Customers or Livestock?

The Evolution I Have Seen

I have been gainfully employed since I was nine years old. By the time I was sixteen, I had amassed enough experience, alongside a reputation for reliability, that I was hired to do jobs that are not typical for the average sixteen-year-old. I’m not bragging I’m just explaining. At sixteen I worked for a local bank, where I had the job of training local retail businesses in how to properly process credit cards. In those days, you couldn’t get a digital terminal and just swipe your customer’s card. You had to use those old machines that mashed a carbon triplicate onto the raised numbers of the card.

Let the reader understand.

Not too long after that, point-of-sale terminals became a thing, and entire businesses emerged solely devoted to the local installation of, and education surrounding, those terminals. What changed with the introduction of point-of-sale devices was far more revolutionary, though, than merely the mechanics of processing cards. What was irrevocably changed was the insight the retailer now was able to acquire into his own business, and especially regarding his engagement with his customers.

By the time I worked for Amazon, twenty-five years later, customer behavioral insights were so advanced that Amazon knew, moment by moment, almost exactly how many customers would be buying and how much they would spend. There was an internal web page that showed a moving line chart of real-time revenue. (If you had access to this page, you were precluded from trading Amazon stock without filing documents with the SEC.) Besides being useful for seeing revenue, it was an early-warning system for operational issues cropping up on the web site. If the actual collections being shown on the chart fell outside a statistical band representing the expected collections, you immediately knew something was operationally wrong with the web site. That’s how accurate Amazon’s revenue projections were at the time.

What brought all of this to mind was a note posted yesterday by

Matthew B. Crawford

about a recent unhappy experience with commercial air travel. He concludes with this observation:

Now I am looking out the window at the Netjets terminal for private jets, where the planes of Silicon Valley firms are coming and going briskly. Competence for us, wholesale dysfunction for you. I’m not sure how much longer ordinary people are going to continue to regard air travel as viable. It’s a frog in the pot situation.

Crawford’s experience is of a piece with a complete vibe shift I have observed in my lifetime during which corporations especially, but by no means only corporations, have begun treating their patrons much less like customers and more akin to how one might treat livestock. To put it another way, business attitudes toward customers have shifted from an urgent sense of the need for businesses to be solicitous, to an almost dismissive, utilitarian posture which operates according to the assumption that any particular customer can safely be viewed as disposable.

I find myself wondering if the extensive quantitative insights enabled by technology are behind this essentially inhuman shift in customer relations. Computer scientist David Gelernter, in his book Drawing Life, observed that “Computers have done a lot of good, and have also done a lot of harm, not in themselves (obviously) but insofar as they underline some of our worst tendencies.” I have been wondering if one of our “worst tendencies”, underlined by computers, is a propensity to be dismissive toward anyone we know that we don’t especially benefit from pleasing.

There is a truism, which we all recognize, that “familiarity breeds contempt”. The way that a growing indifference toward individual customers has coincided with an explosion of quantitative insights into customer behavior makes me wonder if what we’re witnessing is an unhappy side-effect of that data explosion.

In another context, I have observed that children will often behave worse for their own parents than for others. This is not, of course, uniformly true. But it has been true often enough in my experience that I have made conscious note of it. I have always suspected that at least part of the reason for this is that those children operate with greater insights into the behavior of their parents. In some essential way, when they are with others, the inherent relational uncertainty constrains the children’s “worst tendencies”.

So I find myself wondering if the rich availability of customer data has reduced customer relational uncertainty entirely in the business’s favor. Maybe the vibe shift I have observed is due to the lopsided quantitative insight now in the hands of businesses. Perhaps their previously more constrained insight into customer behavior necessitated that they operate with more eagerness to please. Maybe the now commonplace smug indifference we encounter from businesses is actually due to the quantitative insights that have become available to businesses over the last thirty years.

Maybe there’s a kind of law that could be articulated:

The more a business knows about all of its customers, the less it needs to care about any particular one.

That would explain a lot. It would certainly explain the behavior of the online tech giants.