Tension and release: balancing revenue and CX

W

It’s a wonderful word to describe an awful experience. Any designer should be familiar with the concept, because it’s all around us.

We often see it in action when a brand reaches a point of network capture – when it’s built a huge customer base and has won in its market category. The brand starts by delivering a superb customer experience, so naturally, everyone uses its product or service. At that point, the commercial side of the business comes in and says: we need to prioritise revenue extraction – which de-prioritises the customer experience.

We don’t have to look far for examples: Uber is a classic of the genre. With huge amounts of VC money behind it, Uber effectively ran at a loss to get market capture, using a superb customer experience to kill the competition, i.e. taxis. And when it had done that, enshittification set in. This was a combination of many different wilful experience decay techniques like surge pricing or reducing the drivers’ compensation so it could start recouping that money.

So what?

What’s the net result of this experience degradation? Many people might say: almost nothing. In the short term, deciding to decay the customer experience can feel like it has no consequences. That’s why human-centred designers can sometimes feel like a lone voice arguing against experience decay when there isn’t an obvious or immediate impact. But when you start to take actions that worsen the customer experience, the long-term negative effects can build up quickly.

I’m reminded of Hemingway’s quote about going bankrupt two ways: “gradually, then suddenly”. The world is littered with companies that had winning positions and messed them up.

A reckoning is coming

Most businesses don’t have the same network capture that large brands have. But any company with a large customer base like a utility or a telco, is at risk from the scenario I’m describing. When they choose to make an experience worse or enshittify it, there is a long-term reckoning. Those customers will go elsewhere, and the business will fall apart.

So the question for design leaders and CX leaders becomes: how do you recognise when this is happening in your organisation and what can you do about it?

First, let’s introduce some nuance to the discussion: yes, we can all agree that wilful experience decay is bad, but … some of it is necessary. As a user-centred design leader, you need to understand the underlying commercials that the business has to hit. Otherwise, you’re advocating for a level of customer experience that’s not realistic.

The sum of our choices

Suppose the business gets revenue from clients that have paid to advertise on your platform. Provided you do a really good job at matching the customer persona to the relevant ads, that’s objectively a good business decision. That’s an acceptable trade-off to pay everyone’s wages.

Nudging a user to sign up for support by making the UX less intuitive is a dark pattern. An example of a compromise that is more suitable is emphasising the benefits of a pricing tier that delivers the most profit within a table of prices.

The business cost of experience decay

Human-centred designers can help the business avoid pitfalls by speaking the language that the commercial side understands. If the sales side of the business argues for putting in a dark pattern UX to increase profits, that’s the moment to talk about the cost of customer acquisition over time, and how it affects churn rates.

I think of this as the necessary maturing of the design function. If the early version of UX was totally focused on the user, service design balances the needs of the customer and the business. I believe design leaders can’t be evangelical and focus purely on a great customer experience: they need to recognise the revenue imperative.

This is a fascinating area and it’s full of nuance and tension: it’s not as binary as it first seems. On the night, we’re aiming to reach an understanding for how to deal with wilful experience decay in a way that’s optimal for the customer and the business.