A second warning

Yesterday I implored you not to be a tweaker...

And today I want to do it again.

"What is a tweaker?"

I’m referring to individuals obsessed with solving big problems by making hundreds and hundreds of small tweaks.

Some people may prefer to call these individuals “nudgers”—but tweakers sounds better (and is more descriptive) in my humble opinion.

Let me lay out a problem and show you how a tweaker would attempt to solve it.

Problem: Increase sales at a local grocery store

The tweaker would come at a problem like this will a dozen different tactics. They would have the grocery store owner come up with an expiring coupon, only valid for the next 7 days, that would drive short-term traffic into the store using loss aversion.

They would run a local food bank drive, in which a customer would get a donation made in their name for each $100 they purchased at the store.

They would have the store owner put one of his employees near the entrance to hand out free samples to induce a feeling of reciprocity.

And so on.

I have no doubt that a lot of this work would have a positive short-term impact on the grocery store’s business.

These tweaks would each result in small, sub 10% (and mostly sub 3%) improvements. Summed together, you could get a pretty nice bump--but there’s a problem.

Each of these interventions introduces a big, hidden cost: what I like to call “organizational complexity.”

You see, running these interventions doesn’t just cost money, time, and attention... each intervention also adds "clutter" to the organization.

Let me show you what I mean: Each of these programs requires fairly regular updating (even if a piece of software could do a decent amount of the work for #1 and #2).

So the owner of the shop has to add at least two weekly appointments to his calendar to take care of this work.

“That’s not a big deal” you may say. But all of those appointments add up over time, cluttering his schedule & thus leaving him less able to explore new opportunities.

In addition, these new programs have to fit into all of the other systems and programs that the grocer is running. So let’s say he has a regular newspaper ad that he runs each week. He has to make sure that it doesn’t conflict or undercut his new expiring coupon program. Also, he’s going to have to figure out what to sample at the front door, and either come up with arrangements with companies to get samples, or cut into his own inventory a bit… and then there’s the preparation cost and the issue of coordinating all of this so that he has enough staff on hand to do all of the prep at the proper times each week.

Each new program makes it harder to add a new program since each new program has to take all of the existing programs into account. This eventually leads to a crisis; the organization just shuts down under its own weight and complexity.

Stated differently: each additional tweak the grocer makes constrains his operation, making it harder for him to change.

These tweaks also get the grocer hooked--in the worst way possible.

As many of you know, we’re loss averse creatures. We do whatever it takes to keep what we have. Those marginal sales brought in by the coupon initiative? While they may be tiny (1-2% above baseline), our grocer friend won't be willing to let them go.

He's trapped in a prison of the tweaker's making.

All of this is a long way of saying: stay away from the 2% tweaks. They're not worth it (except in specific circumstances that I'll lay out in future emails).

Chasing these nudges is like picking up nickels in a swamp.

So how would a sensible behavioral scientist approach this grocer's problem?

For that, you’ll have to wait until tomorrow.

-Jason

Jason Hreha