Neglecting the Immeasurable

It seems just about every week a news article highlights a company exploiting an opportunity to extract more money from their customers, while negatively impacting the customer.

A few examples come to mind:

• Selling loans to people who can’t afford them
• Offering insurance that doesn’t pay out when it’s needed most
• Charging naive customers exorbitant rates

At the same time, internet companies in particular are making these decisions all day:

• Choosing to use manipulative and addictive psychological tactics to take user attention
• Forcing users to interact with upsell popups by hiding the close button
• Exaggerating the features or benefits of a product to make the sale
• Forcing users to create an account to read a public blog post
• Hiding the pricing behind an email form
• Tricking users into sharing access to their contact list

I think most companies will say they choose what’s best for the customer over what earns the most revenue. After all, happy customers mean long term customers, they’re more likely to tell their friends about it etc.

But actions speak louder than words, so why do many companies consistently choose the quick-fix revenue hack over long-term user trust? If we set greed aside for a moment, in this post I want to argue that it often comes down to measurability and incentives within an organisation.

Blind measurement

Let’s imagine you need to make a decision. Option A costs metric X and improves metric Y, while Option B improves metric X and substantially costs metric Y. Assume that both X and Y are equally valuable.

Which one would you choose? Option A, obviously. Adding up the two metrics, it provides the most value overall, while Option B is a net negative. But let’s say metric Y is something very subjective, something hard (or impossible) to measure. Without that data available, which option would you choose?

Now the picture looks very different. Option B seems like the clear winner, and you even have the data to back up your choice! Nobody is going to raise an eyebrow, you’ve simply followed the data, and the data makes it clear. Forcing users through an upsell makes revenue go up a quarter of a percent, you collect your promotion, and everybody is happy. Except the user.

The underlying results didn’t change, we just had an incomplete picture of the truth. Having some data doesn’t necessarily mean you have the full picture.

Revenue is easily measurable, and every team that makes revenue tick up looks good to the bosses. Reporting revenue to the boss is easy - it’s a nice, readable, comparable number, but do teams also report they’ve achieved it by spending user trust? Taking shortcuts that make an individual team look good, but cost user trust in the product overall is known as a negative externality. It’s the same reason fossil fuels are “cheap” - they don’t take into account the immense damage they’re doing to the environment and the future costs of dealing with that damage. If the cost of that damage was factored in to the real price, we’d have been off fossil fuels decades ago.

Feels

In a corporate data oriented view of the world, there seems to be little room for the fact that customers are humans with emotions, intelligence, awareness, families, hopes and dreams. That these complexities are far more nuanced than simple numbers, and so they’re nearly always neglected in decision making. Make no mistake, just because they’re hard to measure doesn’t mean they have no effect.

Every small act that gives users the hint that someone is just after their cash is a loss of trust on their part, and rightly so. They’ve just received evidence that the entity cares more about their money than about their wellbeing. They may continue to be a customer, but their loss of trust will be reflected in the way they interact from that point on. When a competitor appears that doesn’t treat them like an ATM, they might not hang around for long (though I suspect the continued survival of this system has relied on the fact that competitors are all doing the same thing).

In many cases there may be no malicious intent, rather just the failure to value those things to which a number can’t be assigned. This seems to become especially common the larger an organisation gets, possibly because of the distribution of responsibility, the group think effect, or the increased reliance on statistical data over common sense. If everybody is doing it, and has data to back up their case, then you’re wrong not to do it.

Used cars or works of art

Some readers might at this point be saying “of course revenue comes first, a business wouldn’t survive without revenue!“. Yes this is true, but there’s something in that response that we should unpack. I’d argue that there’s a hidden assumption in there that creates an adversarial relationship with your customers. There’s an assumption that you can’t have revenue without treating it like the top priority. This leads to a mindset of extracting it from people, in contrast to offering something valuable to people first. While revenue is of course important for a business to survive, choosing revenue before customers makes it easy to accept anything that increases revenue, regardless of any negative impact on customers.

This can be illustrated with the contrast between a stereotypical used car dealer and a musician selling tickets to a show. In both cases, customers hand over some cash. But if the musician’s primary goal was to extract cash, they would likely never succeed as a musician. Of course, the musician still needs to be business savvy to make an income, but the primary goal of any good musician is to make great music, the income just helps them continue to do that. The primary goal of a used car dealer is to make the sale. As a customer, who do you trust more?

Pick one

So if you find yourself in this situation, you have a choice. Do you value the easy, quick fix, short-term revenue hacks, or do you instead factor in user trust and the longevity of your product? We need to take into account all the factors, and consider that many of them simply can’t be measured.

If you’ve considered the possibility and decided that no, revenue is more important than being good to your customers, there’s nothing stopping you. You at least owe it to your customers, staff and the public to be honest with your intention, so they can make up their own mind.