The (corporate) benefits of Bad UX are real

How poor user experience became a silent profit center

In the world of modern business, there's a peculiar paradox: sometimes, making things harder for your customers can be more profitable than making them easier. This isn't a bug in the system - it's increasingly becoming a feature. While companies trumpet their commitment to customer experience, many have discovered that strategic friction can be surprisingly profitable.

Consider this real-world example from the telecom industry: My provider, Tele2, recently demonstrated this principle in action through two different payment reminders, sent a year apart. The evolution in their approach reveals a calculated shift from customer service to profit optimization.

The Economics of Inconvenience

Let's start with some numbers that should raise eyebrows: It likely costs a telecom provider between €0.001 to €0.05 per sent SMS (text message). Yet when customers miss a payment, they typically charge €6 to €10 (60-100 SEK) for a reminder. That's over a 100x markup. This isn't unique to telecoms:

• Banking apps that could easily prevent overdrafts instead profit from overdraft fees
• Subscription services that make cancellation a maze while signup takes one click
• Airlines that could automatically rebook disrupted flights but require manual claims for compensation

The pattern is clear: when helping customers costs pennies but their mistakes generate dollars, the incentive to help disappears.

The Evolution of Strategic Friction

2023: The "Friendly Warning" Approach

📱 After payment is due:
   "We noticed your payment is late. Pay now to avoid a reminder fee.
   Amount: 169 kr
   Account: BG XXXX-XXXX
   Reference: XXX-XXX-XXX

   Recent payment? Disregard this message."

2024: The "Fait Accompli" Method

📱 After payment is due:
   "Your payment is late. A reminder fee will be added to your next bill.
   Amount: 169 kr
   Account: PG XXX XX XX-X
   Reference: XXX-XXX-XXX

   Recent payment? Disregard this message."

POV ↓

This shift isn't accidental. The second approach ensures the fee is non-negotiable, transforming a customer service interaction into guaranteed revenue.

The ROI of Poor UX

The technology to prevent these issues exists and is remarkably cheap. Telecom providers can track roaming data usage to the kilobyte and cut service instantly at limits. Banks can detect potential fraud in real-time. Airlines can predict delays hours in advance. Yet when it comes to preventing customer fees, this technological sophistication mysteriously vanishes.

Here's what good UX could look like:

📱 3 days before due date:
   "Payment due in 3 days
   Amount: 169 kr
   Account: PG XXX XX XX-X
   Reference: XXX-XXX-XXX"

📱 2 days before:
   "Payment due in 2 days
   Amount and details as before"

📱 1 day before:
   "Payment due tomorrow
   Late payment will incur:
   - Base fee: 16.90 kr (10%)
   - Max interest: 33.80 kr (20%)
   Amount and payment details as before"

📱 If payment missed, 7 days after due date:
   "Payment overdue
   Current balance: 169 kr
   Late fee applied: 16.90 kr
   Interest accruing: 0.45 kr/day
   Please pay to avoid service interruption"

Some companies actually do this right. American Express sends multiple payment reminders before due dates. Netflix gives a full month's notice before subscription changes. Amazon proactively refunds price differences. These practices haven't bankrupted these companies – if anything, they've built stronger customer loyalty.

Breaking the Cycle

The solution isn't complicated, but it requires rethinking the relationship between friction and profit:

1. Cap penalty fees at reasonable percentages (10% for late fees, 20% for interest)
2. Mandate proactive notifications before negative events
3. Require clear disclosure of all potential charges
4. Implement mandatory grace periods before service interruptions
5. Create incentives for companies to prevent customer mistakes rather than profit from them

Of course, companies will resist. They'll cite technical limitations, system complexities, and implementation costs. But remember: these are often the same organizations that have built incredibly sophisticated systems for revenue optimization. The technology isn't the barrier – the business model is.

The Bottom Line

In today's digital age, we manage dozens of subscriptions, payments, and services. Mistakes are inevitable. The question isn't whether customers will make errors – it's whether companies should profit from those errors when prevention costs nearly nothing.

The real cost of bad UX isn't measured in customer frustration alone – it's measured in the silent tax it imposes on society. When companies profit more from customer mistakes than customer success, we've created a perverse incentive that undermines the very purpose of business: to create value through service.

If you're a product manager, UX designer, or business leader, challenge this model. If you're a consumer, demand better. Write to your consumer protection agency. Contact your parliamentary representatives. Share this analysis with your network.

Because in the end, a business model built on profiting from customer friction isn't just bad UX – it's bad business.

P.S. Much ❤️ to Tele2 for inspiring this post. Without your enshittification, this post would not have been created.