In his book Predictably Irrational: The Hidden Forces That Shape Our Decisions, the great behavioural economist Professor Dan Ariely tells a story about the dinner party from hell. The problem with the soiree is not the choice of guests per se, but the way one particular guest chooses to thank the hostess. So delighted is he by her food and hospitality, he attempts, at the end of the meal, to pay her. The point of the anecdote is that humans are not the perfectly rational money-motivated beings traditional economists like to think we are. In economic terms, the guest was being fair and So delighted is rational – he enjoyed he by her food a meal so wanted to compensate the person and hospitality, he who supplied it. In real attempts, at the life, he would be lucky end of the meal, to receive an invitation to dinner ever again. to pay the hostess Ariely (page 16) dives deeper into the ‘irrational’ human psyche in this edition’s cover story. Like the dinner-party hostess, it turns out that people rather like putting their own efforts into something, and don’t expect the returns that traditional economists might expect. Consider the fascinating case of bakers who buy more cake-mix the harder it is to use; and the origami makers who pay more for poorly made paper animals, just as long as it was they who toiled to construct them. Ariely is not immune: his favourite piece of furniture is one that came flatpacked from Ikea. He hated building it. But now he has, he values it much more than the ready-made pieces he owns of much higher quality.
The focus theme this quarter is The New Customer – and the need for customization. Input and interaction is at the heart of the way the customer has changed. Look at the way consumers’ attitudes towards brands are changing. Christian Madsbjerg and Sandra Cariglio (page 20) show that the days of buying an off-the-peg identity are dying away. The companies that are stealing a march are those that offer a way of adapting, combining or customizing, to foster in their buyer an authentic feeling of individuality. One person who knows much about the ways – and changes – in which consumers value things is the psychologist Dr Linda Papadopoulos, our star interviewee (page 34). Papadopoulos, a Canadian national, is a well-known face in Europe as a TV and magazine relationships adviser. Yet behind the scenes she works with several premium brands to help executives understand what motivates customers. Not everything that seems irrational, is, she suggests. There is much more inside the issue. A lesson in project focus from the decorated thinker Antonio Nieto-Rodriguez deserves a place on the wall of every company. Grasping the art and science of focus, says Nieto-Rodriguez, is the difference between life and death in business. Read his wise words on page 74. Nieto-Rodriguez’s advice, coupled with a need to understand the nuances of sales in a world changed forever by the sharing economy, is at the heart of success in a volatile global economy. Billions of people still want to buy things. Billions, too, want to sell. Yet how those deals are made – and the relationships behind them – are changed forever. Enjoy the issue. Ben Walker is editor of Dialogue
Q3 2017 Dialogue