from point-of-sale systems and loyalty programs, analyze product data such as sales per square foot, and conduct field experiments to determine what effect offering a wide selection of similar goods—say, 16 similar black-and-white laser printers—really has on total sales in certain product categories.
Use the findings to identify products that don’t sell well, products with high revenue but low profitability and/or high inventory carrying costs, and products plagued by production problems. Consider targeting them for elimination.
As various posts on the Situationist have chronicled, the evidence provided by psychologists and others who study “choice” suggests that Professor Berman is right. And, if your goal is solely to increase the profitability of your company, you’d do well to heed his advice.
However, as a consumer, I think that the broader message in Professor Berman’s comments is troubling primarily because corporations go to such lengths to convince us that they are listening to the wants, desires, and ideas that we voice. Indeed, it’s a major part of many corporate strategies.
Think about all of the advertisements and marketing campaigns that you come across in your day-to-day routine that emphasize the theme of customers speaking out and corporations listening and responding. As Best Buy explains, “You Spoke. We Listened. Thanks to your ideas, we’re continuing to create future technology designed just for you.” Moss Adams LLP, one of the largest accounting and consulting firms in the United States, offers the identical statement on its website: “You Spoke. We Listened.” Whole Foods serves up a subtle variation: “You Talked, We Listened.” It turns out, “Whole Foods Market has been listening to its customers for over 30 years.”
Why do all of these companies sing the same song? The answer, in part, is because it’s music to our ears. We like to feel in control. And encouraging this perception allows companies to engrain the idea that corporate entities merely respond to our preferences. That is, they do not create preferences, or steer individuals toward harmful, but profitable, products—actions that would make the case for significant regulation or legal liability. They are our passive pals—dutifully hanging on our every word.
Perhaps I’m out to sea, but if corporations aren’t in fact listening to what I say—if they know, as Professor Berman suggests, that I exhibit “mistaken emotional responses” and am a situational character, rather than a rational actor—I don’t want them telling me how valuable my feedback is and how clever, smart, and capable a consumer I am.
I’d prefer the cold, hard truth.
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For a sample of related Situationist posts, see “Deep Capture – Part VII,” “Market Manipulation – Assuaging Cognitive Dissonance,” “Tamara Piety on Market Manipulation,” and Taking Behavioralism Seriously (Part I) – Abstract and Top Ten List.