A lot of customer knowledge may be a dangerous thing

I went to see Rossini’s La Donna del Lago a few weeks ago. It cost £12.50. The reason it only cost £12.50 was because I watched it at my local Odeon multiplex cinema in a retail park outside Tunbridge Wells, transmitted live (1) from the Royal Opera House. The cinema was packed. I’m not surprised. Because (don’t tell the organisers this) I would have happily paid more to enjoy it at the cinema than at the opera house itself.

At the Odeon I could park right outside for free. I could buy drinks without pre-booking them in advance and take them into the auditorium with me. I could nip out to the loo. And getting in and out for the interval took a few seconds, rather than involving a ten-minute shuffle stuck behind pretentious North Londoners while secretly wanting to punch them in the neck.

Yes, I think there would have been certain slight advantages to seeing La Donna del Lago by travelling to Covent Garden. But only at the price of a whole heap of grief.

When we talk about brands, we always talk about ‘what makes them great’. But what distinguishes the most successful brands is that they are really good at being ‘consistently not at all bad’. A colleague of mine, the experience architect Matt Watkinson, talks about our 'threshold of indignation'. This is the extent to which the annoyance and confusion of a path of action stays within your zone of tolerance.

This approach to psychology was first proposed by the godfather of behavioural economics, the late Herbert Simon, when he coined the words 'satisficing' and 'maximising' to describe two different approaches to human decision-making.

I often illustrate the difference between the two by asking people to name the best meal they have ever eaten. Usually they will refer to some amazing culinary orgasm they once enjoyed in a famous restaurant. Then I ask the follow-up question. 'And how often have you been to that restaurant?' The answer is almost always the same: 'Once.'

If you look at London’s most successful restaurants (whether The Wolseley or McDonald’s) they appeal to the satisficer: you’ll find that the food that they serve is very good but relatively unambitious and predictable. They also tend to be open all afternoon. The avoidance of disappointment means more to us than the achievement of transcendence.

I have written about this phenomenon before. But two recent experiences caused me to revisit the topic.

A few months ago, I went to my usual Starbucks at Victoria Station, next to Platform 2. I always go here when catching a train from the more civilised (Kent) side of the station, and so Starbucks had created in me that most valuable thing: an unthinking habit. Each time I went, I would pay with my Starbucks Card or mobile phone app, pick up a flat white and settle down to my email inbox with the help of the free wifi provided.

This time was different. Suddenly I was told that my card and app were no longer accepted. Why not? 'Because we’ve just become a franchise.' 'Fair enough,' I thought, slightly grudgingly. 'I’ll pay with cash.' Then I sat down. The wifi signal was no longer there. 'What’s happened to the wifi?' 'Oh, we turned it off when we became a franchise.' 'I see. So the word ‘franchise’ has become a catch-all licence for being crap?' I hardly ever go there now. My threshold of indignation had been breached. It seems astonishing to me that a brand with such a reputation for consistency should allow a franchisee to behave in this way.

In the same week, I had an experience with the Sevenoaks Council Parking Department. Until a year ago, you could only pay to park in Sevenoaks using a pay-and-display machine. For about two years the council has also offered a mobile means of payment. About once a year under the old system I would forget to buy a ticket and pick up a £25 fine. Fair enough, I thought. For all they know I might be an inveterate chancer, a persistent cheat. I paid the fine unquestioningly. Then, two years ago, I switched to paying with my mobile phone.

For two years everything worked perfectly. But eight weeks ago, briefly distracted by one of my children, I forgot to pay for the first ten minutes and in that short interval I was given a ticket. This time I was fairly annoyed, nay indignant. 'Look, you can see from your records that I have spent about £50 a month on Sevenoaks parking for the past two years. Would it kill you to let me off a fine once?'

And that seems to me a rather important yet overlooked fact about customer data. Yes, we know more about our customers. But they also know that we know. The existence of customer data will narrow our threshold of indignation. It is no longer 'Do you know who I am?' but 'You already know who I am.'

We ought to be rather more alert to this risk.

(1) I can’t quite explain why, but opera, like major sporting events, only works when seen live

Rory Sutherland is vice-chairman of OgilvyOne London and Ogilvy Group UK. [email protected] This article was taken from the September 2013 issue of Market Leader. Browse the archive here.