Start With Why

didn’t need to invest in the things that build loyalty if all they wanted to do was drive transactions, their business became vastly more efficient and more profitable.
    For transactions that occur an average of once, carrots and sticks are the best way to elicit the desired behavior. When the police offer a reward they are not looking to nurture a relationship with the witness or tipster; it is just a single transaction. When you lose your kitten and offer a reward to get it back, you don’t need to have a lasting relationship with the person returning it; you just want your cat back.
    Manipulations are a perfectly valid strategy for driving a transaction, or for any behavior that is only required once or on rare occasions. The rewards the police use are designed to incentivize witnesses to come forward to provide tips or evidence that may lead to an arrest. And, like any promotion, the manipulation will work if the incentive feels high enough to mitigate the risk.
    In any circumstance in which a person or organization wants more than a single transaction, however, if there is a hope for a loyal, lasting relationship, manipulations do not help. Does a politician want your vote, for example, or does he or she want a lifetime of support and loyalty from you? (Judging by how elections are run these days, it seems all they want is to win elections. Ads discrediting opponents, a focus on single issues, and an uncomfortable reliance on fear or aspirational desires are all indicators. Those tactics win elections, but they do not seed loyalties among the voters.)
    The American car industry learned the hard way the high cost of relying on manipulations to build a business when loyalty was what they really needed to nurture. While manipulations may be a viable strategy when times are good and money is flush, a change in market conditions made them too expensive. When the oil crisis of 2008 hit, the auto industry’s promotions and incentives became untenable (the same thing happened in the 1970s). In this case, how long the manipulations could produce short-term gains was defined by the length of time the economy could sustain the strategy. This is a fundamentally weak platform upon which to build a business, an assumption of never-ending boom. Though loyal customers are less tempted by other offers and incentives, in good times the free flow of business makes it hard to recognize their value. It’s in the tough times that loyal customers matter most.
    Manipulations work, but they cost money. Lots of money. When the money is not as available to fund those tactics, not having a loyal following really hurts. After September 11, there were customers who sent checks to Southwest Airlines to show their support. One note that accompanied a check for $1,000 read, “You’ve been so good to me over the years, in these hard times I wanted to say thank you by helping you out.” The checks that Southwest Airlines received were certainly not enough to make any significant impact on the company’s bottom line, but they were symbolic of the feeling customers had for the brand. They had a sense of partnership. The loyal behavior of those who didn’t send money is almost impossible to measure, but its impact has been invaluable over the long term, helping Southwest to maintain its position as the most profitable airline in history.
    Knowing you have a loyal customer and employee base not only reduces costs, it provides massive peace of mind. Like loyal friends, you know your customers and employees will be there for you when you need them most. It is the feeling of “we’re in this together,” shared between customer and company, voter and candidate, boss and employee, that defines great leaders.
    In contrast, relying on manipulations creates massive stress for buyer and seller alike. For the buyer, it has become increasingly difficult to know which product, service, brand or company is best. I joke about the proliferation of toothpaste varieties and the difficulty of choosing the right one. But toothpaste is just a metaphor. Nearly every decision we’re asked to make every single day is like choosing toothpaste. Deciding what law firm to hire, college to attend, car to buy, company to work for, candidate to elect—there are just too many choices. All the advertising, promotions and pressure employed to tempt us one way or another, each attempting to push harder than the other to court us for our money or our support, ultimately