Yale School of Management

Posts by Consumer Insights

The Myth of Win-Win

August 26, 2014
hand putting coins into another hand
“We allow people to make huge profits doing any number of things that will hurt the poor, but we want to crucify anyone who wants to make money helping them.” These are the words of Dan Pallotta, an entrepreneur who, until the early 2000s, ran a company that organized charity fundraisers. In 2002, the company netted $81 million for charity—a figure equivalent to about half the annual giving of The Rockefeller Foundation. But it was based on a for-profit model, and it compensated as such, with Pallotta himself earning about $400,000 per year. When word of his salary got out, he came under intense criticism. “Shame on Pallotta,” concluded one critic. But why? “Want to make a million selling violent video games to kids? Go for it,” Pallotta is quoted as saying in a 2008 New York Times column by Nicholas Kristof. “Want to make a million helping cure kids of cancer? You’re labeled a parasite.” Continue reading “The Myth of Win-Win”

The Subtlety of Optimizing Sales

April 2, 2014
carrot on a string
If a sales agent gets paid the same amount of money, does it really matter whether he gets paid quarterly or annually? Will different incentive schemes with a similar final payoff elicit different levels of performance?  Though logic says no, new research on sales compensation found that the design of incentive schemes does matter. Agents work harder under some salary structures than they will under others. The fact is that the way in which money is paid out motivates people in different ways. Continue reading “The Subtlety of Optimizing Sales”

Resolving the Customer Management Dilemma

January 19, 2014
maid cleaning hotel room
This is the story of a customer who purchases a more expensive airline ticket to collect miles for his future vacation. It is the story of the 30-percent-off coupon that arrives in the mailbox of a well-shod fashionista, sent by the nearby boutique she frequents. It is the story of that free cup of coffee offered in response to the ten you’ve already purchased. Continue reading “Resolving the Customer Management Dilemma”