This Blog Post is Worth A Million Bucks

You know that bottle of wine you brought to your friend's dinner party that set you back $20? You could take your friendship to a whole new level if you let them know how much your dropped on the bottle. The level I am talking about is moving from social norms to financial norms. In the book Predictably Irrational by Dan Ariely the difference between social and financial norms are mentioned in Chapter 4. One example that Ariely uses is a daycare that began to charge a fee for parents who were late to pick up their kids. Before the daycare decided to charge parents who came late, people were not always on time but did feel genuinely bad about being late. These parents were following social norms, which put more pressure to take into account other people's time. Once the daycare started charging a fee for parents who were late, parents began to follow financial norms. These financial norms seemed to convince parents that since they were paying to be late, they could be as late to pick up their children as they wanted. The most interesting part was that even after the late fee was taken away, parents continued to follow more financial norms and still showed up late.

One place in marketing where promotion and consumer behavior overlap is warranties on products. Warranties tend to serve as an excuse for consumers to use financial norms instead of social norms. One example from my own life is how I treat products if they have a warranty. Way back in the day, (actually just last year) I bought a fitness tracker for myself. Now this fitness tracker had a warranty that I paid for, I didn't take the best care of it and ended up dropping it in water. I was a little mad at myself, but also wasn't too worried because I had paid for the warranty on it. I was following social norms, I paid for a warranty so had no problem using it.

Now a few months back, I bought a new blender. This blender also had a warranty, but it was included in the price of the blender so I was not paying any extra money for the warranty. I have taken such good care of that blender because I didn't feel entitled to using the warranty since I didn't pay anything out of pocket for it.

One way markers can promote consumers to use social norms instead of financial norms is to include as many "free" features as they can in the pricing of a product. If a consumer feels as though the warranty is a gift as opposed to an added feature they are paying for they are more likely to use social norms.