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The Quality Line or If Your Customer Doesn't Perceive It, Does It Matter?

Mar 18, 2008
You get what you pay for is the consumer's mantra. Common sense knows that if it costs less it is more likely of inferior quality.

Unfortunately quality is relative and subjective and even unwieldy. For that reason and common sense the value the customer puts on quality is where the quality line should be drawn.

Still it is not rocket science here; a rather straightforward case of supply and demand. If the consumer cannot tell the difference in an improvement, why do it? No need to guess.

Often it is a simple matter of asking. Think for a minute...when was the last time you asked? Do you only ask when there is a complaint?

On some level every business must deal with quality. Every business strategy determines just where the quality line goes -- high, low or in-between.

Where this line is placed often determines the difference between success and failure. The key dynamic is profitability; place the quality line at the wrong level and profitability goes down.

Customers may leave a business for poor quality but they can also go to a competitor for the same quality but better price. In one sense this is the easiest quality question to answer: just ask your customers. Just ask what your customers want and what do they need.

Wants and needs change constantly so you must keep asking the question...even put it in your operating business plan.

Sometimes wants and needs are the same...but often they are not. As part of your ongoing dialogue it is important to know just how much your customer is willing to pay for quality. If your customer wants it but cannot afford it, you must figure this into your strategy.

The next step is to determine just where your current quality line is. Regardless of whether you have a conscious plan or an 'unconscious' plan, you do have a quality line.

Those businesses that have a clear idea of where that line should be can then try to bridge the gap. Simply by taking a hard look at where you are and where you should be creates awareness and focus.
One good exercise is to determine just where your competitor's put their quality line.

What results are they getting and how is their quality line perceived? Are they providing you with an opportunity to take some of their market share?
By looking into your industry's quality issues you can see that improved quality almost always involves increased costs.

Before adding costs make sure the increase in perceived benefit will be apparent. Since all costs go to your bottom line, make sure you are getting a good return on that investment; always remembering that in a competitive environment there is little margin to be had.

One cost control plan is simply looking for all the ways to reduce costs. Another is to look at doing things that enhance quality at little or no cost.

Employee input is important to monitor; especially with those employees that have direct customer contact. Do you have ways to reward employees who contribute to quality improvement? Do you have low cost ways of rewarding good performance?

The astute owner or astute employee is always on the 'prowl' for new quality improvement ideas. This includes looking for ways to apply quality concepts from different vertical as well as horizontal markets.

But since the rate of change often seems to be accelerating, what may be working today may not work very well tomorrow. So today's ownership and management must keep a sharp focus on shifting trends.

The competitive nature of business changes so rapidly there is no rest for the quality weary. By constantly working the balance between quality and costs the modern manager can improve the bottom line and become more competitive.

There seems to be no end to the drive for improvement and cost reductions. Where quality lies in the matrix is one of the biggest business decisions ownership and management make about the company's bottom line.
About the Author
Jack Deal is the owner of Jack D. Deal Business Consulting, Santa Cruz, CA. Related articles may be found at http://www.jddeal.com/blog/business and http://www.freeandinquiringmind.typepad.com
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