Kindle Review – Kindle Fire Review, Kindle 4 Review

There are different ways in which a company could approach its customers.

What Value Proposition could a company offer its Customers?

Some of the common value propositions you’ll see are -

1. Win-win – We’re providing you solid value and we want some value in return.
2. Win-win with benefits – We’re providing you solid value plus we’re doing good (or we are open) and we want some value in return.
3. Altruism – We’re providing you solid value and we want nothing in return.  
4. Altruism with benefits – We’re providing you solid value and we’re doing good (or we are open) and we want nothing in return.

However, this is what the companies are telling us.

What are they really going for (consciously or unconsciously)?

Perception Vs Reality

Companies always have their best interest in mind. They’re just using any means necessary to win customers.

Consider 3. and 4. in the above list – those are value propositions that make zero sense. If a company were actually truly good at 3. or 4. they’d be out of business in a year or two.

Yet, companies are very profitable based on 3. and 4. Perhaps its magic, perhaps it’s them exploiting our need to see goodness and self-sacrifice.

Self-sacrifice

There’s this grand illusion that people and companies are capable of consistently acting against their own self-interest.

It’s simply not true.

Why then are we quick to jump when companies or people promise to do things for no other reason than to help us?

1. Because it’s the most amazing thing in the world when someone subjugates their own self-interest to help others.
2. It’s the ultimate example of the individual sacrificing themselves for society, and society is set up to reward it.

We hand out Nobel Prizes for it.

Smart Strategies and Too-Smart Strategies

Smart Companies and People promote win-win

It makes sense to create win-win situations.

Any smart company or person will realize that you don’t really have to self-sacrifice. You can simply strike up an equitable bargain and get a reward that matches the amount of value you provide.

The problem arises when you get people who are too smart.

Companies and People that are too smart pretend to be sacrificing themselves for you

A company that provides value and also promises to be killing itself for you is a compelling proposition.

1. It would outpace a company that provided as much value but did not ‘do good’.
2. In fact, it would even beat a company that provided a little bit more value.
3. In a few rare cases, a ‘open, good’ company could even beat a rival company that provided a lot of value but was perceived as not good.

Which brings us to the ultimate strategy for a company that gets left behind.

Altruism is the best strategy for the #2 and #3 companies in a space?

#2 and #3 are truly in a bad spot -

1. The #1 company has more customers and economies of scale and more brand recognition.
2. It probably has a lead in some area that lets it become and stay #1 – experience? technology? customer service?
3. The #1 company can provide more value than any other company.

The best strategy for #2 and #3 would be to find an actual competitive advantage (or several) and find a way to get attention.

They have to arouse interest without having most of it flow to the #1 company (it’s got the brand recognition remember).

However, that takes a ton of work and sometimes a ton of time.

It’s much easier to use the twin illusions of openness and goodness

Perception is sometimes reality and the #2 company in a space can match or beat the value proposition of the #1 company by promoting its goodness and openness -

1. The best way to leverage openness – promise tons of benefits, some of which aren’t even real. 
2. The best way to leverage goodness – get customers to trust you to the level they’d never trust a company that doesn’t sell itself as good.  
3. Go out of your way to attack the ‘closed’ system another company has – attack all its competitive strengths as examples of being evil.

Some Prime Examples

A few examples of using ‘openness and goodness’ to attack #1 companies –  

1. The attack on Apple’s App Store. Everyone is scared that Apple own Mobile and that Mobile might be the future of the Internet. The solution – attack Apple as being evil.
2. The attack on Amazon. Amazon seem to be on track to own the future of Publishing. The solution – paint its main competitive advantages as evils.

It ought to be painfully clear that altruism is being used as a strategy.

Why Altruism as a Strategy is Powerful

The underlying psychological reason this works

Groups of people who helped each other and created win-win situations thrived at the expense of other groups that fought each other.

That meant you had two traits rise to prominence -

1. The trait to help other people. Note that this was still second or perhaps third to self-interest. 
2. The trait to recognize and reward people who were helping us.

Companies and People that are too smart will exploit the second trait.

That’s why you often have companies push very intangible benefits i.e. we are open and we are good and we are trustable.

These ‘features’ often have little value to customers. However, the reciprocation they invoke is very tangible.

The worst offenders are usually the ones claiming to be the most altruistic

Take Facebook. They changed their policy so by default people’s personal information will be exposed to the world.

They wrote about it as ‘We are now giving you better Privacy options and more control’.

Facebook is the poster-child of a too-smart strategy -

1. They give away their product for free promising no costs.
2. They then turn around and expose customer information to advertisers.
3. When that doesn’t work they try other measures like Beacon (which got shot down by users).
4. When that doesn’t work they change default privacy to no privacy to try to get traffic from search engines. 

At every step they are claiming to be doing what’s good for customers.

What they are really doing is trying to monetize customers in ways not agreed to by customers.

The Moral of the Story

There is no Moral to the Story.

Every company wants to get something from you.

It’s up to you whether you prefer -

1. To pay upfront.
2. To know what you’ll pay down the line. 
3. To pretend that it really is free and the company is doing it out of the goodness of their heart. 

Filed under: Reality Tagged: | altruism, false altruism