Should Customers Follow Soft Values?

by Russ Roberts on November 14, 2005

in Uncategorized

In the previous post, I wrote about the role so-called soft values should play in a business’s strategy and management.  What about customers?  Here’s an excerpt from an email I just received from Typepad, the host of this blog, apologizing for disappointing service:

By default, you will receive a credit for 15 free days of TypePad service. To get this credit you don’t have to do anything; we will just credit your account.

That said, we recognize that customers have had different experiences with the service, so we want to give you the opportunity to choose more, or even less compensation. If you click the link below, you’ll get a screen that offers you the following choices:

    •     While the performance issues caused me some inconvenience I mainly found the service acceptable last month.
Give me 15 free days of TypePad.
    •     The performance issues made it very difficult for me to use the service on multiple occasions during the month.
Give me 30 free days of TypePad.
    •     The performance issues affected me greatly, making my experience unacceptable for most of the month.
Give me 45 free days of TypePad.
    •     I really wasn’t affected and feel I got the great service I paid for last month.
Thank you for the offer, but please don’t credit my account.

In my case, there was a little frustration.  There were a couple of times I tried to post and couldn’t.  Or the site was really slow.  So what’s the moral thing to do?  I’m leaning toward the default and taking 15 free days.  But I really like Typepad and overall have been very pleased.  Do I really want a discount?  Do I deserve one?  (The other day I got some coupons from Blockbuster for free rentals.  I threw them away because they were generated by a class action suit I found foolish and unfair.)  Of course it’s easy to be moral when we’re talking about a few dollars.  I wonder how many people will refuse the default of 15 free days and instead waive the rebate.  I wonder how many would if it involved a few hundred dollars.

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John P. November 14, 2005 at 4:39 pm

I think the contrast between soft and hard values is misleading. It can be taken to imply that some values are "utilitarian" while others are "moral," or that some values are imposed by necessity while others are not.

It seems to me that people value different choices based on how particular they are about different consequences. So-called soft values are values based on consequences that are in some fashion not immediately present, such as employee satisfaction or a reputation for altruism. Even though the consequences of "soft" values may be harder to grasp, they are nevertheless (if one is not completely mistaken in a given instance) real consequences just as out-of-pocket costs are real consequences.

In the case of the voluntary rebate, one choice — opting for the biggest rebate possible, regardless of how little you were actually inconvenienced — has the consequence of keeping a little more money in your pocket, at least in the short run. But a less "greedy" choice — such as opting for only a moderate rebate — has the consequences of saving you less money but also of marginally increasing the likelihood that Typepad will stick around and make similar offers in the future.

The choice should be made according to how much one values those and other consequences. It should not (IMO) be seen as a choice between "saving money" and "doing the right thing."

(BTW — I am another huge fan of this site.)

Matthew White November 14, 2005 at 11:49 pm

I recieved the email from Typepad, as you did. I have opted to forgo the rebate entirely. I did it for two reasons. First, I thought it was a remarkble way to deal with a service disruption that I had barely noticed. Instead of sweeping a problem under the rug hoping no one would notice, they put the onus on subscribers to determine how much we were really inconvenienced and compensate themselves accordingly. (Incidentally, I first learned of the problem through a prior email addressing the steps TypePad had taken to remedy the problem. It wasn't until a few days later that the problem actually affected me.) This strategy might save them a few coins because some people, like myself, will determine that the service problems weren't really that bad and don't justify a rebate. However, some freeloaders will surely get every penny possible out of TypePad. Hopefully, they don't have too many of these types among their subscribers.

The other reason I'm forgoing the rebate is that I expect a few hiccups from a relatively new company that provides outstanding service for such a modest price. (My service is $15 per month.) If, as you ask, the rebate amounted to a few hundred dollars, my expectations would be higher and I would probably request the rebate. But since they provide me with a good product, their support has been outstanding and it doesn't cost me much money, a few posts that take a while longer to publish is par for the course.

They earned some brand loyalty from me with their handling of this problem (I'm not even sure it rises to the "problem" level.) I don't feel like I'm being altruistic, or following soft values, by giving up the $7.50. They've earned it and that's why I won't take the money.

mike November 16, 2005 at 1:36 pm

My suspicion is that they are really paying for the feedback on how the service disruption affects their clients. The $15 dollar category is irrelevant.

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