Efficient Isn’t The Same As Best

We are obsessed with improving how efficient we are.  When an FMCG company is bought the first things the new owners do is look to cut costs through supply chain efficiencies, redundancies (workforce efficiencies) and economies of scale (purchasing efficiencies).  It is a way of squeezing higher margins from the same products.  Bigger margins equate to bigger profits.  Everyone is a winner right?  Well, maybe the shareholders win… at first at least.  Rarely do these efficiencies actually make those products better or more appealing for their existing or new customers.

But what if we start thinking beyond our pockets and our ever-ticking watches?  Delivering shareholder value through cost-cutting often results in a short term fix which is not sustainable long-term.

Look at Tesco and the recent horse meat scandal.  Tesco cut costs, cut costs, cut costs.  Raising their margins on meat meant having to find new supply chains which eventually meant losing control over the quality of their end product.

Tesco Horse Meat Scandal

Trust of Tesco’s bargain meat is at an all-time low and customers who can afford an alternative are voting with their feet and spending their money elsewhere.  In fact the horse meat scandal wiped £300m off Tesco’s market value.  The shareholders aren’t so happy with that.

Cutting costs in a bid to be more efficient eventually meant being less effective as a business.  The short-term increase in profit margins from meat is today offset by the fact that people aren’t buying from Tesco.

When Henkel in Germany, quickly followed by Unilever in the UK, first launched toothpaste pumps in the early ‘80s everyone thought it would revolutionise the toothpaste market.  “Death of the tube!” was proclaimed.  It was innovative; it made getting toothpaste out of the tube simpler and shaved milliseconds off your daily oral hygiene routine.

Although it was marketed as being economical due to the fact that each squeeze was consistent, and simple as an application, the problem came because instead of leaving just a tiny fraction still in the packaging – which happens with traditional toothpaste tubes – people where leaving over 12% behind in the tube which eventually ended up in the bin.  12% after 12% after 12% adds up.

Colgate Toothpaste Pump

In addition to the wastage there was also the increased cost.  Toothpaste at the time was roughly £1.00 for 125ml from traditional tubes, but with the toothpaste pump it went up to £1.20 for 100ml.  That is 50% more expensive.  And that is a lot to ask when the consumer is getting less out.

Was the toothpaste pump efficient?  Well, yes from a time and ease of use perspective, but if your objective was to make brushing your teeth cheap and less wasteful then it was a huge failure.

The same thing happens every day in marketing.  Time efficiency and cost efficiencies aren’t always able to deliver the results we want.

I use Hootsuite to schedule the vast majority of my Tweets.  It is an incredible time saving tool.  I can spend my commute reading articles and then schedule the interesting ones to be posted on Twitter throughout the coming days.  This means that I don’t have to keep manually going on to Twitter and sending something out or sending multiple posts out at the same time.

Hootsuite is amazing.  I highly recommend that everyone uses something like Hootsuite or Buffer to schedule your Tweets and social media posts.  However I know that if I want to make a big impact with a specific post I need to manually login to Twitter, Facebook and LinkedIn to post my updates.  The wording, the length of the post and the images need to be done differently on each platform to get as many views, clicks, shares and interactions as possible.  To be more effective I need to pass up some of this efficiency.

On LinkedIn I can post a status update and send it directly to my Twitter account.  But I haven’t got a character limit on LinkedIn so I’m likely to exceed my 140 characters for Twitter and not realise.  Now I’ve made my Tweet look messy and difficult to read.  To be more effective I need to pass up some of this efficiency.

Similarly, with job multi-posting tools we aren’t always being as effective as we would want.  When you are sending a job to LinkedIn you are sending it onto a platform where the audience is 80% passive.  That means that people are going to interact with your roles in completely different way to how they interact with your roles on a job board where they are almost always 100% active.  The message to an active job seeker needs to be different to what a passive job seeker is interested in seeing.  Realistically if I want to see better results I need to think about my audience and write job descriptions accordingly.  To be more effective I need to pass up some of this efficiency.

Look at your objectives as a business – how efficient and how effective are you at achieving these through your current marketing activities?

Vintage weighing scales

If you are just looking at cutting cost or saving time you might be missing out on the opportunity of yielding the results you want.  Thinking back to the toothpaste pump; how much are you leaving in the tube as a result of trying to make everything quick and easy?  How many loyal customers are you driving away by making your product and service so cheap to produce that it is unrecognisable to your target audience?

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
John Wanamaker 1838 -1922.  Marketing pioneer.

It is difficult to attribute sales success directly to advertising and marketing. Although not all of your advertising is being effective or potentially efficient is it time to just switch everything off?   Efficiency and effectiveness can be looked at through many different lenses so I’m not saying that there is a hard and fast rule that every business should follow; however purely looking at how to make things easier, cheaper and faster isn’t going to be the answer.

Of course you must run your business efficiently so as not to waste your money or your time.  It would be absurd to claim otherwise.  We only have 24 hours in a day and a finite amount of money after all.  Yet there is a balance to be had between efficiency (cost and time), effectiveness and the final results you wish to achieve.  I urge you not to measure efficiency without first understanding how effective you are being.  Don’t be efficient to the detriment of achieving real success.

1 Comment

  1. Genco Orkun Genc

    May 15, 2014 at 10:51

    Brilliant article! Got some very valuable ideas and I will make sure to translate some parts to Turkish and share with my customers. Yes it will take some time but yes I think it will be efficient. Thanks for the inspiration.

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