Wednesday, November 3, 2010

When simplification makes money

Alex Hardy's FriendFeed account included a share of a Pete Williams tweet (via @wandster) of a post entitled Expedia on how one extra data field can cost $12m.

What was the one field? The "Company" field just below the "Name" field.

What was the problem? People were putting the wrong company name in there.

"We had an optional field on the site under 'Name', which was 'Company'," Megibow said.

"It confused some customers who filled out the 'Company' field with their bank name."

After putting in their bank name, these customers then went on to enter the address of their bank, rather than their home address, in the address field.

"When it came to address verification to process the credit card, it failed because it was not the address of credit card holder," [Expedia's VP of global analytics and optimization Joe] Megibow said.

So Expedia removed the field, transactions stopped being rejected, and sales went up.

I'd provide a long convoluted analysis of this, but somehow that doesn't seem appropriate.
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