You’ve been receiving killer deals on great SmartWool gear. Now it’s time to return the favor. We need you, our pros, to share the wool with the world. The submitters of the TEN BEST Testiomonials (with photos) will each win a pair of Spring Gloves!

I recently wrote about how Dan Ariely says that you must not mix social norms and market norms. Within social norms, reciprocation is important, but you have to be careful not to turn it into a transaction. Once you’ve said “If you do this for me, I’ll do this for you,” you’ve essentially entered into a market exchange. Now that you’ve entered into an exchange, the question you naturally ask, is “Is this a good deal for me?” My first reaction to this come-on was “No.”

Why? The Smartwool appeal starts out by explicitly trying not just to obligate me, but by literally saying: “We did this for you, and now you have to do do this for us and this is how much we’ll pay you.” So they set it up as an exchange. But that’s a deal made after the fact — the original deal was they give pros great deals and pros who love the stuff naturally tell their clients that they are the most comfortable articles of outdoor clothing they’ve every worn (which they are). Then they get to my “pay” and when I saw the offer from Smartwool, my first thought was “All I get for giving one of the ten best Testiomonials (with photos!) is a pair of wool gloves?” I mean, the best writing skills out of thousands of people is worth a $30 pair of gloves?

Turns out the gloves sell for $70, but it was too late by the time I read that. For not much more money, they could have offered any one product except the Banff jacket and their worst case payout would have been a $130 product. I personally would have taken a $70 or $90 shirt. More importantly, though, it was just wrong-headed to approach it this way.

What should they have done? I would propose something like this:

Do you love Smartwool products? We need our Smartwool pros to go to our website and leave testimonials and tell the world how great Smartwool products are. Please take a minute and go to our website and leave a testimonial.

Does that work better? It could be hipper or funnier, but I think this is an improvement because if I break it down, here’s how I read it:

• “love Smartwool” — you don’t want anyone else leaving testimonials anyway, right?
• “We need our Smartwool pros” — i.e. we have a relationship, we’ve done something for you; invoke the reciprocity principle, but without turning it into a commercial exchange.
• “Please” — remember, this is a social norm, not a market norm, so we ask for a favor, we don’t offer a bribe.
• “take a minute” — this will be easy. We’re not asking for much considering that your one of our pros.
• “go to our website and leave a testimonial” — tell people what you want them to do. It’s the best way to get them to do it!

Maybe I flatter myself to think I can do better. They have, after all, gotten a lot of testimonials, but they didn’t get mine. Assuming I’m right, it saddens me to see an amazing company like Smartwool shoot themselves in the foot like that. I give testimonials all the time to Amazon Marketplace sellers simply for the asking, and I don’t love those products. I love Smartwool products and would happily give them a testimonial, but I couldn’t help but think “Is that all they’re offering?”

And by the way, go buy some Smartwool stuff. If you do outdoor sports, I’m confident it will be your favorite shirt, socks or whatever. It really is that good and I’m happy to say so here without any reward whatsoever.

Social norms and market norms are separate and you must not mix them. Social norms prevail in social situations. For example, if two friends go out skiing and one friend gives the others some pointers just for fun, that’s a social situation and social norms prevail. The “instructor” would find it absurd to be given cash tip at the end of it, but might feel slighted if the “student” didn’t invite him to his Super Bowl party. If a person goes out and hires a professional ski instructor for a private lesson, the instructor will most definitely appreciate a tip and in fact, expect it. But the instructor has no expectation of being invited to the student’s Super Bowl party.

In most of our lives, it’s clear which realm were in, but not always. In our Yosemite vacation rental business, when a really good repeat customer calls to make a reservation, we often have this “Oh, they’re so nice, we should charge them” feeling. Of course, that feeling just speaks to how powerful social norms are. In Predictably Irrational, Dan Ariely shows the danger of mixing social norms and market norms. If you do, market norms typically win. Surprisingly, though social norms can have a bigger effect. For example, when researchers paid people small amounts for simple tasks, motivation and productivity rose as pay rose. But the highest paid workers are out-produced by one group: those being paid nothing at all. Volunteers actually worked harder than any of the paid subjects (see Ariely, pages 70-75). Why? Because they were asked to do something to help out, and people love to feel that they have helped other people. They will work harder for that feeling than they will for money. Other research shows that giving to others makes us happier than does buying something for ourselves.

We are social animals first and market animals second and most of us get more satisfaction out of satisfying social norms than we do from satisfying market norms. But you screw all this up if you tell Aunt Marge how much your gift bottle of wine cost. Even if she knows it’s cheap or expensive, even if she knows the exact dollar worth of the wine, a gift fits within the context of social norms right up until moment when the price is made explicit. Then, no matter what the price, it fits within market norms and destroys the moment.

Companies mess this up all the time with their loyalty programs by pretending that you and the company are friends. The second they hit you with a late fee and refuse to negotiate, the second they tell you that they have policies and can’t treat you differently than everyone else (i.e. walk-in customers who are not yet “friends”), they have laid bare the nature of the relationship and the perceived switch from social to market norms does serious damage to the relationship. If it has always been a market relationship, that presents no problem. But if you’ve been courted like a friend, like your relationship is personal, like you won’t be treated like everyone else, the abrupt reentry into the realm governed by market norms feels like a betrayal. You end up having stronger negative feelings toward the company than you do towards companies for whom they never had any warm fuzzy feelings. It’s like the difference between hailing a cab and, upon reaching the destination, being asked to pay the fare. No problem. But if you ask a friend for a ride to the airport and at the destination you’re asked to pay “just half” of the cab fare because “we’re friends”. It’s a stab in the back.

Ariely puts it thus:

If you’re a company… you can’t have it both ways. You can’t treat your customers like family one moment and then treat them impersonally — or even as a nuisance or a competitor — a moment later when this becomes more convenient or profitable.

Personally, I never become “friends” with companies, only with people [Update Campaign 2012: "Corporations are people, my friend"]. So no matter how much I respect a business, I don’t buy t-shirts with their logo and I don’t put their stickers on my car. So I’m disloyal, but I’m safe. But what about all those people who not only buy ice cream, but buy a Ben and Jerry’s t-shirt, that is they pay for the right to wear advertising? Of course, I can be bought cheap. If I don’t hate your company and there’s a free t-shirt in it…