Diminishing Marginal Utility: Detrimental CX

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Customer experience is like drinking tequila shots. A couple will increase your happiness, but a dozen will not.

When does brand experience become too much — and therefore detrimental?

In this episode, we hear from Tyler Meema, Director of Client Success at Wealthsimple, about the creation of the client delivery curve framework to track CX equilibrium.

Join us as we discuss:

  • Brands and diminishing marginal utility
  • Tracking opposing metrics to ensure equilibrium
  • Focusing on business outcomes instead of the “surprise and delight” trap

Ready to explore the line between valuable and detrimental automation? Let’s go!

If it's not driving value, you're throwing money in the garbage. That's why paired indicators and driving client outcomes is so important.

Building brand experiences and diminishing marginal utility

Tyler’s most memorable customer experience didn’t happen to him but to a pair of newlyweds beside him on a plane — they were on the way to their honeymoon and brimming with excitement.

“I wanted to do something nice for them. So I went to the galley to talk to a flight attendant,” Tyler recalled. He thought maybe a little bottle of champagne, something to help them celebrate.

A few minutes after returning to his seat, the flight attendant came over, congratulated the couple on their marriage, and moved them up to business seats.

“They took this couple from the back of the plane, all the way up to business, and got free food, free drinks. I bumped into them on the way out of the flight. It was incredible how excited they were about this experience,” Tyler said. 

A genuinely impactful brand empowers its people to create memorable customer experiences. 

How does this tie into diminishing marginal utility?

A key aspect that made the above story so memorable is the freedom the customer service representative had to deliver an above-average experience. That freedom can be affected by how a brand is utilizing automation and other “experience-enhancing” tools. 

Tyler has intimate knowledge of what is known as the client delivery curve and shared his view on how that impacts brand experience. “The client delivery curve comes from economics. It's a principle called diminishing marginal utility,” Tyler explained.

“The base concept is, in economics, we all assume that we're utility-maximizing economic agents, and what that means is we have resources, we consume them. Every time we consume, our utility goes up. Utility is equivalent to happiness, and it reaches this apex,” He continued.

This is where the tequila reference begins to make sense — a few are fine to kickstart the night. Eleven…well, not so great anymore. Once utility reaches that apex, the only place to go is down. 

One example of automation going too far is a specific experience Tyler had with IVR. “I was responsible for calling financial institutions to follow up on transfers, clients trying to transfer money from one institution to our institution,” he explained. 

He would get stuck in “robot voice” calls and have no contact with a live person. 

Tyler reflected on how there was probably a manager at that company celebrating that they deflected a ticket. That thought propelled him to ask, “When do you go too far?” 

And from there, the framework for the client delivery curve comes into development: 

“Which basically is two-axis client experience on one axis scale on the other axis. And it follows this principle of diminishing marginal utility, where every incremental unit of scale that you introduce into your customer service ecosystem will improve the client experience, but then it reaches this diminishing returns level.”

And that’s the point that the robot voice call had reached. “They've fine-tuned this thing so much that it is actually having the opposite effect that you wanted to have, which is like, yes, it scales really effectively. But it's not delivering the client experience that you want to create.”

There lies the issue of prioritizing numbers over the customer experience.  

Every incremental unit of scale you introduce into your customer service ecosystem will improve client experience, but it reaches a diminishing returns level.

Tracking opposing metrics to ensure equilibrium 

There needs to be a Northstar in the customer experience, something that drives decisions and hits main targets. A solid CX plan should be:

  • Affordable
  • Scalable
  • Good for the customer

Tyler asks the ever-relevant question, “What do we want to create?” and goes from there.

Defining the goal

“It’s important for C-level executives to care about client experience, to help set the direction for all of us that work in the business,” Tyler explained.

“Think about and define 'what is the client experience that we're all trying to achieve?' And then, 'how do I fit into achieving that experience?'”

Determining outcomes

“It's equally important to think: what are we actually driving in terms of outcomes for clients?” Tyler continued. 

This other side of the equilibrium is entirely people-focused. How does the system impact the outcome of the customer; what are they walking away with?

Why it makes a difference

“Customer service managers and leaders should really be thinking about, 'Okay, how do we influence important outcomes for our clients in their journey?' Because, guess what? They are calling us, they're chatting us, they're emailing us, they are engaged,” Tyler stressed. 

“And I truly believe that we have the opportunity to actually create a good experience that delivers this other value that we're ignoring because we're not looking at it. So we default to the things that we think that matter, which is speed, quality of interaction, and that's about it,” he continued.

What is a brand experience that destroys value?

Focusing on business outcomes instead of the "surprise and delight" trap

“The easiest possible way that leaders can utilize the client delivery curve is by just plotting what they're doing,” Tyler said.

A roadmap can show more than markers and milestones. It can help plot the course of your customer experience through the intentional implementation of automation mixed with outcome-driven initiatives. 

“Where do they think they follow the curve? And if they're being intellectually honest, it'll give them the answer."

It’s about more than the number of — for example — units manufactured, it’s about manufacturing to a sufficient quality that provides what the customer is looking for. 

On the other side of that scale, you can get too invested in little “surprise and delight” touches that may not have any impact whatsoever. 

There’s a time and a place for surprise and delight — just like there’s a time and place for automation. The key element is being intentional about what's automated and what’s manual, always with the customer outcome in mind. 

Get in touch with Tyler via tylermeema@gmail.com 

Lynn Pine
Lynn Pine

Lynn’s career has spanned across different kinds of content, from copywriting, to journalism, to marketing, and even mystery puzzle games. She brings facets from all these disciplines into her work at Ada. Outside of that, Lynn loves playing games, hiking, and reading about trees.

More info about Lynn Pine: LinkedIn

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