Behavioral scientists use the term “sludge” for friction that makes processes difficult to navigate, and which may end up frustrating people by depriving them of access to goods, opportunities and services. Three types of sludge are endemic in business. Finding and eliminating them should be priorities for consumers and businesses alike, write Cait Lamberton and Dilip Soman in this opinion piece.

Lamberton is a professor of marketing at the Wharton School of the University of Pennsylvania, where she studies consumption and consumer behavior. Soman is a professor of behavioral science and economics at Rotman School of Management at the University of Toronto.

The Vision Property Management offer sounded fantastic to homeowner hopefuls: Rent-to-own this handyman home and sidestep all the frustration of mortgage applications. Vision’s low-entry cost, low-fuss setup looked like a behaviorally-smart “nudge” – a clever change in the structure of home-buying that gives some improbable homeowners access to the American Dream.

But the Vision deal also included large doses of something behavioral scientists call “sludge”: friction that makes processes difficult to navigate, that may be frustrating, stigmatizing, or humiliating, and that might end up depriving people of access to goods, opportunities, and services. From a complex lease agreement to a Pandora’s box of repairs, this Vision proposition was sludge at its finest.

This sludge was clearly bad for consumers, many of whom abandoned the properties or were evicted. But it didn’t turn out well for the firm, either. By January 2020, sludge might have cost Vision and its financer Atalaya Capital Management more than $3 million in restitution for consumers, not to mention years of expensive litigation, and disastrous PR.

We find sludge everywhere. Intuit, the company that sells Turbo-tax tax-filing software, recently attracted a lawsuit for making it difficult to find the free version of their software. The website offers a virtual wall of shame, detailing tactics used to put sludge between customers and what they really want (and often instead, with goods they never intended to buy). Ticketmaster may sneak goods into our baskets and make it difficult to remove them, in a tactic referred-to as “roach motelling.” Legal scholar Cass Sunstein has suggested that we all bear the costs of sludge, as government imposes nearly 10 billion hours of paperwork burdens on citizens a year – much of it more complex and redundant than is necessary to accomplish our goals.

Sludge not only drives consumers away, it also kills any goodwill that they might take with them.

Though the short-term gains from buying or selling a so-called sludgey product may seem alluring, we would argue that just as with Vision, this is building success on a house of very sticky cards. Sludge not only drives consumers away, it also kills any goodwill that they might take with them. Three types of sludge can clearly be seen in the Vision story – and they’re nearly endemic in business. Finding and busting them should be a priority for consumers and businesses alike.

Open the Door: Bust ‘Access Sludge’

The Vision rent-to-own plan was intended to create access, particularly to prospective homeowners who might otherwise have been left in the cold. But the renovation requirements, long repair procedures, and complicated permitting processes effectively slammed the door on their dreams.

Access sludge like this creeps up easily. Start with the physical environment where a business operates. Are doors accessible for all? Virtual and communication barriers are just as real. Difficult-to-recall passwords, multiple sign-ons and single-language communication all present access sludge.

Once people get in the door, businesses still have to make sure they can navigate the hallways. In the case of the Free Application for Student Aid, substantial sludge exists for lower-income and first-generation students hoping to access higher education funding since they lack access to parental tax forms or a permanent address.

Even if people can navigate the hallways, businesses also need to make them psychologically comfortable. For example, the Federal McKinney-Vento Act mandates that school districts identify students experiencing homelessness, so they can access resources to help them succeed. However, the process of identification alone may be stigmatizing, pushing students away from access to resources with long-term positive effects on their lives.

Not all problems are sludge – but almost all sludge is a problem.

 Help Them Navigate: Bust ‘Complexity Sludge’

 For the Vision customers who faced a thick lease agreement and old wiring, complexity was likely a necessary part of the purchase. While not all complexity is necessarily bad, too much effort will lower people’s likelihood to reach their goals.

Complexity sludge takes many forms, such as repetitive processes or the need to switch devices to complete a process. To bust this sludge, businesses can pre-populate forms with information already gathered, explain reasons behind processes, and ensure everything can be done using one device or in one location.

A recent survey by VisaHQ showed that a simple travel visa application process is riddled with complexities including 30 different visas types, missing information about requirements, interactions with multiple consulates and outsourcing partners, and submissions in multiple formats.

Cheer Them On: Bust ‘Insecurity Sludge’

Even if Vision had made it easy for homeowners to get in the door or rewarded them for starting the long process of fixing up their new home, everything can still fall apart with insecurity sludge.

This sludge introduces doubt, leading people to wonder if they’ve made the right choice. Insecurity prompts regret, abandonment, and bad word-of-mouth. In the Vision case, it led to abandonment of the projects and half-finished eyesores in the community.

An overwhelming number of choices means people are more likely to question decisions, experience regret, and be less satisfied with what they have chosen. Businesses should give consumers control over the choices they consider and the amount of information they see. Spelling out the impacts that different choices might have on their lives give people confidence to make the right decision.

Lastly, insecure consumers want off-ramps so they can make choices without fear of long-term misery. Even feeling that they don’t have the option to leave can trigger the desire to bolt.

A Clear Path Forward

While former Vision customers will receive clean titles and restitutions, they have also learned an important lesson in sniffing out and seeing through some very thick sludge. For companies, Vision provides an important warning: Not all problems are sludge – but almost all sludge is a problem.

Fortunately, firms are being both encouraged and empowered to remove sludge. For example, the UK’s Office of Fair Trading’s investigation led multiple airlines to remove the “sludge” that previously obscured their actual pricing practices, leaving consumers with higher travel costs than anticipated. The Behavioral Economics in Action Center has released a dashboard to help firms find and reduce sludge. And those billions of paperwork hours? H&R Block partnered with researchers to pre-populate Free Application for Student Aid forms, helping people to complete the paperwork in less than 10 minutes. As a result, enrollment rose by about 30% for high school seniors.

Removing sludge may be a first step in making the most of marketing investments, and in seeing a clearer, faster path forward.