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Home / Economics  /
The Friend And Fan Divide
Friends fans

You're one or the other, but usually not both


Imagine you're privy to a special deal most people don't know about or have access to -- say a coupon to dine at an elite restaurant for a group discount.  The cost of a set menu, purchased on the premises as a walk-in, is $100/person. The special deal entitles the buyer to purchase tickets, in advance, for two set menus at a total cost of $200 and get two others in to dine for free.

We'll say this restaurant is well known and highly regarded. Even at normal prices, you'd have no problem whatsoever asking three friends or acquaintances along and getting them to accept. That is to say, you know for a fact most anyone is willing to pay the $100 set menu asking price.    

We'll leave you with two options. The first: you tell the other three about your special deal of buy two, get two free. Everyone does the math and divides in four the $200 expenditure.  You collect the $50 from the other three, add $50 of your own, and pick up the four tickets in advance. In this scenario, you reap the same rewards as everyone else in your dining party, which is the $50 savings.  Perhaps you get some nods of approval from the other three, perhaps not. 

The second option: you still tell the other three you're in possession of a deal, but you state it's buy three, get the fourth in free.  Now the cost is $300, which everyone divides by four to arrive at a figure of $75/person. The other three advance you their shares of $75 apiece -- $225.  They're all unaware you can really buy two, get two in free, so you only pay $200 to the venue for four meal tickets. In the second scenario, your rewards are different from the other three. You get in for no cost plus pocket $25 while the others each save $25. 

The question: do you consider the second scenario fair? Is there something morally reprehensible profiting off people you know, despite the fact you're still delivering them measurable value? 

My wife considered the second scenario wrong.  She felt that by presenting the deal slightly askew, as outlined, she was enriching herself at the expense of her friends or acquaintances.  Okay, let's assume you don't skew any of the facts; you don't tell anyone it's a buy three, get one free deal when it's really buy two, get two free. You just tell all the other parties that a contact of yours can get everyone 25% off the restaurant's set menu if the tickets are purchased in advance. 

From the perspective of the other three, it really shouldn't matter how they get the discount just as long as they get it and value it. Yet in studies and from my personal experience, it DOES matter.  If the other three are strangers who responded to a Craig's List type of ad to score the 25% discount, they won't much care if you're being enriched as long as the 25% savings is a good enough inducement. However, if the three have some kind of friendship relationship with you, they'll be resentful you profited off them even if they, too, have been enriched. 

On another of my web sites, I sell a chelation product. At one time to get feedback, I offered a few bottles to a friend for an insanely fair trade. I swapped him two bottles of my product, which I can retail for $80, for four of his all-natural crystal stick deodorants.  Those deodorants might retail, at most, for $5/apiece or $20 in total.   Even if you just account for my costs, he was still getting the better end of the deal. As I said, I made the swap to get him to use the product so he could tell me if he felt better afterwards. If I'd given the product to him for free, he would have valued it as $0 and probably not regularly used it.  After he ran out, he wanted to know my cost for the product and pay me exactly that, not a penny more, to resupply him. If I had an endless supply sitting in my back cupboard, maybe I would have been charitable and done so. Since I didn't and would have to import bottles just for his use, I didn't bother. I'm not in business to supply him at cost. 

The irony is that someone I don't even know who comes across the product on his own is willing to pay FULL price. A friend, who you would think wants me to succeed, who should feel better that his money is going to a friend rather than a total stranger, in some way resents the fact he's being profited off of. 

I'm not saying that friends shouldn't be granted special prices. In the example above with the four tickets, the other three got 25% off. As good as a deal as that is, some, maybe all, would bear resentment if they knew the fourth person engineering the deal got in free and made a bit of money on the side. But why?  Let's say you're friendly with someone who owns a home stereo store and he offers you a 25% discount on a brand new stereo system.  You've checked online, you've checked with other merchants,  and the price he's willing to sell you the stereo system for really represents a 25% savings and is a better deal than you can secure anywhere else.  Should you be pissed at him because he's not selling the stereo to you for his cost but still making some kind of undisclosed profit? Is it his obligation to sell you the stereo for his cost because he knows you?

Your attitude towards the dealmaker probably says more about your attitude towards money and successful people than it does about the alleged scruples of the dealmaker "screwing" you. A survey conducted at the Harvard School of Public Health in February 1995 asked if the respondents preferred an annual income of $50,000 while others earned $25,000. Or an income of $100,000 while others earned $200,000.  Purchasing power was assumed to be the same for both cases -- $100,000 in income would always buy you twice what $50,000 could, regardless of what your peers were earning. About half the respondents chose the lesser number. They were content with a high relative income.  Their focus was more on their peers not doing better than they were rather than doing better themselves. 

I mulled over the tickets dilemma question in my own mind. An entrepreneurial attitude is one with no guilt attached from making money off others, whoever they are, as long as you're providing more than commensurate value in return.  I see nothing wrong with profiting off people you know when they're also receiving a benefit.  That's called good business.  All the same, there are people I would not be willing to profit from.  I would not distort the terms of a deal to profit myself if, say, my father, brother, or wife were involved, and this isn't just because they're family. I can think of other family members like cousins or uncles whom I'd have no problem offering 25% savings as I profited and got a free ticket. 

It all comes down to an individual's attitude towards my success. 

Imagine I write a book and put it up on Amazon for a sale price of $10. I e-mail everyone on my network list a brief message telling them about it and asking them to buy a copy and write a review for it. Amazon's sales rank algorithms take into account whether a book is purchased on their site, whether customers pay full price, and how many reviews a book has. I can already envision that my wife, my brother, and my father would go to Amazon without hesitation, pay full price, and write me a golden review I may not even deserve despite the fact that each is someone I would gladly gift a free copy to.  I can also think of a number of friends who would silently bitch about having to pay full price and opt not to pay.  They might offer to pay half price or nothing at all but still write the review on Amazon. Or I might have to remind them three or four times to do it, and eventually, they'd feel they were out of excuses and buy a copy … unwillingly.

There you have in a nutshell the difference between friends and fans. A friend or family member could be a fan, but most of the time they are not.  A fan appreciates what you're doing and buys for the value you provide them.  In the above example, I cite my wife, father, and brother as willing supporters, which they definitely are, but I don't categorize any as fans. They'd buy to assist me in my success, not because they would necessarily value for themselves what it was I was selling. And this is why books, blogs, and products don't succeed simply because your immediate friends and family passively support what you're doing and tell their own friends.  Well intentioned support isn't the same as appreciated value. A product/video/picture won't go viral unless the user receives some value from it. 

For a project to take off, you need fans, and these fans are, with little doubt, going to be people you don't know when you start out. Fans don't have preconceived biases about you. They don't read your book or blog thinking about your shortcomings.  If you're the CEO and standing on stage delivering a keynote, fans see you as the CEO first. Your friends and family see you first in terms of their relationship to you. 

And here's another irony. Anyone willing to support me in my endeavors without needing their arms twisted (i.e. a fan most of the time, but sometimes a close friend or family member) is exactly the type of person I would not want to excessively profit from on any tickets.  Yet these same people are the ones who would see no problem with me benefitting off of them. I have a fan in Australia who has generously mailed me a number of chocolate parcels, all at his expense, for me to review at the Chocolate Republic. I insisted he didn't have to but he insisted back that he wanted to. When I actually did write a book and wanted feedback, I offered to send him the book for free. He refused and sent me the full purchase price. Fans value your work " meaning you're providing measurable value to them at a fair price " so they want to pay you for it. 

My brother, a vegetarian, was dining at a tapas restaurant in Puerto Vallarta, Mexico for the first time several years ago and was told by the staff that a number of the dishes which were seemingly vegetarian actually were not. He proceeded to write a review of that restaurant to bring this fact to the attention of other vegetarians eating in Puerto Vallarta. The owner saw this review and commented on it. A good share of his items were vegetarian, he countered.  He invited my brother down to his kitchen to watch his chefs prepare them.  My brother was there for hours, watching the chefs go through 85% of the menu's vegetarian items and eating them at no charge. Ordered off menu, this food would amount to almost $100.  My brother has continued to patronize the place every year he's gone down since.  He's now a fan.  The restaurateur observes that loyalty and always gifts him free drinks, appetizers, and loaves of bread to go. My brother feels guilty taking things for free and tries to order the lowest cost items.  You see, a fan WANTS to pay. A fan WANTS to be financially supportive.         

When you're the boss, there's a fine line you must tread between being a person subordinates respect/defer to and being a person they like. There's this concept that as a boss, you can't be too friendly with your juniors. If they start seeing you as a peer, they won't/can't treat you like a superior, This is why, in the military, ranking generals don't fraternize with sergeants.   

And why friends and fans don't really mix.  Friends know your deepest and darkest secrets. They accept you for various reasons. It could be your personality, the good times they have when they're around you, the deep conversations, the shared past.  Many would have no specific ideas what you to do to earn money, much less care, and would be that much less interested if you were trying to earn money off them.

Fans don't need to know about your past in depth, at least not in un-edited form. They only care about your past inasmuch as it's shaped you to be the person you presently are, providing them with the wonderful XYZ they're willing to pay you real money for.  Fans don't need to know about your painful fight with alcoholism (unless you think making that knowledge public to them will hold you to a course of abstinence or help them, too) or the fact you slept with your wife's sister (unless this is part of your persona they're buying into as a fan).   

Hence, why a fan relationship turned into an intimate one rarely works. A fan admires you for certain traits/talents you possess.  There is always an arm's length distance between you and them. Once they get invited into the inner circle and are privy to everything, how can they continue to remain the fans they once were?  I've never seen a workable formula that fan respect amplified with intimacy equals an ideal union. My wife values me in ways a most devoted fan never could without it starting to look like stalking. 

The existence of three distinct categories (friends, fans, and caring family members) makes for three very different but identical meals.  Treat three caring family members to the elite restaurant with your 50% coupon in tow. Your family members don't need to know about the discount.  They'll be touched regardless.  Accompany three fans to the same place and give them 25% off. They'll be thrilled to have been asked to dine with you, even at full price, and doubly thrilled to get a deal. As for your friends, the type who'd be resentful if you dare profit off them: recommend the restaurant and let them go on their own at full price.  

Bon appetit!

If you liked reading this, consider:
 The Survival Of The Unfittest
 Are You Really As Old As You Feel?
 The Complete Article Index