Fairly often, I like to walk around my neighborhood in west suburban Chicago. There is an interesting array of single family homes with pleasant scenery and nice yards. One of the things I have always noticed are the occasional markings that are stamped into the cement sidewalk squares with the date and name of the cement company. In grade school, we called these date stamps “stink fishes” and if you stepped on one, you were in for a heap of trouble.
Some of the dates are quite old. You can find some dated as far back as 1928, as well as many other decades through the 2000’s. One of the things I have noticed is that the older ones, even the ones from the 1920’s, seem to be set in much higher quality cement than the newer ones. Some sidewalk squares that are only 5-10 years old are much more worn and cracked than those from the prior century.
Well, that’s nice to know, but what’s my point? It got me to thinking about product and service quality. Why do the older squares wear better and appear to crack less? When and why did the type and quality of cement change? Did the customers/buyers know the options and differences in terms of cost and quality? Did some of the cement companies lose business due to poor quality? How has the cost varied over the years? And of course, does anybody care?
Think about your business. Most of us are in business to make money. The best way to make money is to delight customers so they return and continue to buy your products and services. In today’s hyper-competitive markets, product and service differentiation is critical to future viability, growth and success.
Customers and consumers often focus on the following criteria when making a purchasing decision:
- Price
- Quality
- Delivery options/item availability/convenience
- Needed functionality/duration
- Alternative products/substitutes
- Service, and;
- Brand/image/company reputation.
Many times, the ultimate buying decision is based on a combination of the above and it varies by customer. However, we know that quality plays a key role in customer loyalty and repeat sales. With this in mind, think about how your organization measures quality, how it compares to your competition, and to what extent it either contributes to sales growth or declining business.
Consider these 3 key quality metric groupings when evaluating the impact of product and service quality on your business:
- Yield – the percentage of your product/service that is produced and delivered on time and according to technical specifications. What is the trend and how does a 1% change impact the bottom line? From a manufacturing perspective, yield involves the amount of product derived from a set amount of inputs and the corresponding scrappage and waste. For a retailer, perhaps one alternative metric here would be inventory stock-outs. For a services firm, the percent of projects delivered on time and on budget is a valuable measure.
- Customer rejects/returns – how often are your products returned or rejected by customers? What are the current trends and root causes for returns? For services, what are the equivalent measures? If you are a supplier, you need to know how your end customers are measuring supplier performance and how well your products are meeting their quality standards.
- Customer satisfaction – this is a standard metric produced by many organizations. How are you measuring it and what does it mean? Does it represent a reasonable picture of your customer’s satisfaction with your product/service value proposition? Does it vary significantly by customer segment? Are you leveraging big data and analytics to provide better clarity and insight into customer loyalty, satisfaction and profitability? Would a net promoter score (promoters minus detractors) provide useful insights, and what can be learned from each group?
So, next time you see a stamped and dated sidewalk square, ask yourself, can you afford to not zero in on customer quality and fully understand how it drives your profits and growth? Contact Transforming Solutions, Inc. to explore innovative ways to improve your company’s performance.
