The design of options

Photo by Toa Heftiba on Unsplash

The business of selling premium options can be tricky. The basic premise is that the buyer of those options is afforded special treatment, mostly having to do with improving the quality of their outcomes and experiences. It works because societies and its members are risk averse, as Daniel Kahneman and Amos Tversky have illustrated with their prospect theory. However, what if things don’t turn out to be that bad? Or, what if despite the insurance against needless aggravation, there is aggravation? Then the premium one has paid for turns out to be a loss.

The air travel provides us with a few useful examples. The option to zip through airport security using a fast lane. What if the airport isn’t busy at all at that hour? We pay more to depart within a certain time slot, sooner or later than a cheaper flight. But then the flight is delayed, arriving at the destination around the same time as a cheaper alternative. Is that option to board the flight before others really worth buying? The flight won’t depart until everyone has boarded.

Not everyone is a frequent flyer or an aviation geek (as I am), so they won’t know to first check on SeatGuru.com which aircraft the airline will be flying them on. They may pay for a seat upgrade without any idea of the actual configuration. Even the airline cannot always be sure which aircraft they will fly, subject to the vagaries of flight operations.

No worries, because you are flying on Southwest Airlines. Their entire fleet is of the Boeing 737 family of aircraft. You will always know what you’re getting into. Plus Southwest does not insist you pick a seat in advance and stick to it. You can purchase the option of picking where you want to sit after boarding and also not worrying about stowage for your carryon bags — that coveted space that sometimes leads to alterations.

EarlyBird Check-In is a low-cost option giving you the convenience of automatic check-in before our traditional 24-hour check-in. You’ll have the benefit of an earlier boarding position. As an EarlyBird Check-In Customer, you will have a better opportunity to select your preferred available seat and have earlier access to overhead bin storage for your carryon luggage. ~ Southwest Airlines

So you board early, see what is available, and situate yourself away from the window or the aisle, based on your preferences. If the airline has put enough thinking into its designs, you will most likely get what you paid for. In general, service providers design their services to maximize net value for their customers, subject to the constraints of outcomes, experiences, and price. It is a non-linear optimization problem.

But even the best airlines provide public transportation. That means you don’t get to choose who else should be on that flight (let’s not go there), how much they choose to pay, and therefore where they get to sit. If you do, then you are on a private jet. Besides, be happy there are many others who have the same idea about flying at the same time on the same day. If airlines don’t make enough money over time, they discontinue the service.

The boarding continues. The early birds have caught their worms. The rest of the passengers survey their limited options. They aren’t many, so one of them occupies the seat next to you. Then it happens. The sheer expanse of their human self, causes the net value of your prepaid option to dramatically contract.

Surely the early bird option isn’t just about having the privilege to pick a seat as if people are driven purely by self-conceit. It is also a matter of personal comfort, especially on long flights. Those who pay for the option are justifiably upset to see its value diminishes all of a sudden. When seats are assigned, having an empty seat next to you feels like a gain. When you pay to pick any seat you want, finding that seat more than occupied, feels like a veritable loss.

Nobody is at fault here. We can optimize designs only to an extent beyond which they becomes entirely different designs. Some problems are simply difficult to solve. Unless airlines start weighing passengers during the check-in process, such situations are likely to happen. Doing so would be onerous, outrageous, and unethical. Thus are some of the challenges of human-centered design.

The more human-centered the design is, the greater the ethical considerations. Airlines need to make money. Many of their flights hardly make any. Price comparison sites like Priceline, Kayak, and Skyscanner have made it convenient to find cheaper fares. Low-fare airlines have forced legacy carriers to offer the basic economy fare. Most people aren’t above paying for exclusivity based on the packaging of privilege and the merchandizing of pain.

Services are sets of promises.

Promises of performances and affordances. Everybody on that flight will enjoy the same performance — modification of their physical coordinates from one set to another, within a certain timeframe. But they will not enjoy the same affordances — due to the differences across the seat map. Since the airline is profiting from price discrimination, they should factor in the probability of failing to keep the promises, into the designs of the performances and affordances.

Designs are closer to perfect when they incorporate the handling of exceptions. If a person has paid extra for the privilege to pick a seat, which they are then forced to give up, then they should be given a refund without having ask for it. Designs should fully leverage the power of human intelligence. Airlines should give flight attendants the discretionary authority to initiate the process.

Comments 2

  1. Lisa February 27, 2019

    What a perfect real world example! I particularly like the part where you recommend empowering the flight attendants to ‘make it right’ and not force the customer to have to request the refund. We need to empower those closest to the issue/problem vs. always escalating.

    • Majid Iqbal February 27, 2019

      Thank you! And I absolutely agree with you on the organization design aspects of service design. A key principle being: Push accountability as high as possible into the hierarchy but no higher. Push authority as low as possible (to the front line) but no lower. Responsibility without authority is setting up your teams for failure.

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