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nuanced-fiMany people have reacted vehemently against the government’s move to regulate the creation, distribution and usage of Indian maps under the proposed Geospatial Information Regulation bill. Some have even insinuated that the move is a veiled threat to police Google Maps and amounts to “throwing out the baby with the bathwater”.

Whether they’re right or wrong in the specific context of mapping, throwing the baby out with the bathwater is a fairly common practice in many contexts in India. Let me take two recent examples of it:

  • 2% of online credit card transactions are reported to be fraudulent. When the regulator discovers this, it responds with its mandate for two factor authentication for all online payments, ostensibly to secure online payments and encourage more people to pay online. But something else happens: 2FA introduces a lot of friction in the online payment journey and results in a high percentage of failed payments, which puts off 100% of consumers who were previously paying online. Many of them – including me – turn to cash. Cash becomes king – even in ecommerce.

  • A call center rep of a telecom company answers a caller’s question about his native place. Soon enough the company spots this transgression of company policy – the “calls are recorded for audit and training purposes” is not idle warning! But it doesn’t reprimand the said CSR. Instead, the shift manager makes a public announcement over the P.A system reiterating company policy forbidding CSRs from sharing personal information with customers. All 500 CSRs in the floor hear it. The offending CSR is not sure whether the company was referring to him at all or merely reiterating company policy. The other 499 CSRs waste the next two hours speculating which one of their colleagues did what to trigger the announcement.

So throwing the baby out with the bathwater is almost the practice du jour in policy-making and happens often even in the corporate world.

It’s not good for business. And world-class companies don’t do it.

Google once found that many website owners hosting its online ads via its AdSense program were clicking on many ads by themselves. At peak, 12-15% of all ad clicks were fraudulent. Such a high percentage of click fraud severely undermined the credibility of Google’s AdWords platform. Did Google discontinue AdSense? No. For a company that earns nearly 90% of its revenues from ads, that’d be harakiri.

Uber has a popular referral program where you can earn a free ride every time the person referred by you takes a ride. In the early days, many people used to game the system by creating multiple accounts so that they could claim the reward multiple times. Surely this went against the spirit of the referral program. Did Uber withdraw the program? No. That would’ve stymied its growth in the  early stages.

Google and Uber took a nuanced approach to combat their existential threats.

Google used sophisticated fraud detection technology to ferret out heavy perpetrators of click fraud. Without any warning, Google blacklisted their AdSense accounts. While the affected website owners accused Google of behaving autocratically, the company did contain click fraud and manage to restore advertisers’ confidence in AdWords.

uber-disable-accountsOnce it achieved a critical mass of adoption, Uber turned its attention to the miscreants who were gaming its system. Using technology to detect multiple accounts originating from the same handset, the company canceled the account of hundreds of people. Like Google, Uber didn’t issue any warning. But people got the message and learned not to fool around with Uber. Uber grew from strength to strength.

Thus Google and Uber devised sophisticated ways to safeguard their business without killing them off prematurely.

Hope Indian regulators and corporates learn a lesson from these two global powerhouses on how to take a nuanced approach and nurture fledgling businesses.

I also see a parallel between this topic and my favorite subject of spam versus targeted offers. With a little imagination, product owners should be able to use the learnings from the above examples to spec their product features in such a way that their customers get a better CX instead of becoming the baby that gets thrown out with the bathwater!

Ketharaman Swaminathan On July - 15 - 2016

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CX, Product, Uncategorized

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  • sketharaman

    UPDATE DATED 8-MAR-2017:

    Uber uses Greyball software tool to single out local authorities and thus avoid throwing the baby out with the bathwater. Source: How Uber Deceives the Authorities Worldwide (https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html)

  • sketharaman

    UPDATE DATED 10-MAR-2017:

    PayTM throws the baby out with the bathwater on 8 March but quickly retracts its stand the next day. Kudos for doing the right thing, even if it didn’t happen on the first pass.

    First, PayTM blocks credit cards after it realizes that “financially savvy merchants and bank staff were exploiting their discounts to rotate cash for free credit and loyalty points. Paytm in a lengthy blog post described how users started funding their Paytm wallet with their credit cards and transferring it to their bank accounts for free.” (Source: http://timesofindia.indiatimes.com/companies/paytm-blocks-credit-cards-to-check-user-misuse/articleshow/57548855.cms).

    Then, it compounds the problem by levying a flat 2% surcharge on *ALL* users for using credit cards to top up their PayTM wallets – just because a few “savvy merchants and bank staff” were misusing their accounts. To be fair, the company does promise to give back the 2% surcharge to users who spend the wallet balance on shopping (intended use) instead of withdrawing it to their bank accounts (misuse). (Source: http://www.medianama.com/2017/03/223-paytm-credit-cards-charges)

    Finally, PayTM realizes that its reflex action adversely affects the UX of tens of millions of users who use “their credit card for genuine transactions” aka who don’t misuse their accounts in the above mentioned manner. In keeping with its customary commitment to deliver superior UX, the company suspends the surcharge the next day. And, in keeping with the likes of Google, PayPal and Uber, who go selectively after offenders instead of throwing the baby out with the bathwater, PayTM announces plans to “build a series of features to curb such misuse.” (Source: https://blog.paytm.com/we-will-introduce-new-features-to-prevent-credit-card-misuse-in-add-money-4c59fbfe017f#.9k2eymi8v).

  • sketharaman

    UPDATE DATED 17-MAR-2017:

    This comment underscores the importance of not throwing the baby out with the bathwater.

    ==========

    http://paymentsviews.com/2017/01/24/guaranteed-fraud-prevention-solutions-maybe-some-things-in-life-are-guaranteed/

    James Shehorn says: January 26, 2017 at 10:23 am
    …Mitigating fraud is a critical subject, but let’s not forget that 98% of your customers are good customers. We want a nice balance of anti-fraud/anti-friction.

    ==========

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