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Efficiency ≠ Effectiveness!

04 Feb

I spent quite a lot of my career in radio advertising. It used to be true, and I presume it still is, that the chief means an advertiser uses to determine how much he or she is willing to pay for radio time is a tool called “Cost Efficiency.” The precise metrics and parameters may change but the concept remains the same: the buyer sets a Cost Efficiency goal which is 100% based on audience ratings — answering the basic question, “How much am I willing to pay to reach this audience?” Radio stations then compete to meet that goal: either you’re sufficiently Cost Efficient and you make the buy, or you’re not and you don’t. No hard feelings. The numbers don’t lie.

Well…they may not lie, but they do exaggerate.

Cost Efficiency only works, in my experience, for three reasons. First, it’s fairly easy to teach someone to put together a buy using some pre-determined Cost Efficiency goal as the standard. Second, a Cost Efficiency goal at least creates a level playing field, evaluating all contestants using a common standard — the device may be flawed but it’s consistent. And third, I suspect most advertisers don’t really know if their advertising actually works or not. J.C. Penney once made the famous statement, “I know that half my advertising dollars are wasted — I just don’t know which half.” People thought he was kidding, but I’m convinced he meant it. Drawing a straight line between your advertising and your cash register is a tricky business!

In other words, an advertising buy may look good on paper — it’s highly Cost Efficient — but it may not accomplish the advertiser’s goal very well at all. It’s not very Cost Effective.

I think there’s an underlying mistake we tend to make frequently in our culture — we confuse efficiency with effectiveness. The two ideas are far from synonymous. In your workplace, if you’re a manager, you may be tempted to make decisions based entirely on efficiency only to discover that what looked good on paper actually results in frustration, fatigue and burnout. Your plans aren’t effective at all! If you’re a parent, you may think scheduling your family time “efficiently” is the highest goal, only to experience a growing emotional disconnect between you and your kids, or you and your spouse. Important concepts like friendship, love, teamwork and commitment simply can’t be done “efficiently.” The process of cultivating the things that are most important in life  — our relationships — is inherently messy, ragged and inefficient. (Speaking of messy, is there an “efficient” way to raise kids, for example?) You could almost say, when it comes to relationships, that Efficiency is frequently the enemy of Effectiveness.

Sometimes as fundraisers or salespeople we have a choice: we can focus on what’s Efficient or we can emphasize what’s Effective. It’s efficient to send out the same letter to 500 recipients — it’s effective to hand-write 20 personal notes. It’s efficient to send 300 eblasts — it’s effective to make a dozen personal phone calls. Each can be important, and at times those ideas of efficiency and effectiveness can mesh nicely — but at those times where they don’t, I suggest that it’s better to be effective than efficient. What do you think?

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Posted by on February 4, 2014 in Uncategorized

 

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