The Importance of Social Learning in Balancing Customer Delight and Profits

The Importance of Social Learning in Balancing Customer Delight and Profits

Why Social Learning Matters

There is only one way to learn, and that is through other people. Social learning is what has helped humans develop through generations. It’s what helped pass down ideas of the greatest thinkers in history, be them philosophers, scientists, or mathematicians. It’s the reason why you’re able to read this sentence at this very moment.

The ability to share information and learn something together is a strong human nature that makes us different from other animals. That makes social learning humanity’s main advantage over other species, including primates. People teach people, regardless of the setting or the means.

The Ratchet Effect happens when cultural information is learned, and then modified/improved according to a person’s own values. The reason it’s called The Ratchet Effect is because cultural information can’t be unlearned — it can only be changed and improved upon.

Knowing is one thing. Exploring is another. And both are crucial for learning and understanding. Unless they’ve mastered both theory and practice — the practice being the true social learning aspect of knowledge — they haven’t fully learned anything.

Albert Bandura’s Social Learning Theory says exactly that: humans’ learning and behavior are based on “observing, modeling, and imitating the behaviors, attitudes, and emotional reactions of others.” Social learning goes to show that people learn better and attain more information by teaching others.

It’s pretty interesting how deep discussions can go when you’re willing to learn and share your point of view. Since the number of perspectives directly connects with one’s understanding and depth, we should all consider learning socially.

Writing things down is essential for learning. Never underestimate people’s intelligence. You can always learn something new by reading, observing, and listening — no matter whose words you’re reading, who you’re observing, or who you’re listening to. Give people a chance to teach you things. You’d be surprised by how much you can learn from a simple passage or conversation.

The takeaway: allow yourself to learn from people, whoever they might be. Pay attention. Observe. Discuss. Doubt. Look for a deeper meaning. Read between the lines. We’re social beings who can only go forward from here.

How to Balance Customer Delight & Profits

In the business world, it is crucial to find a balance between customer delight and profits. Without happy customers, a company cannot thrive, but without profits, it cannot sustain itself. So how can businesses achieve this delicate balance?

The DHM model, which stands for Delight customers in Hard-to-copy, Margin-enhancing ways, provides a framework for achieving this balance. By focusing on delighting customers in ways that are difficult for competitors to replicate while also enhancing profit margins, companies can create a sustainable competitive advantage.

However, it is important to note that what customers say doesn’t always match their behavior. To truly understand customer preferences and values, A/B testing is necessary to measure behavior change. This allows businesses to invest in features and offerings that customers truly value, while minimizing investment in those that are less important to them.

Netflix provides a great example of how to balance customer delight and profits. They invested in things their members valued, such as a broader DVD selection, lower prices, and next-day DVD delivery. On the other hand, they invested less in features that their customers didn't value as much, such as new release DVDs, social features, and unique movie-finding tools.

By understanding customer preferences and aligning their investments accordingly, Netflix was able to build a strong brand and create long-term customer trust. Even though they experienced short-term losses, their hard-to-copy brand and customer trust gave them a significant advantage in the long run.

When making product decisions, it is important to consider the stakes involved. High-stakes decisions that are difficult to reverse require careful consideration and gathering of data. On the other hand, low-stakes decisions that are easy to reverse can be decided quickly and moved on from.

Many product leaders mistakenly believe that most decisions are high stakes, leading to a tendency to postpone decisions. However, postponing decisions only creates ambiguity and can make things worse. It is important to be decisive and make decisions in a timely manner.

In conclusion, balancing customer delight and profits is essential for business success. By understanding the principles of social learning and leveraging them to create value for customers, companies can build strong brands and long-term customer trust. Additionally, by making informed decisions and being decisive, businesses can navigate the complexities of the market and achieve sustainable growth.

Actionable Advice:

• 1. Embrace social learning: Allow yourself to learn from others, whether through discussions, observations, or reading. The more perspectives you encounter, the deeper your understanding will be.

• 2. Conduct A/B testing: Measure customer behavior change to truly understand their preferences and values. This will help you invest in features and offerings that are highly valued by your customers.

• 3. Be decisive: Distinguish between high-stakes and low-stakes decisions and act accordingly. High-stakes decisions require careful consideration, while low-stakes decisions should be made quickly to avoid ambiguity.