Signaling does not exist in the dichotomy that is good or bad.
Signaling can be both good and bad. Whether it’s good or bad entirely depends on context and meaning. And while it’s neither good nor bad, it is undeniably necessary.
Signaling is, as Rory Sutherland writes in Alchemy, the need to send reliable indications of commitment and intent, which can inspire confidence and trust. Signaling is a mechanism used by humans, birds, frogs, bees, and flowers to inspire trust and generate commitment.
Much has been made about the negative sides of signaling. The affluent New York finance employee driving a fancy red car to signal his wealth to potential mates comes to mind. Our mental model of signaling is skewed by always thinking of the negative extremes shown in Hollywood films.
While the negative examples easily come to our mind, there are plenty of positive examples that bear this out.
Have you ever had a pleasant customer service experience? Customer service is interesting because usually, you’ve already purchased the product. The company already got value from you, so what’s their motivation for now helping you solve the problem? You guessed it. Companies know that it’s cheaper to keep an existing customer than to acquire a new one, so they go above and beyond to keep and inspire additional trust and commitment in you towards them by helping you with your problem. Your repeat business is what they’re after, and they’ll help you with service and a smile to signal they’re worth it.
We’d do well to scale down our understanding of signaling to the everyday actions we take. As an example, let’s think about me making my wife coffee in the morning before we start our work days. By doing this, I’m signaling. But what am I signaling, exactly? Perhaps that I’m caring, able to provide for her, and attentive to her. Is that bad? Am I evil for having these subconscious motivations underpinning my actions? I think not.
Commitment and trust are two-way streets, and signaling helps people establish the roads to get there.
We must stop having a knee-jerk negative reaction to signaling. Signaling in and of itself is a false dichotomy. It’s neither inherently good nor bad. It just is, and its meaning depends on context.
Costliness and sacrifice are the prices of trust. Signaling is the mechanism we use to get there. Let’s not be afraid of signaling, and instead embrace it for the necessary part of our lives that it is.