“Close to that. Haha… The result of job hopping. If I didn’t jump, how could I have reached that amount?” She replies.

This was a conversation between two of my friends.

To me it is ironical. Ironical that job hoppers get rewarded monetarily, while job loyals stay stagnant monetarily. What does this signal to people? That they should hop around when they could?

It’s the same when it come to products. Say for example, internet service providers. In Singapore’s case, Starhub, Singnet, M1, Pacific and others. You often see wonderful freebies like laptops and some gadget thrown in when you sign up as a new customer. But since when did I hear of laptops and gadgets for existing customers? What are they rewarded with for their loyalty as compared with new customers?

Instead of looking around for new staff, why not concentrate on making them stay? Instead of looking around for new customers, why not concentrate on getting existing customers to buy more? How about giving more to your existing customers than to new customers? Aren’t they more valuable? In a way, I might be enticed to buy something if I knew that the loyalty programs are great, even if there’re no sign up freebies. It does make sense for the long term. Think about it.

Story One

An old woman lived alone on a street where boys played noisily every afternoon. One day, the din became too much, and she called the boys into her house. She told them she liked to listen to them play, but her hearing was failing and she could no longer hear their games. She asked them to come around each day and play noisily in front of her house. If they did, she would give them each a quarter.

The youngsters raced back the following day, and they made a tremendous racket playing happily in front of her house. The old woman paid and asked them to return the next day. Again they played and made noise, and again she paid them for it. But this time she gave each boy only 20 cents, explaining that she was running out of money. On the following day, they got only 15 cents from her. Furthermore, the old woman told them she would have to reduce the fee to a nickel on the fourth day. The boys then became angry and said they would not be back. It was not worth the effort, they said, to play for only a nickel a day.

Did you catch the gist of the story? Isn’t the old lady devilishly clever? By giving the boys money, the old lady has stolen from the boys what they loved to do most. The boys are now playing for money(extrinsic motivation) instead of for fun(intrinsic motivation). Once you remove the extrinsic motivation, they stop playing. We can see this so called ‘motivation by rewarding’ everywhere. Remember when you’re schooling, your English teacher would reward you with a star sticker if you finish a book. We being the intelligent children we are, will tackle the quick and easy books, instead of the quality books. Which defeats the purpose of the reward program. And what happens when you stop rewarding them? Children stop reading.

Story Two

This story is about Captain James Cook. In Captain Cook’s time, scurvy was the dread of long voyages. He noticed that the Dutch ships had significantly less scurvy then English ships. He did not know exactly why. But he observed that Dutch ships had many barrels of sauerkraut, which unknown to them contained traces of vitamin C. Vitamin C prevents scurvy. So he was thinking, “Maybe if the crew would eat sauerkraut, they would not be inflicted with scurvy”.

But Cook had a problem. He cannot tell his crew that he wants them to eat sauerkraut because they prevent scurvy. Why? Because scurvy = long journeys. Nobody likes that. And the threat of a mutiny was very real – if they realise they’re going on a long journey. So telling them is a no-no. What to do then?

This is what he did. Officers are at a place where the men could observe them. And sauerkraut was served only to the officers. Not the men. For a long period of time, that was the practice. After some time, Cook said, “Well, the men could have it too. But only one day a week.”

In due time, the entire crew was eating sauerkraut.

People are not machines. To persuade them you have to make them believe it’s their idea. Cook made use the principle of scarcity. The harder it is to get it, the more valuable the thing is. Land is scarce in Singapore, so it is valuable. Top talent is scarce, that’s why they are so expensive. That is why certain collectibles are released as limited editions. That makes them scarce and in turn valuable. It is a very easy technique to use.

I hope you have gained something. To find out more, read these books

Poor Charlie’s Almanack by Charlie Munger

The Elegant Solution by Matthew E. May

Influence by Robert Cialdini