The dark side of low prices

I spent over an frustrating hour on the phone yesterday with Bank Of America and Paypal trying to sort out what a charge that was showing up on my credit card. All of $4,200.00. So nothing small. It turned out that it was correct, but the description was so incorrect that it was impossible for me to figure out just from reading the statement. I know we’ve all been there.

During this fiasco I spoke to five different people, earned myself a $25 Amazon gift certificate to ‘apologize’ for the bad service (Is that all my time is worth?), was on infinite hold (15 minutes+) waiting for a ‘supervisor’ – twice. Anyway I won’t go into the blow by blow because it’s boring and stressful to recount.

My point. We are getting what we pay for. Whether it is banking or airplanes or health insurance or telephone or cable. We have set up a world where competitors fight to the death to meet the one metric we have or care about, and that’s price. The cheapest wins. And so the competitors fight to the death to give us the cheapest service which means the worse service. We don’t (or can’t reward) vendors for good service and so that goes out the window. 

Minimally trained ‘screeners’, forcing you to explain your problem before being given to a live agent (if at all), being subjected to advertisements while on hold, multiple and inconclusive transfers to another department, confusing bills and all that. 

We are getting what we asked for.

What is one life worth?

A fascinating article, which is hard to disagree with, although the conclusion is a little counter-intuitive:

“Imagine that the captain of a $5 billion aircraft carrier let his ship sink rather than allow seven volunteers to attempt a repair, on the grounds that the odds favoring their survival were only 50 to 1. Such an officer would be court-martialed and regarded with universal contempt both by his brother officers and by society at large.” (from How Much is an Astronaut’s Life Worth?)

If you agree with this logic, it would be hard to argue with the case made in the article, that the top priority of a space mission should be Mission Success not Human Safety.

The article also very nicely puts a value on ‘excess’ expenditures for safety in space exploration by looking at how many lives could have been saved if those funds were spent on, for example, healthcare or immunizations.