6 Basic Commercial Insights

These are just a few quick notes and insights about business' and behaviors, based on everyday observations and some professional experiences. Nothing ground-breaking at all, just some simple patterns about how people make decisions, how businesses succeed, and how small changes can sometimes have a big impact.

1. Value Exists in Perception

The true value of a product or service often lies in the perception it creates, rather than its physical attributes. When Sidney Frank launched Grey Goose vodka, he understood that vodka itself is a largely indistinguishable product from others. After all, vodka is vodka at the end of the day. To make it stand out, he positioned it as a premium offering, pricing it higher than competitors and emphasizing its French heritage. Customers associated the elegant bottle and high price with luxury and exclusivity. Grey Goose became a symbol of sophistication, even though its taste was not superior.

Similarly, Apple’s iPhones have become far more than just smartphones. While competitors might match or even exceed Apple’s technical specifications, owning an iPhone signifies innovation, style, and social status. Apple has built a perception of exclusivity and creativity that transcends the product itself.

This insight is transformative.

Businesses are not just selling products; they are selling identity, aspirations, and meaning. The implication is that companies must invest in storytelling and branding that align with what their customers value most deeply. People do not just pay for what a product does, they pay for what it represents in their lives. The purchases and decisions you make every day is telling a story about yourself to others. The most successful brands both know and leverage this.

2. Making Small Changes Matter

Incremental changes can create dramatic results when they align with how customers think and behave. Amazon’s "frequently bought together" feature is a perfect example. By suggesting complementary products at the point of purchase, Amazon has increased its average order value. It achieves this without pressuring the customer, instead offering a seamless convenience.

Ride-sharing companies like Uber- and Bolt’s live tracking map is another example. The feature does not actually reduce waiting time, but by making the progress visible, it eases anxiety and makes the wait feel shorter.

Even subtle changes in language can have a profound effect. A hotel increased towel reuse rates by replacing the phrase "Save the environment" with "Join your fellow guests in saving the environment." This small shift leveraged the power of social proof, making people more likely to participate when they believed others were already doing the same. Of course it's also convenient for the hotels since they don't need to clean as many rooms on a daily basis (i.e saving on personnel costs) as well as not needing to wash as many towels and sheets, and thus saving operational costs.

The takeaway here is that small, well-placed adjustments can transform customer experiences. Instead of seeking large-scale overhauls, businesses can focus on micro-moments in the customer journey where subtle nudges can create significant positive business impacts.

3. Reframing Problems

The way a problem is defined often determines the range of solutions considered.

United Airlines, for example, addressed complaints about delays not primarily by acknowledging the issue but by partnering with SpaceX’s Starlink to provide free, high-speed internet on all its planes. This shift transformed a previous frustration into a new competitive advantage, reframing the flight experience as productive and enjoyable rather than just a means of travel. Passengers became more satisfied, not because the airplanes were faster, but because the experience was better.

Netflix also approached a common customer pain point (yes, the annoying buffering) by reframing the problem. Instead of focusing solely on improving internet speed, they introduced features like preloading and offline viewing. This turned a technological frustration into a feature that customers valued and appreciated.

The key insight is that innovation and improving the customer experience often arise not from directly solving a problem, but from redefining it. By asking deeper questions about what customers truly value, businesses can find solutions that are more creative and effective than simply addressing the surface-level issue.

4. Emotion Drives Decisions

When studying economics and finance, I noticed a common assumption in many theoretical models: that people are rational decision-makers. While this idea works in abstract calculations, it often fails to reflect how decisions are made in real life. Emotions such as loyalty, impulses, familiarity, and fear frequently influence choices far more than logic. Perfect rationality would require constant, purely monetary calculations for every decision, which is simply not how people operate in day-to-day life.

This assumption also implies that all value or utility for a person can be judged purely in terms of money or its derivatives. These derivatives include practical measures like time savings, cost efficiency, or measurable gains in utility per unit of expenditure, which are often used in economic models. For instance, someone might choose the fastest delivery option, assuming that the time saved equates to a monetary value, or opt to buy in bulk to lower the cost per unit, treating spending minimization as the primary goal. Similarly, they might prefer a no-frills flight over a more expensive one with better amenities, believing that lower costs automatically maximize utility. While these calculations are useful for modeling behavior, they overlook a key flaw: humans do not like to calculate every decision they make. Day-to-day life involves countless small decisions, and most of these are made emotionally, not rationally. People do not weigh time savings, costs, or utility gains for every choice because the mental effort required would be overwhelming. Instead, decisions are often driven by trust, familiarity, or how something makes them feel. Rational calculations tend to be reserved for life’s biggest decisions, such as buying a home or choosing a career path. For example, someone may choose a slightly slower delivery option because they trust the company offering it, or they might select a higher-cost product because it aligns with their values or brings them a sense of joy. These choices defy purely rational economic assumptions but make perfect sense when viewed through the lens of human emotion.

A great example of emotions driving decisions is Coca-Cola’s "Share a Coke" campaign. By replacing its logo with popular names, Coca-Cola created a personal and emotional connection with its customers. Buying a Coke became more than just purchasing a soda. It became an opportunity to share a meaningful moment with someone, transforming a simple product into a way to create joy and connection.

Similarly, Procter & Gamble’s "Thank You, Mom" Olympic campaign highlighted the emotional journeys of athletes and their families. These ads celebrated the role of mothers in supporting their children’s dreams, evoking feelings of pride, gratitude, and love. The campaigns didn’t focus on specific P&G products but instead built an emotional connection with their audience, associating the brand with moments of care and inspiration.

The key insight here is that customers don’t just buy products or services. They buy the feelings that come with them. Joy, belonging, pride, and security often outweigh purely logical factors in decision-making. For businesses, understanding and appealing to these emotional triggers can transform customer relationships. Brands that successfully tap into these emotions can elevate their appeal from being merely transactional to deeply meaningful, fostering loyalty and significantly increasing recurring purchases.

5. The Short-Lived Nature of FOMO and Hype

Supreme’s rise in the mid-2010s exemplifies how scarcity can generate FOMO (Fear of missing out), which in turn drives hype, thus generating more scarcity, creating a self-sustaining cycle. By releasing limited-edition products in small drops, Supreme engineered artificial scarcity that made every item feel rare and desirable. This scarcity fueled the fear of missing out, especially among teenagers, the brand’s primary audience, who were driven by the pursuit of social status. The hype around each drop amplified the scarcity, as long lines outside stores and instant sellouts became proof of the brand’s exclusivity.

This cycle fed itself relentlessly. The scarcity drove FOMO, which created hype, which further reinforced the perception of scarcity. Products like the Supreme-branded MetroCard, a standard New York City subway ticket sold for $5.50, became absurd symbols of status. Despite having no functional difference from a regular subway card, owning one signaled participation in a cultural phenomenon.

Similarly, the Supreme Oreos, a pack of three red-colored cookies stamped with the logo, were sold for $8 and quickly became a collector’s item. The resale market turned the absurdity into another level, with Oreos reselling for hundreds of dollars at certain times, showcasing the power of hype to elevate even the most basic items.

While this strategy was effective in creating short-term demand, it was inherently unsustainable. Supreme’s reliance on scarcity and FOMO exploited young, impressionable consumers, encouraging wasteful spending on items with little intrinsic value. The brand’s success was tied to the constant need to maintain novelty and cultural relevance. Once trends shifted and newer brands emerged, the self-sustaining cycle broke, and Supreme’s hype began to fade and eventually completely disappear, as expected.

Supreme’s story highlights the power of scarcity and FOMO to generate explosive demand but also exposes the fragility of such strategies. Brands that rely solely on this approach risk alienating their audience and becoming irrelevant once the cycle ends. Sustainable success requires more than hype; it demands long-term value, trust, and authentic connections with consumers. Without these, the pursuit of social status can only carry a brand so far.

6. The Wisdom of the Crowd

People often rely on others’ experiences to guide their decisions, especially when visiting unfamiliar places. Platforms like TripAdvisor and Google Maps excel at leveraging social proof. A restaurant with hundreds of positive reviews on Google Maps or a highly rated hotel on TripAdvisor instantly feels more trustworthy than one with few reviews, even if the offerings are similar. These user-generated opinions help customers feel confident and reduce the risk of making a bad choice.

For example, diners frequently use Google Maps to find the best-rated restaurants in a new city, while travellers rely on TripAdvisor to select accommodations based on detailed reviews and photos. These platforms transform customer feedback into a powerful tool for trust-building and decision-making.

Businesses can learn from this by actively encouraging and showcasing customer reviews on platforms like Google Maps and TripAdvisor. Responding to feedback, both positive and negative, demonstrates engagement and builds credibility. Social proof not only validates a business’s quality but also serves as a compelling reason for new customers to choose it with confidence. Seeing that others trust a product or service makes new customers more likely to follow suit.

By J