Is rate still a differentiator, or has it become a proxy for poor experience?
In a world where convenience and time often come before money in everyday decision-making, does rate really still matter?
The easy answer is yes, it does. But that answer is incomplete.
Rate still influences behavior, but it no longer carries the same standalone power it once did. Consumers increasingly make decisions based on speed, simplicity, confidence, and effort before they ever compare percentages. The problem is not that rate has become irrelevant. The problem is that we continue to treat it as the most precise variable in a decision while accepting everything else as subjective.
Rate is easy to measure. Experience is not. That imbalance skews how organizations prioritize investment and how leaders interpret consumer behavior.
If rate were truly the dominant factor, the fastest-growing financial products would always be the cheapest, and the most efficient institutions would not win business from competitors offering slightly better pricing. That is clearly not what we see. What we see is consumers choosing familiarity over optimization, ease over marginal savings, and certainty over theoretical value.
What we need to understand is how rate interacts with the factors around it.
There has to be a quantitative way to understand the weight of convenience, friction, trust, and time, because those variables directly influence how rate-sensitive a consumer becomes. A consumer navigating a smooth, fast, and transparent process behaves very differently from one facing delays, handoffs, uncertainty, or confusion. In the first scenario, rate becomes a secondary validation. In the second, it becomes the primary justification.
When effort increases, price sensitivity increases. When effort decreases, price sensitivity fades.
This is why organizations that invest heavily in speed and experience often retain pricing power even in competitive markets. They are not ignoring rate. They are reducing the consumer’s need to optimize it. The decision feels easier, safer, and more predictable, so the consumer stops searching for a marginally better option.
Until we can measure friction with the same discipline we apply to rate, we will continue to misdiagnose why consumers leave, why they hesitate, and how they shop. Rate is part of the equation, but not all of it. The real differentiator is how much work a consumer has to do before rate even becomes relevant.