"Freakonomics" coauthor Steven Levitt was consulting with a tech company with a difficult problem.
"The question they were asking was: How can we reduce turnover to keep our subscribers for a longer period of time?" Levitt recalls. He suggested they look at the data.
Levitt and his team discovered a quizzical trend: Frequent users of a subscription product were canceling their subscriptions. But why?
Digging into the data, Levitt found that there were customers who used the product frequently, but when they tried to renew, they ran into a credit-card failure.
"No one understood this," he says. "It was in the data, but no one had thought to tunnel down in that exact way."
The company made an intervention and retention spiked.
"It wasn't that they didn't have the data to come to the conclusion," Levitt explains. "It's just that it's rare for people to have the patience to look at the data before trying to solve the problem instead of immediately reacting to a perceived problem."