Social norms, market norms

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In Predictably irrational author Dan Ariely explains two different systems that guide our actions- social norms and market norms. The two systems run great independently, yet they cause problems when mixed. Here’s a brief summary of the two.

Social norms are the accepted social behaviors between friends. For example, if you attend Thanksgiving dinner at your in laws home, it is understood that you may help out by washing the dishes, but uncouth to attempt to pay for the meal. On the flip side, if you go to a restaurant for a meal, once finished, they prefer you pay for the order even though as a child I frequently heard washing dishes was an acceptable consolation if the patrons could not pay. As an adult, it turns out this is a rare occurrence. So long as we maintain a distinction between which norms are governing the event, life moves swimmingly.

Nevertheless, some companies have begun to run ads that infuse social norms into their message. Take Olive Garden for example. The restaurant chain’s TV commercials famously instructed consumers “When you’re here, you’re family”. This changed on October 5, 2012. OG’s parent switched the tag line to “Go Olive Garden”. See the difference? The original theme was very casual. The new slogan is a command: (You) Go (to) Olive Garden. Business Insider suggested the switch happened precisely because the “family” wasn’t coming around very often.

“Turns out that even though everyone recognizes and easily associates with the ‘family’ tag line, consumers have been treating Olive Garden like the great aunt you visit on a bi-annual basis than a close relative. Guests have lagged the past 23 of 24 months and sales have been down.”

After posting these results, it appears Darden is trying a new tack: switching to market norms. At the very least, we know exactly what Olive Garden expects out of us.

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