Lessons from game theory
Years ago, when customer referencing was first becoming a “thing” — a recognized discipline — my colleagues and I used to debate about the pros and cons of how reference programs should be managed.
One of the most interesting aspects of that debate was where advocacy programs should sit.
Should referencing be considered a subset of sales, or of marketing?
You could argue either side.
“Sales, of course! Because after all, aren’t references critical to closing deals?”
“No, no, make that marketing! Marketing can’t be effective without a robust pipeline of hard-hitting customer proof points!”
For the program I support today, the outcome of this argument was perhaps inevitable. It’s both. Assuming the customer is willing to serve as both a sales and marketing reference, make the ask and share the customer wealth.
But corporations being corporations — i.e., made up of people! — as reference programs matured, other tensions emerged.
Who “owns” the customer as am advocacy program candidate?
What’s the best way to prioritize “asks” when customers have agreed to speak externally about their experience with a company’s products or services? How much is too much to ask of a customer–and who gets to say when enough is enough?
If we consider this question more closely, we can see there are actually two answers:
- The account team.
- Everybody else.
The account team has ultimate responsibility for the customer. And — if this needs to be said, hopefully it doesn’t! — sales is what pays everybody else’s salary.
It should be an inviolate rule of every reference program that all asks go through the account team. Reference priorities are never more important than the quality of the customer’s experience with the company.
But let’s assume the account team has validated the customer’s willingness to participate in reference requests. What next? What is the best way to ensure everyone’s needs are met?
In complex enterprise organizations, “what’s next” can quickly devolve into a scrum. References are leveraged by so many different functional teams! PR, brand, events, communications, vertical marketing teams, executive comms teams. Whose request has the highest priority? Who has to wait? Should anyone’s request be withdrawn for the sake of another’s?
When bad incentives happen to good people…
To make things even more complicated, corporations — without necessarily intending to — incentivize territorial behaviors around customers who have signaled willingness to be references.
Reference quotas. I’ve seen executives set “quotas,” telling reference managers that they need to deliver x# references on such-and-such a product by such-and-such a deadline. Reference managers operating under these kinds of directives are, naturally, strongly incentivized to “claim” references and block others from touching them.
Organizational silos. In large companies with siloed business units, there may be cultural barriers that mitigate against sharing customers — despite the fact that to the customer, it’s all one company.
Siloed reference responsibilities. Why should I “share” a reference with you when I have no visibility into your ask is or why it’s important?
Cooperation doesn’t just feel good. It wins the game.
If we look more closely at these factors, we can imagine another layer as well — one that may impact the effectiveness of reference programs even absent these factors. These might include a lack of a sense of teamwork and cooperation. It could be feelings of scarcity (“there aren’t enough good references to go around!”) or personal anxiety.
How do we counteract these tendencies — some of which are cultural or even psychological in nature?
A terrific starting point is Robert Axelrod’s classic book on game theory and cooperation, The Evolution of Cooperation. Axelrod’s game theory research showed that in Prisoner’s Dilemma scenarios, being “nice” — never cheating, never being the first to defect — was the strategy most likely to win.
Here’s some insights from the book we can apply to advocacy and referencing:
Don’t be envious. Don’t compare what you have (in our case, reference leads or portfolios, for example) to that of others. It’s a waste of time and as a framework for decision-making will undermine our odds for long-term success.
Don’t be the first to defect. Begin from a place of open-ness and generosity. Our first move should always be to collaborate and to share.
Reciprocate both cooperation and defection — but don’t fall into the trap of “unending recriminations.” We need to be generous with forgiveness.
Interact frequently with contacts, stakeholders, and reference colleagues. This might sound like a no-brainer, but the point is a subtle one. Contact with others helps to nurture a solid, ongoing pattern of mutual cooperation that pays off over time. It’s a hard-wired aspect of humans as social creatures.
“Others’ success is virtually a prerequisite for your doing well yourself.” We should always be quick to help others in our extended network find and onboard high-quality references. This models a cooperative culture. It also maximizes the odds that everyone’s reference projects will do better in the long run.
These guidelines work in any corporate or team setting, of course. They apply to any scenario where groups of people can choose between cooperation and conflict, between hogging goodies and sharing them, between elevating oneself at the expense of others or pitching in to give everyone a share of success.
They are universal.
And most importantly, this approach works. The algorithm Axelrod designed around these principles consistently beat other strategies in computer-based Prisoners Dilemma games.
It works in game theory–and it works for advocacy and reference professionals.