Isegoria

The shelves are bare, because the toilet paper industry is split into two, largely separate markets, commercial and consumer:

Georgia-Pacific, a leading toilet paper manufacturer based in Atlanta, estimates that the average household will use 40% more toilet paper than usual if all of its members are staying home around the clock. That’s a huge leap in demand for a product whose supply chain is predicated on the assumption that demand is essentially constant. It’s one that won’t fully subside even when people stop hoarding or panic-buying.

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Talk to anyone in the industry, and they’ll tell you the toilet paper made for the commercial market is a fundamentally different product from the toilet paper you buy in the store. It comes in huge rolls, too big to fit on most home dispensers. The paper itself is thinner and more utilitarian. It comes individually wrapped and is shipped on huge pallets, rather than in brightly branded packs of six or 12.

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Because toilet paper is high volume but low value, the industry runs on extreme efficiency, with mills built to work at full capacity around the clock even in normal times. That works only because demand is typically so steady. If toilet paper manufacturers spend a bunch of money now to refocus on the retail channel, they’ll face the same problem in reverse once people head back to work again.

Other industries face similar challenges:

The CEO of a fruit and vegetable supplier told NPR’s Weekend Edition that schools and restaurants are canceling their banana orders, while grocery stores are selling out and want more. The problem is that the bananas he sells to schools and restaurants are “petite” and sold loose in boxes of 150, whereas grocery store bananas are larger and sold in bunches. Beer companies face a similar challenge converting commercial keg sales to retail cans and bottles.

Amazon is opening 100,000 new full and part-time positions across the U.S. in their fulfillment centers and delivery network:

We also know many people have been economically impacted as jobs in areas like hospitality, restaurants, and travel are lost or furloughed as part of this crisis. We want those people to know we welcome them on our teams until things return to normal and their past employer is able to bring them back.

In addition to the 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed. In the U.S., we will be adding an additional $2 USD per hour worked through April from our current rate of $15/hour or more, depending on the region, C$2 in Canada, £2 per hour in the UK, and approximately €2 per hour in many EU countries. This commitment to increased pay through the end of April represents an investment of over $350 million in increased compensation for hourly employees across the U.S., Europe, and Canada.

In The Catalyst Jonah Berger explains how to change anyone’s mind — reduce reactance, ease endowment, shrink distance, alleviate uncertainty, and find corroborating evidence:

For big changes, sometimes hearing from one person isn’t enough. You can follow up multiple times with new information, but the listener is still faced with a translation problem. Sure, you think something is the right course of action, but you’re just one person. How do they know what you’re saying is right?

There’s strength in numbers. That’s why substance-abuse counselors use group interventions. Hearing from multiple loved ones at the same time often provides enough proof to drive action. Corporate boards wait to adopt new practices until they’ve been adopted by several peer institutions. Doctors wait to adopt new drugs until multiple colleagues start using them. And companies wait to adopt supply chain technologies and management strategies until they’ve been piloted by a number of other firms.

In my own research, I found that the incidence of people signing up to use a new website was almost directly proportional to the number of Facebook invitations they received. Invites from two people led to almost double the sign-ups from a single invite; sign-ups were even more likely when multiple invites came in quick succession. As the adage goes, “if one person says you have a tail, you laugh and think they’re crazy. But if three people say it, you turn around to look.”

Whether you’re trying to convince a client, change an organization, disrupt a whole industry or just get someone to adopt a puppy, the same rules apply. It’s not about pushing harder or exerting more energy. It’s about reducing barriers to action. Once you understand that, you can change anything.

In The Catalyst Jonah Berger explains how to change anyone’s mind — reduce reactance, ease endowment, shrink distance, and alleviate uncertainty:

Change usually involves some level of risk. Will a new product be better than the old one? Will a new initiative really save money? Research published in the Quarterly Journal of Economics by three University of Chicago researchers in 2006 found that there is an “uncertainty tax.” People in the study were willing to pay $26 for a $50 gift certificate, but when they were asked how much they’d pay for a lottery ticket that would win them either that same $50 gift card or a $100 one, they were only willing to pay $16, a 40% drop. The uncertainty made them undervalue something that was objectively worth more.

To ease uncertainty, lower the barrier to trial. Don’t just tell people that something is better; allow them to experience it themselves. In the mid-2000s, people didn’t understand cloud storage and worried that it would be difficult to use or that they would lose their work. So Dropbox became part of a vanguard of app firms giving away a version of their service for free. The appetizer helped people to resolve their uncertainty and encouraged them to pay to upgrade to a better version. It helped Dropbox to build a billion-dollar business.

Honda Motor Co.’s Acura division took a similar step in 2008. The luxury brand wasn’t as trusted or well-known as its rivals, so Acura partnered with the high-end W Hotel chain to offer guests a free ride anywhere in town in an Acura. Guests might not have known about or liked Acura, but if they needed a ride somewhere, why not get one for free? The rides removed uncertainty and, according to the company, resulted in tens of thousands of new Acura buyers.

Uncertainty can also be reduced by making things reversible. A few years ago, my girlfriend and I were considering getting a dog. A local shelter had an adorable pit mix puppy, but we weren’t sure we were ready. Would we be home enough? Could we give her enough exercise? There were too many unanswered questions. We started to leave, but then a nice volunteer interjected: “In case it helps, we have a two-week trial period.” Today that girlfriend is my wife, and our dog Zoë is an integral part of our family. The trial didn’t reduce the upfront costs of taking Zoë home—food, shots, a crate, etc.—but it did remove the uncertainty.

Jonah Berger explains how to change anyone’s mind in his new book The Catalyst — reduce reactance, ease endowment, and shrink distance:

When new information comes in, people tend to compare it to their existing views to see if it is a close enough match to consider. Psychological experiments going back 50 years have found a “zone of acceptance,” an area close enough to people’s existing beliefs that they’ll consider new information. Incoming content that is too far away from their current perspective falls into a region of rejection and gets discounted.

Doctors deal with this issue when trying to get patients to change to healthier behavior. Sure, an overweight person should walk a mile every day, but for someone who hasn’t worked out in months, that’s a big ask. One solution is to start by asking for less or breaking the change down into chunks.

A doctor I spoke with a few years ago was dealing with an obese truck driver who drank three liters of Mountain Dew a day. She knew that telling him to quit cold turkey would fail, so she asked him to try just two liters a day. He grumbled but made the switch. Then, on the next visit, she asked him to cut it down to one liter a day, and only after that succeeded did she suggest cutting the soda out entirely. The trucker still drinks a can of Mountain Dew now and then, but he’s lost more than 25 pounds.

Product designers talk about such gradual shifts in behavior as stepping stones—a way to make a big shift feel less daunting. Uber’s initial model didn’t depend on persuading people to take a ride in a random stranger’s car. That’s exactly what Mom told you not to do. The company started instead by making high-end black-car service more accessible. Only after that gained acceptance did they move down-market to UberX, a cheaper nonluxury option. If Uber had asked people to make such a big change from the beginning, they probably would have failed. It was too far from what people were used to.

Jonah Berger explains how to change anyone’s mind in his new book The Catalyst, starting with the advice to reduce reactance and then moving on to his second piece of advice, ease endowment:

Research on everything from investment choices to political incumbency demonstrates that people are over-attached to the status quo, what social scientists call the “endowment effect.” We tend to stick with things we know and have used for a long time. Most of us eat the same food we’ve always eaten, buy the same brands we’ve always bought and donate to the same causes we’ve always supported.

Part of the challenge is that the status quo usually isn’t that bad, or else people would have made a change. An analogy can be made to injuries. Which do you think causes more pain: breaking a finger or spraining a finger? The answer might surprise you. It turns out that milder injuries may inflict greater pain overall, because unlike serious injuries, people are less likely to take active steps, such as surgery, to speed recovery. Milder injuries thus don’t get addressed and become nagging injuries that never quite go away.

Change agents combat this phenomenon by bringing the costs of inaction to the surface, helping people to realize that sticking with the status quo isn’t as cost-free as it seems. A financial adviser I know tried everything to convince one middle-aged client that keeping large amounts of money in a low-interest savings account instead of investing it more ambitiously for retirement wouldn’t benefit him in the long term. He liked things as they were and refused to see the upside of change. Finally, she started giving him regular updates on how much he was losing monthly compared with inflation and higher-return investments. That worked.

Similarly, IT consultants often resort to encouraging employees to upgrade to new machines by saying that they will no longer support the old ones, leaving employees to fix their own problems. The technique doesn’t force people to switch, but makes it easier for them to see the cost of doing nothing.

Jonah Berger explains how to change anyone’s mind, the subject of his new book The Catalyst, starting with the advice to reduce reactance:

People like to feel like they’re in control — in the drivers’ seat. When we try to get them to do something, they feel disempowered. Rather than feeling like they made the choice, they feel like we made it for them. So they say no or do something else, even when they might have originally been happy to go along. Psychologists call this negative response “reactance.”

Decades of consumer behavior research shows that people have an innate anti-persuasion radar. They’re constantly scanning the environment for attempts to influence them, and when they detect one, they deploy a set of countermeasures.

To avoid getting shot down, allow for agency. Guide the path but make sure people feel like they’re still in control. Smart consultants do this when presenting work to clients. If you share just one solution, the clients spend the meeting trying to poke holes in it. To shift this mind-set, good presenters often share multiple options. That way, rather than focusing on flaws, the clients focus on which option they prefer, which makes them much more likely to support moving forward.

Another way to reduce reactance is to highlight a gap between someone’s thoughts and actions, or between what they would recommend to others and what they themselves are doing. A clever pharmaceutical executive in one of my courses told me about a colleague who was wedded to a failing project. She asked him what he would recommend if someone at a different company was considering doing something similar. Given all the information we have now, he acknowledged, it wouldn’t make sense. Then why are we still doing it? she asked. The colleague shuttered the project a month later.

Highlighting such dissonance encourages people to try to resolve it. In the 1990s, researchers at the University of California campuses at Berkeley and Santa Cruz used this idea to get students to save water during a shortage. They asked some students to encourage their peers to take shorter showers, while completing a survey on what water-saving steps they themselves were taking. Then they timed the student volunteers’ showers. Exposing the gap between students’ attitudes and actions reduced their water use by more than 25%.

The 2010s were supposed to bring the ebook revolution, but it never quite arrived:

Instead, at the other end of the decade, ebook sales seem to have stabilized at around 20 percent of total book sales, with print sales making up the remaining 80 percent. “Five or 10 years ago,” says Andrew Albanese, a senior writer at trade magazine Publishers Weekly and the author of The Battle of $9.99, “you would have thought those numbers would have been reversed.”

And in part, Albanese tells Vox in a phone interview, that’s because the digital natives of Gen Z and the millennial generation have very little interest in buying ebooks. “They’re glued to their phones, they love social media, but when it comes to reading a book, they want John Green in print,” he says. The people who are actually buying ebooks? Mostly boomers. “Older readers are glued to their e-readers,” says Albanese. “They don’t have to go to the bookstore. They can make the font bigger. It’s convenient.”

Ebooks aren’t only selling less than everyone predicted they would at the beginning of the decade. They also cost more than everyone predicted they would — and consistently, they cost more than their print equivalents.

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Printing and binding and shipping — the costs that ebooks eliminated — accounted for only two dollars of the cost of a hardcover, publishers argued. So the ebook for a $20 hardcover book should cost no less than $18. And according to publishers, by setting the price of an ebook at $9.99, Amazon was training readers to undervalue books.

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Print books are generally sold under a wholesale model, which works like this: First, the publisher will set a suggested list price for a book; say, $20. Then it will sell the book to resellers and distributors for a discount off that suggested list price. So if Simon & Schuster wants to sell a $20 book to Amazon, Amazon might negotiate a discount of 40 percent for itself and end up paying Simon & Schuster only $12 for that book.

But once Amazon owns the book, it has the right to set whatever price it would like for consumers. The $20 list price that Simon & Schuster set was just a suggestion. Under the wholesale model, Amazon is free to decide to sell the book to readers for as little as a single dollar if it chooses to.

Until 2010, ebooks were sold through the wholesale model too. So if Simon & Schuster was publishing a $20 hardcover, they could choose to set a suggested list price of $18 for the ebook — two dollars less than the hardcover — and then sell that ebook to Amazon at a 40 percent discount for $10.80. And Amazon could, in turn, feel free to sell that ebook for $9.99 and swallow a loss of 81 cents.

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Apple was offering publishers an incentive to root for it over Amazon. With its App Store, Apple had established a resale model that worked differently from the wholesale model publishers were used to. It was called the agency model, and it worked like this: publishers would decide on what the list price for their book should be, and then put it up for sale at that price in the iBooks store. Apple would take a 30 percent commission on every sale.

Apple wasn’t willing to sell ebooks for $18, but it thought a cap of $14.99 was perfectly reasonable. And if publishers decided to go along with Apple’s plan, they could set a list price of $14.99 for an ebook and be sure that no one in the iBooks store would ever discount it without the publisher’s express permission. Apple, meanwhile, would pocket $4.50 from each sale.

But Apple couldn’t enter the ebook market while charging consumers five dollars more per unit than its biggest competitor was. It needed some assurance that no one would have a cheaper product than it had. So it made a deal with five of the Big Six publishers (Simon & Schuster, Penguin, HarperCollins, Hachette, and Macmillan; Random House, then the biggest trade publishing house, abstained): They could all sign on to Apple’s agency model, as long as they guaranteed that they’d also use that same agency model with every other retailer they worked with. That way, Amazon, too, would be forced to sell its ebooks for $14.99 — and if it refused, publishers could withhold their ebooks from Amazon and make them exclusive to Apple.

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“Amazon can still discount whatever they like on the print side,” explains Jane Friedman, a publishing consultant and the author of The Business of Being a Writer. On the ebook side, however, Amazon now lists publisher-mandated prices, often with the petulant italic addition “Price set by seller.” “So the market is very weird, and often the ebook costs more than the print,” Friedman says. “Sometimes it feels like Amazon is trying to make the publishers look ridiculous.”

I expected The Roman Guide to Slave Management to include more tips like this:

Gang labour makes slaves work faster, harder and better. You should form them into groups of about ten. This is a particularly easy number of men to keep watch over. Larger gangs can be difficult for an overseer to control on his own. So, on your estate, you should assign these groups to different sections of it, and the work should be distributed in such a way that the men will not be on their own or in pairs, since they cannot be supervised properly if they are scattered all over the place. The other problem with larger groups is that the individuals within the group will not feel that the work has anything to do with them personally. It all gets lost in the crowd.