The Mistake Economy

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by: Jonathan Salem Baskin

When a credit card company assesses a fee on late payments, and then raises four-fold or more the interest rates it charges, it’s not just realizing one of the primary sources of income for the entire industry.

It’s a pillar of the Mistake Economy.

Have you checked lately what rate you’re charged for minutes beyond the limits of your mobile phone calling plan? Ditto for driving beyond your allocated rental car miles. How about paying a shipping and handling or restocking fee for returning something you’ve bought? Some municipality budgets rely on writing enough traffic tickets. Even car and health insurance plans are priced differently once mistakes from driving or illness intervene.

Many businesses don’t start making really good money until consumers screw up. Some don’t succeed at all unless their purchasers fail at something first.

The Mistake Economy subtly affects how products are marketed, too. Introductory offers work because of an implicit expectation that consumers won’t do the math on what something will cost after the special deal expires. Companies that outsource and then charge for customer service do so with the presumption that customers are at fault for their own problems. Even the very conception that people will perceive (let alone believe) some of the more fantastic expectations of branding rely on consumers making the mistake of credulity.

It’s not terribly customer-centric, unless you envision your customers as targets. Or victims.

I suspect that consumers are wise to the dishonesty inherent in the Mistake Economy: I know that I am, and you probably are, too, as you’re careful not to break the rules that product or service providers now wrap around their sales. Maybe a larger audience is just dimly aware of it, and that’s why corporate reputations are consistently low. Maybe it’s why it’s so hard to engender and maintain customer loyalty. 

When we think as brand strategists instead of consumers, we can convince ourselves otherwise…or maybe close one eye and squint with the other, and thereby hold out hope that points or discounts will keep people happy. But as we avoid addressing the fundamental disconnect between branding’s rosy promises, and the thorny reality of experience, I suspect even the most carefree consumers don’t miss entirely.

Maybe the Mistake Economy just makes people more wary. From wariness a lot of other emotions arise, such as distrust, cynicism, and sometimes outright disdain.

So if your business participates in the Mistake Economy, maybe you want to take some of the money you’re spending on all that glorious branding nonsense, and find a way to stop waiting for your customers to slip up?

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