A Shock to the (Business) System
Usually seen as a funny prank, especially when it is on video, is the chair that falls over when a leg is kicked out. Whether three legs or four, that chair is set up to balance the load across all of them in a specific way. When one of those legs fails or is quickly removed, it falls. It can create quite a shock to the system when it happens to you.
One of the many impacts of the pandemic in 2020 has been on businesses. The “non-essential” retailers have been required to close their doors, travel was at a standstill for quite some time and even restaurants – though an essential business – had to modify service which impacted both costs and revenue. Certainly a shock to their systems.
On the other hand, there are some businesses that have greatly benefited from these disruptions. An easy one to point out is food and restaurant delivery apps. I think most everyone would agree that this is the right service at just the right time – and certainly was a welcome infusion of revenue to their top line.
Strong Growth, Profit and Customer Experience?
One of the compelling discussion points behind all these food delivery services is that, while experiencing strong growth, they still are not making a profit. The outlook is bleak as well (as you will see in this example). Why? They are not looking at the experience. While the service is filling a requirement right now, they have not really taken the time to listen to their customers. One may feel that the apps request an assessment of each customer after each order, but those are not the only customers.
When reading industry news, the two biggest complaints about these companies is 1) how they treat their delivery agents and 2) how they treat the restaurants. While any business model only works when you have paying customers, you also have to deliver on the product. In this case, the delivery is delivery and the product is the restaurants providing the meal. It should be noted, that when times were good, these companies were asking more from restaurants that were already squeezed because of the pandemic and giving less to the delivery agents who were struggling to get a little extra income. With the latter, there was even a big push by these companies in California to ensure they would be contractors and not employees. Regardless of the politics behind these initiatives (I can see both the good and the bad that can come from it), there was a reality that even while these companies were squeezing more from customers, delivery agents and restaurants, they still won’t be able to turn a profit in a year that should have been a banner year for them.
Shared Experiences Matter
Perhaps the biggest lesson from all this is taking the time to understand customer journeys. It is important to look across the entire experience spectrum and understand where the process could break down. Much like the bicycle needs both wheels and the chain to connect the pedals to the tire, a business needs to optimize all those touchpoints to make it go forward. One might say that the restaurants and delivery agents are more like employees, but even then you should be understanding the employee experience for them – they are part of the journey. Ultimately, all these pieces have value in the journey and each piece needs to see a positive value proposition. Without providing that, the business is metaphorically kicking out one leg of a three-legged stool.
Each business situation will vary, delivery agents in one company may be seen as employees or resources in another, it is vital for a company to understand how each fits into that value equation in the marketplace. It is also important to measure and understand the expectations and attitudes of all stakeholders, otherwise, that chair you are sitting on may fall.