Transaction Costs Are Subjective

Jason Shellen and I are in NYC for John Battelle’s conversational marketing summit and a number of Plinky-related meetings. We grabbed a quick lunch in-between meetings at a small sandwich shop in SoHo where I saw the following sign:

Beyond the bad grammar, the most interesting aspect to me was that someone would find it easier/better to make all the changes and leave the sign as opposed to print and post a new one.

This brings me to a comment Rory Sutherland made a few months ago as we were discussing a startup idea. His comment was that transaction costs are subjective. Consider the example of asking someone who has just purchased a digital camera to register it. Some people may prefer to send in a postcard. Others may prefer to call an 800 number. Yet others may prefer to register the camera on the Web. To the folks in the coffee shop, the cost of printing a new notice was clearly too high.

When you ask a customer to do something, keep in mind that transaction costs are subjective and what is easy for some to do may be perceived as difficult by others. It is not always easy to provide multiple ways to do a task that are simple and easy to follow but it is well-worth thinking about how to do it.

About Simeon Simeonov

Entrepreneur. Investor. Trusted advisor.
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1 Response to Transaction Costs Are Subjective

  1. Mitch says:

    Maybe it wasn’t the cofee-shop owner who did it. I’ll bet a customer or passer-by did it. I know lots of folks who take some pleasure in doing stuff like this.

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