Before the industrial revolution, everything was handmade. You understood that any product took labor to produce. After machines improved our efficiency, you only paid for handmade goods if you wanted an artisanal product.

Today, would you pay for a handmade car? Ferraris are famously somewhat handmade. But they aren’t for everyone. Ferraris aren’t made inefficiently, they are made uniquely, and in small batches. Customers want to pay for that kind of product. Rolex watches are hand assembled. No one would line up for a $100,000 Toyota Corolla, though.  

People are wired up to spot inefficiency. “Why are they doing it THAT way?” This includes employees and customers. When you see a clerk pull out one of those old-fashioned credit card apparatuses that rub the card number on to a carbon-copy paper you cringe, right? Can this possibly be happening?

Credit card rubbing device

Deep down, you say to yourself, “is this company serious?” Given the option of equivalent products, people will choose the store that has the normal card reader. And in the future, even that will seem outdated. Why can’t I pay with my phone?

What are some of the other inefficiencies that are common today?

  • Do your customers have to fill out paper forms instead of digital ones?
  • Are you unable to customize your customers’ experience by understanding who they are?
  • When you offer products “they might also like,” are you making it up or is it based on data?
  • Are you unable to answer questions quickly because your systems are set up to answer common questions?

This past winter I took my family skiing. We needed to rent skis and boots for the kids. The line was long, but what could we do? When we got to the front of the line, we discovered that the lin we were in was for boots only. The ski line was the other line. 2 hours later we made it on to the slopes. My impression of that organization? Not organized. The business is set up to work how they want to work, not how I want to buy. As a result, I don’t plan to go back. 

Look at your company and ask whether what you do is a luxury, handmade product like Ferrari, or if you are selling something that costs too much because of inefficiency. Customers can spot it and they will punish you for it. 

What’s the solution?

Shop for what you do or make. How do others do it? What can you learn from others’ successes? Work to stamp out your inefficiencies before your customers find them. 

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