Wired for 150

Primates have huge brains.  And one part of the brain, the neocortex, is remarkably larger in primates than in every other mammal.  The neocortex handles complex thought and reasoning.

The neocortex as a percent of total brain volume varies widely, even among primates.  For a while, it was thought that that was because some primates were just “smarter” than others, or the ones who had learned to use tools had developed that part of their brain.  It turns out that the proportionate size of the neocortex is most closely correlated with the number of other primates you know personally.

Robin Dunbar, an anthropologist and evolutionary biologist postulates that because managing relationships is an extremely complex skill, the larger the group you live in, the larger the neocortex you require.  Think about it – if you are in a group of 4, you have 6 relationships to keep track of: the 3 you have with the others, and the 3 they have with each other.  If you live in a group of 20, there are 190.  So Mr. Dunbar crunched some numbers, and it turned out he’s right – for 38 types of primates, there is a high degree of alignment between the “neocortex ratio” and the size of communities those species tended to form.

So what happens when you run the neocortex ratio on Homo sapiens?  You get 147.8, which is commonly rounded to 150 and called, “Dunbar’s Number.”  There are plenty of examples where this has proven out – the size of prehistoric villages and primitive, remote villages today.  The Hutterites religious sect splits its communities when they reach 150.  Gore Associates, the company that makes Gore-Tex, always builds a new plant when the employees in one get to 150.  None of these things happen because they read about the Dunbar Number, it just “feels” right.

Up to 150 people, you can know everyone in the group, and even have a pretty good idea about how each of them feels about the others.  Beyond that, it’s too much, so people develop smaller groups — they become literally divisive.

So, shoot for 150 regular customers when you plan your bar.  If you start to get more than that, either make the club more exclusive, or open another location.

58

Answer Your Clients Before They Ask

Derek’s comment on the post about some spam I received reminded me of my experience with the Bank of Montréal.

I have been a BMO customer since I was a boy.  I still remember going into the grey stone edifice in downtown Fredericton and having the teller write (!) the new balance in my bank book.  In the years since, Cindy and I have had savings accounts, chequing accounts, car loans, RRSP (retirement savings) loans, investments, securities trading accounts, and mortgages with them.  We have been relatively happy with them most of the time.

At one point, about 10 years ago, we got to the point where we thought we should start using a financial advisor.  We met a very nice lady who agreed to look after our retirement planning, so I withdrew all the RRSP investments we had with BMO and transferred them over to her control.  The very next day, a stranger from BMO called me and introduced himself as my “personal banking representative.”  He asked me why I had taken all my RRSP business from the Bank.  “Because,” I replied, “this is the first time, in 27 years of being a customer, that anyone from the Bank of Montréal has ever called me.”

It’s easy to forget to take care of your non-complaining  customers, but it sure makes sense to pay some attention to them – especially if you believe the oft-cited figure that it’s 7 times more expensive to sell to stranger than it is to existing clients.