Thursday, March 8, 2012

Books for Hamburgers: Reciprocity by Proxy?

A recent Wall Street Journal described how children of McDonald’s franchisees are now moving into the business by starting their own franchises. I found it interesting to see how the new generation pioneered a number of new strategies that benefited from their familiarity of the business and the unique perspective they had as a post-“Super Size Me” generation familiar with critiques of the fast food industry. I was particularly struck by the mention of community donations and events like giving books to local children when opening a new outlet or organizing Christmas toy donation events. The young franchisees pointed to the low cost and good community relations from such events; their parent generation simply saw them as a cost.

Giving to good causes in order to be seen as a good citizen is a common strategy to retain good will and drum up business. It works as a reciprocity by proxy: “I did something for a cause you value, so will you do something for me?” Sometimes it is even made into an overt exchange. The Japanese retailer Aeon has for over a decade run a “Yellow receipt” program that prints receipts in a distinct color on certain days: these receipts can be deposited into boxes designating which good cause Aeon should donate to. This year it includes post-earthquake reconstruction, as they make sure to advertise on TV. That is a step further than the book donation because the book donation happens first, and the franchise hopes to get business later. The donations to reconstruction won’t happen unless you buy something and deposit a receipt. In that case it is an incentive by proxy: “If you do something for me, I will do something for a cause you value.”

Which, if any, of these strategies is effective? Recently researchers looked at this through a variety of experiments starting with a hotel towel reuse program that involved either an unconditional donation to a charity or one made conditional on reusing the towel. Both approaches are different from the usual signs suggesting the towel reuse will save the earth. Does it help to unconditionally donate to charities? Absolutely. Does it help to donate conditionally on reusing? Yes, but less so than an unconditional donation. Is there any situation when a donation will not work so well? Yes, people only respond positively to donations to causes they agree with.

These results are surprising because we know that results come more directly if we link rewards closely to actions, and pay later, not in advance. Businesses creating incentive programs and parents bribing children into cleaning their rooms certainly seem to know this. But the logic changes when the reward is not to oneself but to a good cause. Donations and actions for good causes create a feeling of community; that is why they work. If they are perceived as a control attempt instead, the community feeling dissipates and we may react against them instead. Intuition is a good help here. The Aeon campaign of trading receipts for earthquake reconstruction may have been carefully planned, but it fails the “good taste” test for what we think is genuine community spirit, as opposed to a commercialization of it.

Goldstein, N.J., V. Griskevicius, R.B. Cialdini. 2011. Reciprocity by Proxy. Administrative Science Quarterly 56(3) 441-473.
Jargon, Julie. “Super Size Me” Generation Takes Over at McDonald’s. Wall Street Journal, March 8, 2012.

2 comments:

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  2. I am pleased to see that you find it useful for your own site! These strategies are much used in business and interesting to notice, and of course the reason is that they work -- as long as they pass the "good taste" test.

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