As a supplier of goods or services it is possible to raise the quality to levels that customers are no longer interested in paying. Remember that the Sony Beta format had better quality than the VHS, but it lost the competitive battle because its slightly higher price? There are however known cases where “excessive” quality paid off. One case that I am aware off is the mechanical component of a Toyota car that was made to much closer dimensional tolerances than previous practice in the industry and with no immediate financial benefit to the manufacturer. However Toyota managed to cumulate such feats and generate a superior quality image that results in a premium price and an increase in market share.
In the domain of laboratory tests in which I specialize metrologists have developed exacting methods of instrument calibration that ensure the highest possible quality in tracing measurements to some common, internationally recognized standards. On the other end of the spectrum, many test methods are used that intend to give only a rough idea about the quality of materials or products, where these advanced testing methods are superfluous and can add costs, not warranted by the nature of the product tested.
How can be balance “best” against “good enough” or “worth paying”?
As suppliers, when there is little competition, or when we are lucky, we can just hit the optimal spot. More often we are better off if we can test the validity of our assumptions. Ideally we can produce the good or deliver the service at different levels and check out how prospects and customers react to those. When that is too expensive, we can try to get a feel for the potential response by asking. We should however be aware of the fact that respondents to surveys may not know the right answer, or may respond differently when faced with a real life situation when they really need to make a paying decision.
As individuals we face the same dilemma in our interactions with others in our lives. It is not uncommon to offer to others more than what they are willing to accept, even when there is no expectation of reciprocation. Open discussion with them can sometimes give us a better understanding of what they prefer or accept.
Tips:
- Aim to give the best product or service at a price the customer is willing to pay.
- Test the prospect, customer or relationship partner interest in the level of quality offered. When possible, check several levels of quality to pick the optimal one.
- When others participate in the selection of the level of quality they are more likely to end up buying the product or service, or accepting us as individuals.
- Feedback from hypothetical or real evaluations is a tool to design products or services that are superior. It is also a tool to distinguish from competitors.
- The feedback process reinforces the quality of the relationship, whether in a business or personal relationship.
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