Esteban Kolsky
ThinkJar LLC


Continuing on this series of posts related to knowledge management that Coveo is helping me promote (the first one is here), I want to talk about efficiency versus effectiveness.

If your organization is like most out there, you have spent the better part of the past 20 years making sure your customer service organization runs like clockwork.

You have invested in a multi-channel solution to be able to respond to customers across all channels, and a workforce optimization system to ensure that your employees are always available when needed. You keep track of the great job they are doing, and you continuously focus on getting all metrics to be the same as other organizations. In other words, you are running a streamlined, hyper-efficient customer service organization. Right?

That is great. Your timing is perfect, as you are now ready to focus on how to run not only an efficient but an effective customer service organization.

What is the difference? Let me take you back in time to set the stage.

Back in the 1970s when the first call centers began to emerge, they were considered a cost center. No organization provided customer service because they wanted to – they did it because they had to. Thus, they aimed at the cheapest, lowest cost solution they could provide. As the economy shifted to a service economy in the 1980s, call centers became more pervasive – and also more used (and therefore more expensive for organizations to operate, especially since now they had toll free numbers to pay for as well). The shift to make the call center the most efficient possible (read, the lowest cost per transaction possible) carried right into the 1990s and early 2000s as contact centers began to emerge (we can cover why this was so wrong and a bad idea in a later post).

Most organizations are still stuck in the old model of making their customer service operations ultra-efficient. This was not a major problem until about five years ago.  When the “age of the customer” started in the late 2000s with the advent of social networks and customers reclaiming their voice and control of the conversation, they also demanded that organizations become more customer-centric. That was the tipping point; that was when efficient contact centers needed to become effective contact centers.

Efficiency is about running the leanest organization at a low-cost. However, this is not necessarily what customers want.  Effectiveness is about delivering the “Three Rs” of effective customer service and this is what customers want and need: Right information. Right Channel. Right Time.

An effective customer service solution centers on always finding the right information, the right knowledge, at the right time, every time regardless of channel (or at least the ones that make sense). This is why the most important aspect of an effective contact center is the access to this data and knowledge in a timely manner – not merely being able to “be there where customers are.”

I have been writing about the shift in knowledge management for some time as I pointed out in my last entry, but I have not mentioned, until now, why this shift was necessary.  Becoming hyper-effective at customer service requires access to the right knowledge.  As the world becomes more complicated and the necessary knowledge is no longer stored in knowledge-bases it is becoming imperative to be able to find the people with the information in real time, tap into their knowledge, and provide that back to the customer on time to solve their problem.

This is the new model of knowledge management, and the absolutely only thing you need to make sure you have if you want to deliver the “Three Rs” of effective customer service.

Knowledge, when needed and as needed.

Are you finding this is your newest challenge in customer service? Are you delivering against it?

Would love to hear what you are doing about becoming an effective customer service operation – but more so, what you are doing about ensuring the right knowledge is in the right place, at the right time.

TSIA report

About Esteban Kolsky

Esteban Kolsky is the founder of CRM intelligence & strategy where he works with vendors to create go-to market strategies for Customer Service and CRM and with end-users leveraging his results-driven, dynamic Customer Experience Management methodology to earn and retain loyal customers. Previously he was a well-known Gartner analyst and created a strategic consulting practice at eVergance.

Read more from this author

  • Hi Esteban:

    I don’t see this as an either/or situation. I believe that smart companies have always looked to balance efficiency and effectiveness to make holistic business decisions based on the net short and long term value to the organization.

    Unconditionally focusing on reducing costs OR making customers happy without thoughtful analysis is totally irresponsible to shareholders.

    Getting people to great answers fast is certainly important, but even there the benefits need to be weighed against the costs for each particular set of circumstances.

    As an example, and one that we have discussed many times before, it does not make sense for most businesses to provide support directly through Twitter and on a Facebook wall, which is contrary to the pervasive marketing hype focused on increasing vendor revenue rather than making sound, holistic business decisions.

  • Chuck,

    I guess you know more smart companies than I do since I don’t know too many that are understanding, embracing, and adopting effectiveness. You’d be surprised at how many organizations still consider CS a cost center and something to keep efficient – even in face of customer’s protests about it.

    Wish it was simple to do both, which i agree should be a goal, but it is not if you don’t understand both.

    Hope this gets some of them started on the real road to customer-centricity – understanding that customers want effectiveness, not efficiency.

    Thanks for reading

  • Esteban – Excellent post. I think you are right in your observations up to a point. First, there really is no debating the need for knowledge management to ensure a more effective service in any scenario. Second, thinking about the continuum between efficiency and effectiveness makes me think about that between high volume / low complexity and low volume / high complexity service operations. Coming from the enterprise technology side of the spectrum (low volume, high complexity) I have always looked at the need for efficiency as defining the boundaries of the playing field for the organization. Being effective and delivering results is up to the services management team, setting the rules of the game and the roles individuals play. However, in the high volume / low complexity side of the spectrum things are likely different, where efficiency is the only thing that matters and effectiveness is taken for granted.


  • There is certainly a shift going on that hasn’t been embraced by all organizations. The voice of the customer can make or break a business today. The organizations that are willing to invest in the technology to do so and form actionable insights with the data they find are the ones that will thrive.

  • Just chiming in on this great conversation. Chuck I agree with you – it’s not and either-or equation. However, satisfaction increases and efficiencies are not mutually exclusive. There are strategies and technologies — such as unified indexing — that can effect both simultaneously, by injecting the right insights into customer interactions within the right context, at the right time.

  • Pingback: Coveo Insights()