Antifragile Ecommerce

I am reading a book called ‘Antifragile’, by Nassim Taleb. In it, he raises the interesting notion of ‘antifragility’. It goes something like this:

Some things are fragile. This means they falter as they face increased uncertainty and pressure.
Other things are robust. They can withstand the increased uncertainty and pressure.
But what if things were antifragile? Such things would prosper the more they were pressured.

It’s an intriguing thought, and it got me thinking of how this would apply to ecommerce. I came up with the following example.

Fragile Inc.

Things at Fragile Inc. have not been going well. Customer satisfaction has hit the floor, while customer complaints have hit the roof. Consultants are duly brought in and they find things in an alarming state of affairs.
They find that there aren’t any staff reponsible for handling customer enquiries. Instead, enquiries go into a big inbox and are dealt with by junior marketing executives who are balancing a number of other tasks. Its constant firefighting. And when a surge of enquiries come in, like it did at Christmas, a lot simply go answered. This leads to lower conversion rates and a number of purchasers getting confused and ordering the wrong item. They start leaving bad reviews, some of which are becoming visible in search results. Organic traffic has been steadily decreasing.

In short, this company is fragile. As the environment becomes more uncertain (i.e. customer enquiries increase) it becomes weaker. It cracks under pressure and it’s performance nose-dives.

Robust Inc.

On the other side of town the market leader, Robust Inc., has just reported excellent quarterly figures. In front of a gathering of press, investors and industry experts, the CEO talks about the changes to the customer service processes that were put in place a year ago.

He proudly tells them the newly created department hired designated customer service agents. Also, the company installed livechat across all of its sites. They brought in a top-of-the-line CRM to handle and track a customer’s enquiries across phone, email and livechat. But, leaning in, he says the biggest improvement has been a project that he himself initiated. He explains that a comprehensive online training programme was put together. It means that in peak times, Robust Inc. can hire outsourced customer service agents to temporarily help. They complete the online training and are then able to handle dozens of the simpler tasks, leaving the in-house team free to concentrate on the complex issues. Last Christmas, not a single enquiry went unanswered, he reports with a broad grin.

This company is robust. Whatever the environment throws at it, Robust.Inc can take. As customer enquiries increase, it has processes to expand their capacity to deal with it.

Antifragile Inc.

In a co-working space nearby, a group of people are hard at work. Their room is mostly quiet apart from the fast, assured tapping on their MacBook Air keyboards. The aroma of expensive coffee is ever-present. This is Antifragile Inc. - the upstarts - the new kids of the block. And they’re causing a stir with their fast progress and exponential growth.

These guys saw the work Robust Inc. did with their customer service department last year and were quick to match it. But they added something extra. They initiated a process where every week, each customer service agent would write up a list of the top 3 most important queries they dealt with. These lists then get passed to the content marketing executives. The executives then add them to the FAQ section of the site, and also convert anything notable into blog posts. The blog posts are SEO optimised for the keywords customers are using to search for answers. Over the past year since this began, Antifragile Inc. has built up significant longtail search traffic as a result. Moreoever, conversion rates have increased too as the FAQ has become richer. And what’s really exciting the team is that they’ve seen the ratio of customer queries to traffic fall, as their site has added so much more useful content.

This company exhibits some traits of antifragility. The more customer enquiries they get, the more FAQs and blog posts they produce. This increases the conversion rate and the amount of future traffic, which then generates more customer enquiries. It’s an upward spiral. And since they have the same ability to increase capacity, they want more enquiries. It will make them stronger. As the environment exerts more pressure on them, they jiu jitsu it right back and come out better off.

This is just one example. There are likely many, many more. It’s an interesting way of thinking about how to set up business processes that encourage upward spirals rather than to just absorb pressure.

Could your company become more antifragile?