Out of the Box

Efficiency and Marketing

By Menachem Lubinsky on August 09 2009

A Brooklyn take-out store has a pretty good idea of the demand for Cole Slaw on a Thursday evening. It prepares an adequate supply of the salad in various sizes. He has the system down pat and rarely is left with much pre-packaged Cole Slaw or for that matter some of his other foods. A Virginia restaurant can predict how many steak dinners it will serve on a Wednesday evening. It has kept a computer log of the demand for various items on the menu for nearly a half year. The effort was quite worth it as the restaurant was able to purchase better and to be prepared for customers. Starbucks recently announced that it was eliminating some of the preparation time for the coffee, instead opting for advanced prepping, as it is called. These are all examples of increased efficiency that is designed to reduce cost and in the case of a large chain like Starbucks result in trimming staff at each one of its 11,000 stores. Marketers have long debated whether such moves in the end damage consumer confidence in a brand or institution. For example, does the customer respond better when the Cole Slaw is scooped out of a large tin right in front of them? Or, is the customer more apt to respond positively to any system that gets him out of the store more quickly? Does the customer even appreciate efficiency? Has the Starbucks customer gotten used to seeing the clerk busily prepare the coffee instead of reaching for prepared ingredients?

Increased efficiency could lead to healthier profits but it also could be spun as a benefit to consumers. Whenever the take-out store is asked about the freshness of the pre-packaged Cole Slaw, it reassures customers that the containers were filled in the last few hours but also points out that the increased efficiency streamlines cashier lines. The store manager says that he is prepared to scoop out the Cole Slaw whenever a customer seems to be overly skeptical or when asked to do so.
For Starbucks, the new efficiency means that there will be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain and no more dillydallying at the pastry case. Starbucks says the efforts are already helping its bottom line, as shown by quarterly results that beat analysts’ expectations. Still, some baristas fear the drive will turn them into coffee-making automatons and take away some of the things that made the chain different.
Pizza stores and bakeries have learned long ago that boxes can be assembled in advance and not while the customer is waiting. One large Brooklyn pizza shops brings in inexpensive overnight labor to prepare the boxes. Customers, he says, seem to notice efficiency and especially appreciate it if it cuts down on waiting time.

Many grocers have taken a closer look at efficiency of late, adding rotating bag holders to the checkout lines. Self-checkout has also been added in many retail establishments as a cost cutting measure as well as an effort to reduce lines. Pre-scanned coupons are also helping move lines as well as efficiency.

I recently read an article about the marketing of efficiency. In other words, should you tell your customers that you have streamlined a certain system? The author thought not, because “customers do not look at it as something done to help them; they kind of expect it.” He also said that flagging one innovation can only put a spotlight on systems that may be weak.

In these days of recessionary cost-cutting in an effort to realize a healthier bottom line, it isn’t easy to tell consumers that a system has been improved to help them. A Midwest bank found that out when they reduced the number of tellers, installing instead a number of banking kiosks for deposits, quick cash, and money transfers. Most customer surveyed about the changes seemed to say “great, but where are the tellers.” Automation has its limits with customers desperately looking for a human face in conducting business.

Automated phone messages have been a blessing for many but a significant number of consumers say that they would much rather relate to a human being. The author opined that “relying heavily on automation as a marketing tool can have negative consequences.”

Marketers say that in many respects the customer still enjoys being fussed over although he would not mind if it was done quickly. It remains to be seen how Starbucks customers will relate to the changes in the stores. Some coffee shops that used to offer free wireless connections have decided to curtail the service as many customers sat in the cafes for hours on end and spent little or nothing on cafe products.

The evidence seems to be clear that customers like increased efficiency with a big but. If it means less personal touch, then they seem to be against it. If the efficiency in any way compromises on the quality of the product or service, then they would rather not have it. In any event, that seems to be the guide for marketers as they debate the wisdom of marketing efficiency.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.