Cherry picking?

Reader question:

Please explain this sentence, “cherry picking” in particular – Charter schools are sometimes accused of cherry picking students to achieve better test scores than district schools.

My comments:

First of all, charter schools and district schools are all public schools in the United States. The difference is that charter schools enjoy better funding (sponsorship) and generally produce better academic results and accountability. Accountability means if results disappoint, questions will be asked and answered. In other words, heads may roll if teachers or administrators are found guilty of negligence or wrongdoing.

Sorry for drifting away from the focal point of discussion here - I took the time to explain accountability, you see, because it’s something rarely seen in this country. Or, put it another way, something we would like to see more often to be sure.

Anyways, sorry for being distracted. The focal point of discussion here is cherry picking. When charter schools are accused of cherry picking students, opponents are essentially saying that charter schools produce better academic results because they enroll better students.

In China, it is comparable to the same argument we hear once in a while that Beida and Qinghua produce better graduates because they have cherry picked the best students from throughout the country to begin with.

This is a moot point. I say we’ve got to give credit where it’s due and commend Beida and Qinghua for the work faculties put in. Besides, it’s not like they bring nothing but talented and honorable graduates into society. For all that I care to know, these two big schools produce their share of con men, crooks, criminals that wreck havoc to families and society at large.

The point is, got to give credit where it’s due.

Anyways, let’s get back to cherry picking. Cherry picking the term originates obviously from cherry picking in the farm, i.e. harvesting cherries by picking them up from the trees.

In suburban Beijing, in fact, this is the time for cherry picking. And if you go to one of these farms to pick cherries by hand, you’ll understand what it means to cherry pick. Farmers will instruct you how, as a matter of fact. They will tell you to pick only those that are red, ripe and bright looking. Leave others, the green ones, to ripen some more on the trees. In other words, don’t waste.

Hence and therefore, figuratively speaking to cherry pick is to be very picky and choosy, sometimes to a fault if you overdo it or choose only evidence that supports your argument and ignore other, real but unhelpful, facts and figures. At any rate, be careful with your choice because you may be free to choose, you may not be able to do what you want to later with the consequences of your free choice. Have to deal with the consequences of your choice also.

That is to say, be very careful with your freedom because, contrary to common Chinese perception, freedom is a lot of responsibility.

This is why we need accountability in this country. This is, I see now, why I took the trouble to explain this word in the very beginning.

Alright, here are media examples of cherry picking:

1. The idea of cherry-picking applies in a number of business contexts. It refers, for example, to customers who ignore products that are bundled together by a manufacturer (who in the process may disguise cross-subsidies between high-margin and low-margin components of the bundle). Such customers prefer to bundle their products together for themselves, selecting the best value (that is, cherry-picking) from each category of component.

An obvious example is the purchase of music systems. Manufacturers sell music sets, made up of an amplifier, a tuner, an iPod docking station, a CD player and speakers. But many music enthusiasts choose to assemble their own sets, buying their amplifier, CD player, speakers and so on, each from a different producer. Manufacturers try to discourage this by making the price of the complete set competitive. But earnest cherry-pickers can usually find discounted components that enable them to assemble something cheaper.

The term cherry-picking is also applied to the behaviour of new entrants into old industries, firms which try to choose their customers carefully. By calculating which consumers are profitable (and appealing to them while ignoring those who are not) such a firm can sometimes rapidly gain market share. In some cases, cherry-pickers are successful only because traditional firms in the industry do not actually know who their profitable customers are.

Service industries are particularly vulnerable. It is more difficult for them to measure the profitability of individual customers and customer segments. So they are never quite sure which they want to keep and which they want to get rid of. Successful cherry-pickers leave an industry’s incumbents with the least profitable customers. They also push up the price to those consumers who are not attractive to them. In car insurance, for example, cherry-picking in the UK pushed up the price prohibitively for young male drivers, the highest-risk group.

A bunch of new airlines set about cherry-picking when deregulation of the skies in Europe and the United States allowed them into the market. Within limits, they were able to choose which routes to operate on. They were unencumbered with the obligations that the traditional national carriers had had to bear in the interests of government policies on transport and/or regional development.

In banking and insurance, cherry-picking newcomers were able to undermine the business of old-timers in just a few years at the end of the 20th century. Firms such as Direct Line, a British telesales insurance business, rapidly won market share by focusing on a narrow (profitable) segment of the market and avoiding costly traditional distribution channels.

The success of cherry-picking emphasizes something known as the survivorship bias: the tendency of business analysts to judge the past by the record of relatively long-term survivors, ignoring those who drowned or came and went in the meantime.

- Idea, Economist.com, July 21, 2008.

2. The wait to be seated at a restaurant usually depends on the time of day you visit as well as the size of your party. But one study suggests it’s not that simple: Restaurant personnel may cherry-pick who to serve first, especially if given the choice between small parties and larger groups.

After surveying 263 individuals who worked in restaurants around the world, Cornell University researcher Gary Thompson found that 17 percent of respondents admitted to restricting or discouraging parties of six or more people from dining at their restaurant. He also conducted a simulation using 384 restaurant environments to look at when cherry-picking works as a business tactic.

In this case, cherry-picking was defined as routinely preferring high-value customers and denying -- directly or indirectly -- low-value ones. Such denial may come across as overestimating wait times, turning people away, limiting the times of day larger parties can dine or even giving guests a less diverse form of the menu.

Although the motives of the respondents weren’t recorded, Thompson writes that restaurants may do this because smaller parties usually spend more money per person and take less time to dine when compared to larger parties.

U.S. and Canadian respondents more frequently tried to provide guests with accurate waiting times, while Asian respondents admitted to overestimating times to discourage larger parties, according to the survey.

Yet cherry-picking isn’t always advantageous. When both small and large parties spend similar amounts per person and as well as take the same amount of time to dine, cherry-picking makes little difference and may hurt profits if guests feel alienated. Restaurant size, customers' patience for waiting and peak dining hours matter, too.

The research, published in the Journal of Service Research, is the first to analyze cherry-picking customers among restaurants. In the United States, the industry is projected to amass $604 billion in sales this year, according to the National Restaurant Association.

- Restaurants admit cherry-picking customers, News.Discovery.com, May 17, 2011.

About the author:

Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.