It Really DOES Pay to Schmooze

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Socializing

One of my all-time favorite TV commercials is the classic 1990 United Airlines spot that shows a manager distributing plane tickets to the sales staff so they can visit their customers in person. This was filmed in the days before email and the Web, but even then phones and faxes were viewed as a substitute for face to face meetings. Here it is:

This ad works because it tells a story that resonates with its audience and also because of its acting and production values; it’s a full-blown business drama packed into a 60-second commercial. As it turns out, there’s research that backs up United’s implied claim that there’s no substitute for face-to-face customer contact. Good, old-fashioned face time can have a significant impact on trust and behavior.

Experiment Shows Power of Socializing

Scientists love to create artificial situations to mimic the real world, and one of the classics is a setup known as the Ultimatum Game. In it, one participant decides how to share a sum of money (e.g., $10) with another subject. The second subject can accept or reject the split. In the event the split is rejected, nobody receives any money. While classic economic theory suggests that any non-zero offer should be accepted (since even a dollar is better than nothing), real people tend to reject “unfair” offers that are too skewed toward the first subject.

In the standard Ultimatum game, about half of all splits are “fair” – within 10 points of a 50-50 split. A third of the splits are rejected, presumably because they are perceived as unfair.

As described in Secrets of the Moneylab by Kay-Yut Chen and Marina Krakovsky, researcher Al Roth tried an interesting twist on the Ultimatum game – he had the subjects talk face-to-face before playing. Amazingly, even when the subjects were told not to discuss the game and chatted about random topics, they were far more likely to successfuly split the money. With the conversation, the percent of “fair” offers rose to 83%, and a mere 5% of the games resulted in failure.
Effect of socializing on successful splits
That’s a stunning difference, and shows that establishing rapport with another person really does alter behavior.

So, don’t be in too much of a rush to get down to business. Time spent chatting about kids, golf, or the upcoming weekend may SEEM like a waste of time, but it’s laying the groundwork for mutual respect and trust. The likelihood of reaching a deal that satisfies both parties will increase. An interesting probability is that connecting electronically via social media could have a similar effect; certainly, a full video connection like Skype or Webex would seem to allow some level of face-to-face socializing?

8 Comments
  1. Chris Zdunich says

    Roger, this is a timely post. One of the big discussions within Sales 2.0 circles, is whether or not sales people can successfully do most of their selling over the phone and internet.

  2. Roger Dooley
    Twitter: rogerdooley
    says

    I think the key variable is the feeling that you KNOW the person you are hoping to do business with. If web-based communications can build that bond, then they will be effective.

    I don’t think it’s so much about technology as habit. In person, we’ll grab a coffee or have lunch. When communicating electronically, often there’s a tendency to get right to business. Maybe this dates back to the time when long-distance calls and web conferences were metered and costly.

    Roger

  3. Chris Zdunich says

    Or, maybe, on a long distance call or web conference, there’s a disconnect in trust and rapport, so they feel they have to get right to it.

  4. Pablo Edwards says

    Great topic! And it couldn’t be more true! I love the video you posted. Amazing that you found it.

    1. Roger Dooley
      Twitter: rogerdooley
      says

      That video was hard to track down, Pablo. I had originally searched and found only broken links. My original text asked readers to post a link in comments, but then I tried one last search (thanks, Google!) and found it. To me, it’s the best airline commercial ever and easily “Super Bowl” quality.

      Roger

  5. Greg says

    Skype- yes, social media, maybe. I think it’s primarily a function of attention- video conferencing, you can’t fake it, you’re on camera, with social media, it takes the other party actually paying attention, connecting and overcoming the social vs commercial nature or perceived nature of the communicaiton.

    1. Roger Dooley
      Twitter: rogerdooley
      says

      I tend to agree about Skype, Greg. With a good video connection, you can pick up the nuances of expression and provide a reasonable simulation of in-person conversation. As a bonus, you may get to see the environment of the person you are talking to, which might further improve the emotional connection.

      Roger

  6. Fashion Photographers
    Twitter: Meiniesmith
    says

    There’s a few things that this brings up in my mind:

    1) It’s pretty cool that you recognized the fact that the commercial was shot very well. Do you have some kind of background in production or photography/cinematography? Because lately in my industry, I feel like the production quality has decreased for the majority of ads out there and I feel this may be due to people rushing things.

    2) In my experience, when I’ve built some sort of rapport with clients, not only do I get more business, but the collaboration during the project goes much better than if there had been no prior schmoozing.

    2)

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