Experienced Points

Experienced Points
Not Greedy, Just Clueless

Shamus Young | 12 Mar 2013 09:00
Experienced Points - RSS 2.0

Question: "Why does publisher X have such greedy business practices?"

Answer: "Companies exist to make money!"

I see this exchange a lot, and the sad thing is that both the question and the answer are misguided. Jim Sterling touched on this a few weeks ago, but I thought I'd dig a little deeper and talk about why the problem is cluelessness, not greed.

When people accuse a company of being "greedy", they make it sound like they think the company ought to make less money out of the kindness of their hearts. But this isn't really about money, or companies making too much. EA has been doing layoffs and struggling in various ways for years, and that doesn't make their behavior any less annoying to consumers. Apple and Starbucks are notorious for selling things with massive markups, yet both companies have rabid fans who can't wait to hand over their cash for the Next Delicious Thing. Meanwhile, people are becoming enraged at one-dollar items for sale in Dead Space 3. This isn't because people are mindless sheeple, or irrationally biased against EA, or because people are bad at math. It's because the most important aspect of these transactions isn't the price, but the consumer experience.

About twenty-five years ago, fast food places invented the idea of the value meal, combo meal, or whatever you call it when you order one item to get several. Before this, you had to order your burger, fries, and a drink individually. With a combo meal, you could just order a single item for a single price. Sure, maybe you used to get a small drink and now you get a medium and you didn't usually get fries and now you do, but by gathering up the items under a single price point the restaurant can make things more convenient, get you to buy more food, and leave you with the impression that you somehow saved money. This was smart. This was a system devised by people who understood what consumers wanted and how they behaved.

The stupid way around would be to make more money by charging people for small items. Charge for napkins. Charge for condiments. Charge for the cup, the ice, the tray, and the utensils. Charge people to enter the store, charge them to talk with other patrons, charge them for the bathroom, for window seats, for privacy, and for access to WiFi. This is how EA has been selling their games.

People will call the second idea "greedy", even if it makes less money than the combo meal idea. This isn't about greed, it's about customers feeling respected and not being unduly hassled over trivial things. Even more importantly, this is about convenience.

Comments on