The year was 1994, Friends was invading tv screens everywhere while Forrest Gump and The Lion King were making millions at the box office, most importantly I was 18 and looking for a new job.
My friend had encouraged me to apply for a job at a retail box store in Fresno and on the surface this looked like a great opportunity. After I applied, I was invited for an interview and finally someone from HR handed me what looked like a test. She explained “This is a morality test. Just answer each question truthfully. We will contact you the following day with the results.”
I knew in my heart that this would be an easy test, as I was a humble sheltered kid raised in the country. The idea of doing anything immoral was repulsive to me. I opened the booklet and dove in:
Test: “If you caught a fellow employee stealing a pair of jeans, would you report them to your manager? (Circle Yes or No)”
I circled yes of course.
Test: “If you caught a fellow employee stealing an ink pen, would you report them to your manager? (Circle Yes or No)” – I circled No – People walk away with pens all time and at least for myself it was always an accident.
Test: “If you just realized that you shortchanged a customer $5, would you chase them down?” – YES
Test: “If you just realized that you shortchanged a customer $0.05, would you chase them down?” – No, of course not.
I went home, sitting and waiting by the phone to learn the results of the morality test (this was before the internet & smartphones after all) and as expected, the HR team member called me the next day but my enthusiasm was deflated
“I’m sorry but we cannot offer you the position due to the results we found in your morality test.”
I failed the morality test!?!
I was crushed and quickly called my friend. “How did you pass?” I asked.
“Oh, you can’t tell the truth on those things, you should only provide the answer they want to hear.”
I then had an epiphany about the unintended consequences of the morality test. It was in this moment I realized that this test is not helping the store hire honest people and instead leading them to hire a bunch of liars!
Similar to this, we find unintended consequences in sales strategies all the time, especially with discounts and coupons. Putting a deal in your sales strategy often creates a short term increase, but at what cost?
- Are you insulting your value (best) customers?
- Are you attracting price-only customers?
- Are you shifting future buyers into the current period and killing future full-margin sales?
- Are you training your customers to delay future purchases waiting for the next deal?
We recently worked with a client that is coupon-centric and as a test they removed all the coupons from the market. The short term impact was a drop in sales. In the longer term margins went up and the volume metric went down. At the end of test the client was more profitable with lower unit volume. So the client was making more and doing less but could not stop focusing on the volume loss and went back to their comfort zone of coupons. We recommended that they stay the course.
Customers that come to your business for a pricing deal or discount will leave for the same reason. Also, if a competitor reacts to your deal this strategy can creates a pricing death spiral and pricing advantage is the most fleeting of all. So be careful when you pull the pin on this strategy.
In reflecting on this story, I did some searching and found an online quiz that had some similarities to the assessment I took so many years ago.