People have debated the issue of whether employees and customers value time versus money for centuries. Which one makes people happier? Knowing the answer as it relates to your employees and customers could make and save you hundreds of thousands of dollars. Of course happier employees make for happier customers. Happier customers will then purchase more of your products or services. The answer to the question of time versus money lies in your company's culture as well as some proven data.
A corporation's culture plays out in how people communicate, information is disseminated, feedback is given, performance is managed, and projects are co-coordinated. It is reflected in the values of its leadership, the way the corporation is structured and whether work is conducted cross-functionally or within silos. Without a doubt, all companies want their culture to be a productive one.
Zappos Steps to 'Happiness'
When trying to find a standard to follow in any industry I like to look at innovative companies. Zappos, an e-commerce juggernaut, is one of those. Zappos booked $1 billion in gross sales in 2008, up 20 Percent from the prior year. Tony Hsieh (pronounced Shay) helped start Zappos in 1999 as an online shoe store that has since expanded to a plethora of online goods with free shipping and free returns. Mr. Hsieh was recently interviewed by Max Chafkin of Inc. Magazine who he told he has decided to center his entire business around one thing: happiness. Other companies may spend their senior team meetings analyzing the productivity of their outsourced services or the complexity of their software code. Mr. Hsieh values making Zappos's employees and customers feel really good. He leads his operation from his space tucked into a row of cubicles in the middle of the office floor. Everything at Zappos focuses on the single outcome of happiness which is why the company continually scores high on lists of the best places to work.
This focus on happiness differs significantly from other employee-focused companies. Salaries at Zappos are often below market rates - the average hourly worker makes just over $23,000 a year. However, the company covers 100 percent of health care costs. Employees do not find perks often found at other large companies such as on-site childcare, tuition reimbursement, and a 401(k) match. Zappos does offer free food to its employees. Cold cuts for lunch can be found in their small cafeteria.
One might argue that Hsieh does not see money as what is important in life and that happiness is linked to the time available to enjoy experiences. A common practice of Mr. Hsieh's is asking everyone he meets what makes him or her happy. He also studies books on the subject. Managers at Zappos are encouraged to goof off with their employees. On personal side, Mr. Heish blasts a steady stream of light hearted Twitter messages to his 1.5 million followers. As CEO, Tony Hsieh is held in the same regard as iconic stars.
A Glass of Lemonade Please?
Still, there is little doubt that references to time and money in an attempt to influence consumers is commonplace in most of the worlds advertising campaigns. A survey of the recent issues of the New Yorker, Cosmopolitan, Money and Rolling Stone magazines revealed that out of a total of some 300 advertisements almost half employed a reference to time or money in their message.
In order to test the time versus money theory, Stanford University's Graduate School of Business created a series of experiments as reviewed in the recent issue of Journal of Consumer Research Vol. 36 article by Cassie Mogilner and Jennifer Aaker. The researchers started with setting up of a lemonade stand in a busy park one sunny afternoon. Three signs advertising the lemonade were designed and switched every ten minutes to randomly assign either a time, money or a control message (neither time nor money) to passers-by. The time condition sign read "Spend a little time and enjoy C & D's lemonade." The money condition sign read "Spend a little money and enjoy C & D's lemonade." And the control condition sign simply read "Enjoy C & D's lemonade."
The results showed that significantly more people (14% v 7%) purchased lemonade when they were exposed to the sign mentioning time compared to the sign mentioning money. There was no significant difference in the number of lemonade purchases made by those people who saw the money sign compared to those exposed to the control condition sign. The researchers also reported that those people who stopped to make purchases were representative of a range of ages (14 - 50 years old), gender (58% male v 42% female) and occupations. This suggests that people in general are more primed to make a purchase when they are influenced by time than money.
But what effect might that have on the perceived value of the product being purchased? In an interesting twist passers-by who purchased a cup of lemonade were told that they could pay anywhere between $1 and $3 for the lemonade but the exact amount they chose was up to them personally. Those customers exposed to the "spend a little time" sign not only bought twice as much lemonade, on average they paid more for it as well ($2.50 versus $1.38). Thus, the experimenters claim that mentioning time versus money in marketing materials and promotional campaigns can make a product not only more attractive but also more valued too. Why? Because the researchers felt that someone's experience of a product is likely to generate feelings of personal connection. Suggesting that consumers consider their time as a commodity could lead to more favorable attitudes and decisions.
A Download of Experiences
In an attempt to test the monetary value of time consumers were asked to complete surveys regarding the use of their iPod - a product of which a lot of people spend money and time. The results showed that iPod owners who were asked to think about the time they had invested in their iPod reported more favorable attitudes to it than the owners who were asked to think about the money they had invested due to their perception of a heightened personal connection and experiences with the product.
The lemonade and iPod experiments suggest that irrespective of the amount of money an individual might spend on a product, making references to time can influence people's perception of a product's attributes.
The researchers also found that when the products concerned are considered 'prestigious possessions' and your influence target is more 'materialistic', then making references to money rather than time should be more persuasive due to the fact that in this group the feeling of personal connection would more likely come from possession than experience.
One of the reasons that Zappos offers free shipping and free returns is that consumers save time not having to go to the store to buy shoes and other items while also not losing money if the size is wrong or they are unhappy with their purchase. The risk of losing money has been eliminated, leveling the playing field to retail stores. But with Zappos the consumer saves time.
So what is it about your business, product or service that can save time for consumers? What is it about your work culture that demonstrates to your employees that you value their time and their happiness? Can you implement something today that will make a difference? Start now!
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Mary Lee Gannon is the president of StartingOverNow.com - Transforming People and Organizations with Goals-to-Results. With more than 16 years of experience as a CEO of organizations with up to $26 million in assets, Mary Lee coaches executives and organizations with a Goals-Accountability-Results system. Read testimonials from her clients. She is a graduate of The Duquesne University Professional Coaching Program and an alumnus of the 2010 Harvard Medical School and McLean Hospital Coaching in Medicine & Leadership Conference. Her personal turnaround came as a stay-at-home mother with four children under seven-years-old who endured a divorce that took she and the children from the country club life to public assistance from where she rose to the level of CEO to support her family. Areas of Specialty: Strategic Planning / Board Development / Executive Coaching / Healthcare / Public Relations / Meeting Facilitation / Leadership / Productivity / Life/Career Transition. Her book "Starting Over - 25 Rules for When You've Bottomed Out" is available in bookstores and from online booksellers.
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