What is business friction and how much money does it cost companies each day?
In this article, we’ll learn what business friction is, how it affects customers, how it affects employees, and, ultimately, how it impacts the bottom line.
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What Is Business Friction?
Friction is resistance.
This definition comes from physics, and usually refers to the resistance that occurs when two surfaces are rubbed against one another.
However, in business, it refers to the resistance that occurs during normal business processes.
Friction is often discussed in relation to two groups in the business world:
Technically speaking, friction can occur for other stakeholders, such as business partners or investors.
However, since customers and employees are often those most impacted by business friction, it is a good idea to focus on these two groups first.
Below, we’ll look at three examples of how business friction can impact each group.
3 Examples of Customer-Oriented Business Friction
Customers are the lifeblood of any business, which is why most people discuss business friction as it applies to customers.
Reducing that friction is crucial to maintaining customer loyalty, building strong customer relationships, and boosting customers’ lifetime value.
Here are three examples of business friction that can negatively impact the customer experience:
Poor customer service
Many studies have shown that bad customer experiences can quickly drive away customers.
According to PwC, for instance, in the United States, one bad experience can drive away 17% of customers – and several bad experiences can drive away 59% of customers.
Customer service is a crucial stage in the customer life cycle. And, like any other part of the customer experience, it can be positive or negative.
When considering how to reduce friction in customer service, it pays to focus on a few concepts, such as:
- Simplifying the experience
- Maximizing efficiency and speed
- Staying immediately relevant
Many of these fundamental concepts hold true across different areas of the business and the customer experience, as we’ll see below.
Ineffective product onboarding
Every new software product carries a learning curve.
When customers first begin using a product, they must:
- Grasp the product’s core value proposition
- Learn the product’s basic features
- Begin using the program productively
As with customer service, onboarding experiences should be simple, seamless, and efficient.
The more quickly users can gain value from a product, after all, the more likely it is they will continue using it.
There are several ways to improve the user onboarding experience.
Here are a few examples:
- Engage customers with email follow-up
- Provide self-service technical support solutions
- Offer automated product tours and walkthroughs with DAPs
Done well, product onboarding can be a satisfying experience that boosts customer value, longevity, and profitability.
Product usability refers to how easy a product is to use.
Usable products are easier to:
Less usable products, on the other hand, are the opposite.
They are more difficult to learn and to use, and users often make more mistakes.
A software program with a non-intuitive interface, for instance, can become a source of frustration and friction. In turn, more users will abandon the product, decreasing the product’s performance in the marketplace.
Again, as with the other points mentioned above, frictionless, the most usable products are also the simplest.
3 Examples of Business Friction in the Workplace
Another important area to focus on is business friction in the employee experience.
The less friction there is in the workplace, the happier and more productive employees will be, so it naturally pays to reduce workplace friction as much as possible.
Here are three examples of issues that can cause business friction in the workplace:
Digital complexity is practically unavoidable in the modern workplace.
Every enterprise, after all, must use a wide range of digital tools in order to operate effectively.
As a result, employees must often juggle several different systems and tools in their day-to-day workflows.
In most cases, digital complexity is a necessary part of the digital workplace and it cannot be prevented.
However, there are steps that can be taken to reduce that complexity.
- Effective software onboarding and training can reduce learning curves and streamline workplace training
- DAPs can automate technical support, customer support, and even certain business tasks
- More effective business process design can reduce unnecessary complexity
This last point is an important one, since a great deal of unnecessary complexity comes from obsolete software or poorly designed business processes.
- Outdated business processes and systems
On the one hand, technology causes complexity in the workplace, as mentioned above.
However, a failure to update business processes and systems can also become a source of complexity and friction.
Here are a few examples:
- Older software programs are often less efficient or relevant than newer programs
- Legacy software may not integrate as well with more modern solutions, producing waste and inefficiencies
- Business processes that are built around older software solutions tend to take more time and be more wasteful
As an example, consider how efficient a hand-written account book is when compared to Excel. Then compare Excel to QuickBooks or another accounting software.
On the one hand, upgrading software adds new employee skills requirements. Yet at the same time, the adoption of newer tools also opens up new possibilities for the business, as well as opportunities to reduce business friction and workplace complexity.
Employee training is one of the best ways to keep the workforce productive and efficient.
Effective software training, for instance:
- Decreases the time it takes to learn new software
- Reduces software-related frustration
- Boosts employee engagement, productivity, and retention, among other metrics
Poor training, on the other hand, can have the opposite effects – employees take longer to learn skills and tools, they take longer to become productive, and they are more likely to become frustrated.
In short, poor training can become a source of business friction.
Ultimately, like the other types of business friction mentioned here, poor training can negatively impact the employee experience. And that, in turn, can directly affect employee performance, organizational performance, and the bottom line.