Why Greece Said No
Yesterday, Greek citizens voted to reject the proposed EU bailout.
Many people are feeling astonished by the decision. How could they do such a thing? This is simply inconceivable!
From a marketing perspective, however, the outcome isn’t a surprise.
Greek voters had a choice: they could vote to accept the offer on the table or reject it. The proposed deal wasn’t particularly attractive. It involved continued austerity; the heart of the plan was a series of cuts in pensions and spending.
The benefit of the plan was–well, what was it? Why would people vote for it? Perhaps the most compelling benefit was that the plan provided stability and continuity. Given how things are going in Greece, though, continuity isn’t appealing.
Rejecting the deal was far more attractive, primarily because it was uncertain. What would happen? Nobody could say. Would rejecting the deal mean Greece would leave the EU? That wasn’t and isn’t clear. Would saying no involve more sacrifice? That wasn’t and isn’t clear. In three years, would Greece be more economically successful if it took the proposed deal or rejected it? Once again, that wasn’t and isn’t clear.
Greek voters had to choose between two options, and one was uncertain and the other was unattractive.
This is a bit like the game show “Let’s Make a Deal.” On the show, people are offered a series of alternatives and they have to choose one over the other. In many cases, the decisions are difficult. Would you like this small box or the large one? How about $1,000 or the large box? The Greeks didn’t have a tough choice. They were picking between a pile of dead worms and a box. Which would you choose?
The problem facing everyone involved in the Greece situation is that the future is so unclear. Until someone lays out two credible scenarios, people will continue to choose the uncertain option, even if in the long run that is a misguided and scary choice.
Fascinating, and it makes sense. If what is certain is really bad, why not risk uncertainty?We’re all gamblers at heart, we just don’t act on it very often.
Hi Tim,
You bring up two interesting thoughts:
1) Does it mean that the opposition did a bad Marketing job of not being able to differentiate their offering. They would have probably been one example where outlining the negatives of the other alternative would have been a better strategy than trying to sell your strategy.
I remember you had shared an example in your class, where you mentioned why negative campaigning in politics might not be a good idea.
2) The second point – I always thought humans have a tendency to accept a know devil than an unknown ambiguous situation.
Rahul–My sense is that people will sacrifice if there is a better future ahead. The problem is that many in Greece don’t seem to see things getting better with the current austerity approach. In that case, uncertainty has a certain appeal. This means Greece is likely to leave the EU.