Dan Gilbert:  How to do Precisely the Right Thing

Dan Gilbert highlights estimating odds and how we value things.  I could not help but think about how many of the decision items discussed are actually applicable to the   Amway/Quixtar business.

The first item highlighted are errors in estimating odds.  Mr. Gilbert makes the assertion our ability to estimate odds is biased by what is most memorable.  What we believe to be most probable is what comes most quickly to mind.  However, what’s memorable is what stands out -not what is common.  He states that lottery ticket sales would fall dramatically if people saw testimonials of all the people that never won anything from the lottery.   So it is in the lottery's best interest to highlight and show the few winners.

Amway/Quixtar and their lines of sponsorship exploit this same weakness in people by constantly highlighting only the successful or supposed successful people in the business.    Quixtar uses this strategy extensively on their thisbinow.com website in their profiles section as well as the new pins sections in the  Amagram and Achieve magazines.   The lines of sponsorship further exploit this with their "Profiles of Success" book containing hundreds of diamonds.   Only in the fine print, with numbers in a fraction of a percent, do prospects see how infrequent the proclaimed success actually is.  Even unsuccessful people can be cloaked in the allure of success with the "fake it 'till you make it mentality".   This includes buying used older luxury cars to give the impression of success, or already successful people hosting meetings in their nice homes implying the money came from the Amway business.     Another strategy is bringing a wife home from work while aggressively cutting unneeded expenditures to make the allusion that the business replaced thewife's income.    Of course Amway/Quixtar does not go out of its way to highlight the people who fall out of qualification for a pin, the number of people who leave the business each year, or a survey of net profit earned from the business.  Too much realistic information would be bad for business.

Dan Gilbert also explains how the value of things change can change over time based upon the circumstances.    The value of something is always in context with something.  No doubt this explains why the majority people will willingly pay more for the products from the business while they are Quixtar distributors and then stop buying those same premium prices products after they no longer are in the business.    The value to buying the Quixtar products was not the products themselves, but the goal of achieving points and earning the recognition from their peers on stage.   A second motivation might also be to avoid a punishment of not being considered a leader anymore when your personal volume falls below the group's minimum level.  Many organizations link admission to leadership secessions to a minimum amount of personal volume, even though they might have helped to recruit a huge organization. 

The talk is about 50 minutes long and presents interesting insights into how people make decisions.