When it comes to business, it’s easy to get clinical or transactional. Especially if what you’re selling is a physical object and even more so if your bank balance is plunging into the red.
You have product x, I want it and so I hand you over my hard earned money for it.
This is how we view a standard contract:
These are all established quite quickly in many instances. I make an offer to pay your asking price in exchange for the product, you agree and the exchange of money for stuff is pretty much complete. What most businesses forget, or perhaps don’t even notice is that before they enter into this transactional contract, another contract is already in existence and when it comes to long term relationships and trust, it’s far more powerful…
Introducing the social contract
The social contract is the unwritten, unspoken agreement that exists between a consumer and business or brand. In more social settings, it’s the support or backing they offer to a brand whether that be a politician, musician or sports star. In business, it’s the contract that lead to the customer’s decision to choose you over your competitors and unlike the formal contract where you have most if not all the power, in social contracts the power lies with the consumer. They set their terms of expectation and offer you their trust and loyalty only for as long as you do what they expect of you.
So how on earth do you know what a customer expects of you?
This is the hard part because the expectation a customer has will depend on the values they’ve attached to your brand.
- Do they just tolerate your product because their motivation is to save money and you’re the cheapest?
- Do they keep coming to you because you offer reliability and certainty in what you say you’ll give them?
- Does your brand represent a deeply personal value they either hold or wish to acquire?
In the first two situations, provided you remain consistent, you’re pretty safe in meeting the requirements of the social contract. However, when the motivation isn’t just for certainty, the values driving the customer’s support and and the business or brand’s expectations of what they need to deliver are often worlds apart.
Price and certainty
Many social contracts around price and certainty seem to be the more transactional, less emotional ones. One example of this is to do with airlines and the difference in expectation between a full cost carrier (i.e. Emirates, Singapore) and a budget airline (i.e. Scoot, Ryan air). A customer of a full cost carrier will expect all the bells and whistles because that’s what they believe they’ve paid for. So if you turn around and make them pay to reserve specific seats (as I recently encountered) or end up with long delays to the flights, while we may let it slip with a budget airline, it makes us second-guess not only how you have marketed yourself to us but what we believe we should expect from you.
Emotional, values driven contracts
However, when the motivation isn’t just for certainty, the values driving the customer’s support and and the business or brand’s expectations of what they need to deliver are often worlds apart. Because humans are completely irrational, emotional creatures (much as we’d like to think ourselves otherwise), it’s often incredibly difficult for companies to get inside the heads of their consumers (this is one of the problems with market research through direct questioning). It’s easy enough to guess why they’ve chosen you (i.e. price, quality) but in doing so, you’re projecting your own expectations and desires onto them which makes it more likely than not that you’ve missed the actual motivation. To make things even more challenging, it’s quite common for people not to recognise their own underlying motivations for their own actions, creating explanations after the fact. This means that many companies spend countless dollars on campaigns that target what they think the customer expects of them while failing to see conversions because their strategy actually misses the mark.
For this reason, if you want some control in the social contract, the best strategy is to be transparent and to market what Simon Sinek calls your Why. Set the expectation before the customer even knows of your existence so that when they discover you, they’re naturally drawn to what you stand for. Companies that do this really well are ones who look past the physical product and actively show what they stand for because it’s these values that people are drawn to. They want to be seen to share them or wish to acquire them. Whether that’s environmental sustainability as in the case of Patagonia, the rebelliousness that came with owning a Harley Davidson or the determination and persistence that Nike represents, if you can appeal to a deeply entrenched or desired value, people will seek out and support a brand that brand.
What happens if you break the social contract?
Think of it like the situation where the boyfriend is being told off for something he has no idea he’s done. When it comes to social contracts, companies that don’t do what’s hoped for (even if it’s never communicated), are promptly scolded by the angry girlfriend. This is because it’s no longer just about the item purchased, this is now about disappointment, betrayal and wounded trust. And as you’ve probably discovered over time, an emotional person is much more difficult to talk to than a rational one.
But in being emotional, it means that what the person is after is recognition of their feelings. They want to be made to feel like you know you’ve upset them, that you’ve done something wrong and most importantly that you’re sorry about it. For this reason, getting flustered or simply standing by your product or transactional contract is the worst thing you can do. It’s also important to note that the expectation is projected not only onto the item or service purchased or supported but also the people representing it. So if your customer service team are not an exact mirror of your brand values or your CEO goes on a spending spree when your target market are the frugal, spend-less group, be prepared for retaliation.
Want to know more?
If this is a problem you think your brand is facing, our value analysis sessions could be just what you need!
And for those of you who love a good book, here are a few fantastic books on the topic:
- Unthinking – Harry Beckwith
- Second that emotion – Jeremy D Holden
- Start with Why – Simon Sinek