Customer Experience Management (CEM)- Efficiency Relationship Paradox

efficiency relationship paradox

Q. What is the efficiency relationship paradox?
A. The efficiency relationship paradox is a depiction of the catch 22 cycle that most organizations are in. They waste millions of dollars recruiting customers through expensive campaigns and then as the customer demonstrates both emotional and financial interest, they drop the level of service in the name of 'profit maximization'. In the process companies frustrate the customer and force him/her to defect. Over time this process increases the cost of new customer recruitment and decreases the revenues per customer. The source of this vicious cycle is the treatment of the customer as a one time acquisition and not as a long term journey/relationship. As such they try to form a relationship on the basis of an efficient operation. The problem is that efficiency and relationship are two conflicting strategies. Over time the cost of recruiting new customers grows due to the large number of frustrated customers who act as a counterforce to the company's marketing efforts.

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