Complexity is costly for organizations. Do you know just how much?
Dealing with the consequences of complexity on a day-to-day basis is costly. Some managers have realized that simplification projects are a worthwhile investment. What about you?
Imagine the following situation:
Every year, the XYZ organization sends a letter to 50,000 customers demanding payment of a certain amount by a specific due date.
The document is long and difficult to understand. The organization is aware of this, but believes it lacks the time and resources to simplify the letters it sends to its clients.
Rather than addressing the root cause of the problem—that is, rethinking and simplifying the document—Organization XYZ has chosen to take a piecemeal approach to managing the impacts of this difficult-to-understand content. What exactly does this cost the organization?
Your image—an invaluable asset!
I am your customer. I received the document in question at home and have reviewed it. What might happen next?
Since I don't understand what's expected of me, I decide to do nothing. I either ignore it or put it off.
I don't understand, but I'm taking the initiative. I'm calling customer service.
I think I understand. I respond to the request based on my interpretation of the situation, but I make one or more mistakes because my interpretation turns out to be wrong.
After fumbling around trying to figure out what was expected of me, I filled out the application correctly.
No matter which path we take, one thing is certain: the customer in me is not at peace, and this state of mind takes a toll on the image of Organization XYZ.
In fact, while we retain barely 10% of what we read, the same cannot be said for the emotions we feel when we encounter a piece of content.
As a customer, I won’t soon forget the frustration, anger, discouragement, or sense of helplessness that welled up inside me the moment I read Company XYZ’s document. Not to mention the emotions I felt afterward when a problem arose. Ouch!
Recurring operating costs
Let's continue with our example. The document from Organization XYZ generates numerous organizational costs. Here are a few examples:
Sending one or more letters to follow up with customers who are delinquent on payments (HR costs, printing costs, postage, stationery)
Handling calls or emails in customer service (HR costs)
Error Handling (HR Costs – Customer Service, Accounts Receivable Department)
Complaint Handling (HR Costs)
Bad Debts (Cash Flow)
Loss of customers, etc.
If 20% of the 50,000 submissions require a response from Organization XYZ, and each response takes about 10 minutes, that amounts to 1,600 hours of work that the organization must pay for on a recurring basis. That’s the workload of a full-time employee!
In short, handling errors, questions, and complaints takes time and resources that are costly to your organization. Much more than you might think.
Thousands—or even millions—in savings thanks to simplicity
Numerous international projects demonstrate the economic benefits that result from simplifying contracts, forms, invoices, and letters. Here are two examples:
Simplified forms: $534,500 in annual savings.
These are the savings achieved by the Australian insurance company Capita Insurance Company after simplifying 17 forms. The project cost less than $100,000 and reduced costs associated with customer errors from $550,000 to $15,500 per year.Simplified invoices: Customers pay faster, and their questions and complaints are down by 25%.
These are the benefits British Telecom observed after simplifying its bills. Thanks to customers paying their bills more quickly, the company improved its cash flow and reduced the administrative costs associated with collection efforts. At the same time, the number of inquiries and complaints dropped by 25%.
Simplifying is an investment that pays off in the short term
Carrying out a simplification project costs an organization money. And we know that budgets are often limited. But the question is this: what does it currently cost you to go without it? Probably much more than the proposed project.
Simplicity is a strategic investment that yields significant short-term savings.
The first step in this direction is to conduct an assessmentof some of your content to gauge the scope of the task ahead. En Clair can help you complete this step, which is time-bound and highly insightful.
Simplifying is a strategic move. You can bet that you’ll be better off at the end of the process than you were at the beginning.
Learn More
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Sign up for our training course, “The Art of Clear Communication and Information Design.”
