Do you take into account the hidden cost when making decisions? It's one of those areas where I used to fail miserably. I've learned to take it into account over the last couple years, but only recently was able to formulate the concept properly.

The idea goes something like this: Behind most obvious decisions is a non-obvious hidden cost, which can often outweigh the benefit of the "obvious" decision.

I stumbled upon a great real-world example in the drive-through to Taco Bell a few days ago. I realized that there was a flaw in the system: I could order, then drive up to the payment window, and not be able to pay. Taco Bell would likely throw away the food, and have to eat the cost. The system had a flaw. Engineers like fundamentally perfect systems, and that's a good thing.

But if an engineer had designed the drive-through, you would probably have to pay before they started making your food. Impossible to game, flaw destroyed. The problem is, what's the cost of the extra time involved in waiting until you receive payment before you start making the food? And what's the cost per meal wasted times the number of times that the customer is not able to pay? There's a reason they start making your food right away: It saves a ton of time, and people are able to pay most of the time.

Seems obvious, right? Then why do we still insist on requiring two password fields, one for verification? Or two email fields? Sure, a banking application might require this... but your average web app? You could look at it this way: What's the chance that someone will mistype both their email AND password, weighed against the drop-off in signups because of the extra form fields. You will drop a significant number of sign-ups with the added fields, but there will be a very small percentage of people who get both their email and password wrong.

Another pet peeve that PG originally pointed out to us: requiring email confirmation as part of the sign-up process. Email is notoriously unreliable, and often gets flagged as spam or not delivered. Why would you require an email confirmation as part of your sign-up process when there is a high probability that the email will never be received, and the user won't be able to sign-up? Maybe I'm in a computer lab and I get email on my laptop. Tough luck, I can't use the website now, when I want to -- I have to wait until I can check my email. Does that high of a percentage of people not supply their correct email address, that you need to require confirmation? And does having a confirmed email address outweigh the big drop-off in signups?

We've learned to take the hidden cost into account with Weebly. It can apply to across the board: Adding features weighed against the added complexity to your application, bootstrapping weighed against the loss in growth momentum, increased security weighed against the increased difficulty in using the application.

In a nutshell: each decision you make will have a negative counterpart. Even (and especially) the most obvious decisions. Figure out what that hidden cost is, and make sure it doesn't outweigh the original benefit.

 


Comments

engtech link
03/19/2008 22:44

What works better than email confirmation is email UNCONFIRMATION.

Assume the email address is good unless the person you send the validation email to clicks the "this isn't my account button"

I get about 5-10 idiots a week typing in my email address instead of theirs. It's a complete pain in the ass to get the account canceled most of the time.

Reply
Calamitous link
03/21/2008 22:16

While I agree with the majority of your post, I think there's a slight misunderstanding-- requiring e-mail validation is not in any way intended for the benefit of the user, it's for the site operator. Requiring e-mail confirmation (theoretically) protects them from spambots or internet thugs, who would flood their servers with garbage accounts.

Additionally, many sites will waive captcha/human verification requirements for posting for registered users-- people who have already proven they're not spambots.

This may be one of those instances where we've done something a certain way for so long we've forgotten to step back and see if there's a better way.

Reply
Mikael Öhrén link
03/26/2008 03:20

Hi David,

Thanks for a good post, but like you say it is pretty obvious but hard to actually live up to.

You also mention extra fields and converting visitors into customers...

I am curious how big difference you have experienced by putting the sign-up form on your frontpage, as compared to having a link "sign upp here"? I know facebook also started doing this and I assume A/B split tests will show a greater conversion rate (10-20%?). I know marketingexperiements.com tried this out. They experienced a lower click through rate to the form, but a higher conversion rate.

You also use "gradual engagement" by letting the customer use your product before signing up. I like the sign-up form when you click "publish"! (concept suggested the other day on A Lista apart: http://www.alistapart.com/articles/signupforms).

Do most users actually sign upp through the engagement or on the frontpage? Do you know?

You have an excellent frontpage and I can imagine an impressive conversion rate... I will do a similar layout on my Swedish social network.

Regards,
Mikael

Reply
David Rusenko link
03/27/2008 02:16

@Mikael,

Generally, there is about a 50% drop off rate when asking a user to click on something. So bringing the sign-up form to the home page reduces that drop-off.

We still see the majority of our signups (about 2/3) from our home page -- most of the traffic to our homepage is very targeted, and people are ready to sign-up right away and use the service. But about 1/3 of our signups go through the "Live demo" area.

Also, to answer the broader question: We convert about 50% of new traffic to our homepage into signed up users.

Reply
fuaad link
05/13/2008 21:42

i've just created this website and am working on it. so i am sure it wil takelong time so please bear with me.

Reply
cannabis test link
09/24/2008 12:43

Hi, David
thanks for useful info
Regards, DSasser

Reply
drug test link
10/29/2008 02:03

I know facebook also started doing this and I assume A/B split tests will show a greater conversion rate
Regards, Susan
<a href="http://elmirastore.com">how to pass a drug test</a>
<a href="http://howlongdoescocainestayinyoursystem.com/">how long does cocaine stay in your system</a>

Reply

Comments are closed.