You Belong with Your Customers

By on September 24, 2014

Fascinating studies about cooperation are focusing us on the direct benefits to businesses that will transform their customer strategy.

In The Evolution of Cooperation, Robert Axelrod explained his research on players of the game Prisoner’s Dilemma. This game famously demonstrates how two players can be more successful over time if they cooperate for mutual gain and avoid the short-term temptation to play selfishly because they want to avoid the risk of being suckered by the opponent.

Axelrod’s experiments validated a system in which players that cooperate on the first move and both parties win, will subsequently echo (reciprocate) what the other player did on the first move. They were never the first to defect and, in turn, “won, not by doing better than the other player, but by eliciting cooperation [and] by promoting mutual interest rather than exploiting the other’s weakness.” Most of game theory had previously investigated “zero-sum” with the total rewards fixed and each player working at the expense of others. Axelrod’s winners won by consistently scoring higher with a variety of partners, rather than striving for a payoff greater than the other players. Axelrod calls the concept “clarity” – rather than outmaneuvering the other player through a complex strategy, the winners were more successful by simply cooperating instead of trying to be too clever.

What are the implications for an organization’s thinking about its customers? It places a new emphasis on collaboration with customers. It directs us to see the role of a business as an important part of a group that includes its customers. When businesses visualize themselves as part of a group, instead of a supplier to a group—the game changes completely. Suddenly, those organizations are focused on reciprocating to their customers, not operating under some mythical “arms-length” relationship. It becomes a combined effort for the group’s success, which is more purposeful and represents the greater good.

Groups that are more successful—for reasons, including learned behaviors—will benefit all individuals of the group. In the spirit of Richard Dawkins’ selfish gene theory, the unit of evolution is not the individual, but the perpetuation of the community that connects those individuals. A new type of kinship helps to develop a broader, more profound view of what constitutes self-interest. If group members can benefit simply on the basis of a shared exchange, the benefits come not from altruism, but directly from reciprocity.

Barlean’s Organic Oils recently “set out on an epic journey that completely changed our purpose and business paradigm.” Called Pathway to a Better Life, it’s about “creating prosperity for those most in need throughout the world.” In addition to selling the high-quality nutritional supplements they have regularly sold, now they are now partnering with anti-human trafficking organizations, helping at-risk populations in need, helping autism awareness and getting healthy products to those in need in Washington state. Their notions of fairness and simply doing the right thing have evolved to a much more expansive worldview of the groups they belong to and want to help succeed.

If organizations have the clarity engendered by belonging to a group that is mindful of a larger purpose, collaboration with that group will be natural. And the payoff is better for every member of the group—the company, its employees and its customers. That is the formula for a better future in which all stakeholders identify with the success of the group and are loyal to the group. It is not an isolated do-gooder philosophy, but a deep-seated belief that groups (the business, its customers, and beyond) will do better by sticking to a pattern that benefits all players and the purpose that the group is working for.

Collaboration and customer success go hand-in-hand.

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