SUBSCRIPTIONS: THE HOTEL CALIFORNIA OF BUSINESS TRANSACTIONS
Thought Sparks
Rita Mcgrath
As colleague Eric Johnson has pointed out, the decision architecture – how we are brought through the decision process – has a huge impact on the decisions that are ultimately made. But, knowing that, unscrupulous or manipulative choice architects can structure decisions in a way that doesn’t favor you and lines their own pockets.
Rita McGrath ThoughtSparks
Human brains are a funny thing, as Kahnemann and Tversky researched years ago. We have what you can think of as two systems going on in our brains – one is fast thinking. That’s our normal default. Thinking quickly makes sense when the choice is routine, the consequences are minimal and the decision is reversible. But for situations where those rules don’t apply, we need what they call System 2 thinking, or slow thinking. These are for situations involving high uncertainty, big commitments and where the results are irreversible. You can see what this means by watching my Friday Fireside Chat with Danish geographer Bent Flyvbjerg.
Rita McGrath ThoughtSparks
You can check out any time you like but you can never leave
How they make it hard
Why this works is that these companies know we’re likely to check something out if it is easy and likely to avoid doing it if it is hard. So they throw obstacles in the way.
Some require you to call a call center to cancel, where staff then try to upsell you (looking at you, most cable companies). Some won’t even answer the phone and have their staff call you at weird unscheduled times (my experience trying to cancel a Microsoft Azure subscription someone else had opened for me). Some don’t even provide a phone number! And of course there is the transferring you from one person to another to accomplish something you would think should be easy.
Rita McGrath
Thought Sparks
But all that may be about to change
The Federal Trade Commission is considering new regulations that would level the sign up versus cancel playing field. Called “click to cancel,” the idea is that it should be as easy to extract yourself from a subscription you no longer want as it was to sign up for it in the first place.
It’s part of the FTC’s “Negative Option Rule.” Basically the FTC is saying that companies can’t assume a customers’ silence means consent to buy something or to continue paying for something. As their brief on the subject says, “Negative option marketing generally falls into four categories: prenotification plans, continuity plans, automatic renewals, and free trial (i.e., free-to-pay or nominal-fee-topay) conversion offers.”
Rita McGrath
Thought Sparks
Dark Patterns may be next
As I’ve written elsewhere, bad actors can also create what are called “dark patterns” in which they use their understanding of our psychology to manipulate us into taking an action that is counter to our own best interests.
Now that the FTC is tackling the difficulty of cancellation, perhaps they will turn their attention to other dark patterns that do consumers harm.
Rita McGrath
Thought Sparks
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