How the relentless focus on efficiency drives poor customer experience

Back in early 2008 I met up with Bob Greenberg – the founder and CEO of R/GA the digital agency renowned for their work on Nike+.  Prior to meeting Bob I had studied his background and had come to the firm view that Bob is a genius.  So I was surprised when Bob shared with enthusiasm how he was going drive up efficiency by introducing video conferencing  and thus cutting out all the cost and time wasted by people travelling between offices.  This is identical to the argument used by many in the CRM field and now in the Customer Experience field!

I cautioned Bob that as you drive up efficiency you drive down effectiveness. I mentioned that should focus on effectiveness and accept a certain level of inefficiency: that they go together like two ends of a stick.  He looked puzzled and I could not get my point of view across convincingly even though I just knew that I was sharing a valuable insight with him.

I have struggled to convey this insight to executives working in the realm of customer experience improvement.

Then a couple of days ago I received the latest newsletter from Vanguard.  In this letter they shared a story that a reader of theirs had shared with them – a story that beautifully explains how you drive down effectiveness (the customer experience) as you drive up efficiency:

“I’m a reader of the systems thinking review, and a trade union rep in the public sector with responsibility for a helpline. I find myself arguing with managers who are keen to manage performance using metrics for advisor availability, utilisation, call length, and adherence to roster.  I recently had one of those moments where the penny drops; it was in relation to the management of efficiency.

I was staying in a Hotel, a 20 storey building with two lifts. The restaurant was on the 1st floor, and each morning I would travel down from my room on the 14th floor to the restaurant for breakfast, afterwards I would return to my room to brush my teeth and pick up my papers, and then travel down to ground level and go to my training course. For most of the week one of the lifts was out of order, and the service from the single lift was pretty rotten, you had to wait and wait, usually with other hotel guests stood around tut-tutting and sighing.

Towards the end of the week the second lift came back into service and I noticed something surprising (to me at least.) With two lifts I’d expect the service to be twice as good, waiting times to be halved. But the improvement seemed much better than that. Basically you pushed a button and the lift came. The improvement was huge – though I can’t say I stood around with a stopwatch gathering detailed stats on how two lifts performed compared to one.

As I thought about this, something else occurred to me. The single lift system was much more efficient than the two lift system, from the point of view of the lift and the use of “lift resources”.  With one lift out of order the remaining lift was in nearly constant motion. It started at the bottom picking up passengers waiting in the underground car park, then at street/reception level and then at the restaurant on level 1. It then travelled upwards, dropping the passengers off at their floors. Once it reached the top it changed direction straight away to start picking up the passengers who were by now already waiting to go down, stopping several times to pick up a number of passengers, and of course dropping them off at various lower levels. The lift was highly “available” it was working all the time, and it was highly “utilized” maximizing the number of passengers riding on each journey. But as I said before the service was pretty rotten for the passenger.

Improving the efficiency of the lift would not improve the service to the passenger at all – in fact it could only make it worse.

For me it was one of those – “Oh now I get it” moments.” One lift represents economies of scale, two lifts economies of flow. Concentration on individual unit efficiency can lead to a worse service, and if you try to improve things by going further down the route of more and more efficient use of resources, service will get worse and worse.

As a result of this story I am more able to share my insight with the next executive that I meet.  Thank you, to whoever shared that story with Vanguard.

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.

5 thoughts on “How the relentless focus on efficiency drives poor customer experience”

  1. Great illustration – almost metaphorical (driving one Up, the other Down : )

    It has been proven many times over that a good customer strategy (which, among other things, involved differentiation) results in optimisation of both customer experience and resource utilisation. The keyword is optimal: optimised customer experience (always a matter of perception) means improved for a majority of customers, especially for those that matter more (!). Optimised resource allocation and utilisation means efficiency – and cost reduction (!) – coming automatically and naturally as a consequence of being customer-centric, rather than in conflict with that.

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    1. Hello Vladimir
      I thank you for your kind feedback – it makes a difference (to me) that you find the post useful. And that encourages me to continue writing.

      Maz

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  2. Nice post, Maz, about how counter-intuitive it can be to provide the best value for customers. An interesting follow-on would be to explore how to mix approaches and give customers a choice to drive up effectiveness and efficiency. Some people, for instance, would rather not talk to a live person to resolve a technical issue. Providing alternative and arguably more efficient solutions like FAQs, user forums and chat lines actually improves customer “happiness” for a portion of a company’s user base.

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    1. Hello Dave, thank you for reading the post, dropping by and sharing your perspective.

      Your timing and your suggestion on writing the related post on how to get the right balance between effectiveness and efficiency by using the right technologies is great. I was thinking of writing a post on who to make ‘treating different customers differently’ actually work – from a customer perspective: technology, choice, effectiveness and efficiency will play a role in that.

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