PartnerHacker Weekend 5/7: The Handicap Principle

New this week

A quick recap of the PH daily from this week:

Signal theory

Ever heard of The Handicap Principle?

It's an idea in evolutionary biology (and the title of a fascinating book) that organisms communicate to others that they are worthy mates by using costly signals - handicaps.

Massive feathers that require tons of resources to maintain, make it hard to maneuver, and present an easier target for predators are costly. A bird who has them and is still alive is signaling that they are so fit they can survive despite this burden.

It's kind of like rich dudes throwing stacks of money in the club - a wasteful behavior that signals how much they have to spare and, ostensibly, their,

Brand is like this.

It used to be all about a company's physical presence.

Banks used to put in marble floors and gilded fixtures. Not because those help them manage money any better. Because back in the day, 'Wildcat Banks' occasionally ran off with deposits. A bank that was willing to sink all that money into a fancy building made of hard to move materials signaled that they weren't likely to up and vanish with your funds.

Then it moved to other, less physical ways of costly signaling.

TV commercials with celebrities don't work because viewers think Michael Jordan is an expert on batteries. They work because consumers intuit that any company willing to pay Michael Jordan's fees is a company that believes their product can win.

In other words, costly signals build trust.

Like rites of initiation, they show your market that you are invested.

When you put time and money into branding, your customers feel more confident in their ability to trust you. They see that you've engaged in costly signaling, and they appreciate it.

It could be nothing more than great design and copy.

It could be a big campaign.

It could be a partnership with a household name.

Whatever signals work for your market, take them seriously. It can be hard to measure and nail down the precise ROI of brand plays.

In fact, that's part of the point. That's what makes a good signal - the fact that it's hard for a mercenary to game.

Sometimes you have to place a bet on your values, your community, and your ecosystem. Show them you're invested, even if you can't fully prove the return. Just like a good friendship.

We value you!

Give us some feedback. We're real people who read and respond!

You've successfully subscribed to PartnerHacker
Great! Next, complete checkout to get full access to all premium content.
Error! Could not sign up. invalid link.
Welcome back! You've successfully signed in.
Error! Could not sign in. Please try again.
Success! Your account is fully activated, you now have access to all content.
Error! Stripe checkout failed.
Success! Your billing info is updated.
Error! Billing info update failed.