Lower the Cost of Knowing

Before tools like Survey Monkey were available, you could conduct surveys. But the cost was much higher, often including costs of envelope stuffing,  outbound and return postage, incentives such as a dollar in each envelope (to try to increase the response rate), data entry costs, and long time delays. Given the hassle and costs, you might be forgiven for making important decisions based on sparse data. In America, it’s called going with your gut. The rapid proliferation of low-cost web-based survey tools is a clear indication that lowering the “cost of knowing” stimulates organizations to “go find out.” In the past, companies did not survey as extensively because they felt they couldn’t afford the higher costs, and perhaps they did not value knowing enough to invest more.

Likewise, before point-of-sale systems were widely available, retailers were able to track customers and their buying habits, but at a very high cost and hassle factor. It was probably easier to “go with your gut”. Now, point-of-sale systems are a multi-billion dollar a year business and retailers are at an extreme disadvantage if they don’t use one.

A lower cost of knowing continues shifts in our desire and use of information. Developments such as nearly free international communication to practically ubiquitous Internet search have made knowing quick and easy. For example, today it is possible to very quickly discover which vendor has the best price and service. Improved information allows everyone to make better and faster decisions.

And yet today, many software producers still take a reactive “go with your gut” approach to understanding how their customers use their applications and measuring the satisfaction they receive from them. That is because historically, it’s been difficult and expensive to measure how users - individually or in aggregate - actually use applications. In other words, they perceive the cost of knowing as higher than the value of knowing.

This will change as new options significantly reduce the cost of knowing for software producers. In tighter economic times such as now, getting low cost, accurate and timely insight into software behavior, stability and performance will become essential. Successful software producers will benefit from the value of enhancing the customer’s experience by proactively understanding problems and opportunities and acting decisively based on their knowledge. What your customers aren’t telling you might be hurting you. After all, why would you rely only on your “gut” or a handful of customers for feedback when you can easily listen to your applications in a broad and precise way?

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