The Law of Quality

The customer demands the very highest quality for the very lowest price.

This seems like a very simple law except that many companies try to violate it on their way to the bankruptcy courts. The customer is very smart and will always act to satisfy the greatest number of his or her needs in making any particular buying decision.The customer is very smart and will always act to satisfy the greatest number of his or her needs in making any particular buying decision.
Only the companies that cater to the customer’s relentless insistence on ever-higher levels of quality at ever-lower prices that are successful in the marketplace.

In 1989, both the Toyota Lexus and the Nissan Infiniti were introduced into the U.S. market. Both companies advertised these cars as the cars of the future, with the luxury features of the more expensive European cars but at prices that were $10,000, $20,000 or $30,000 cheaper. Both companies committed themselves to offering the finest quality automobiles in their class in America.

And they succeeded. From 1991 onward, the J.D. Power Survey of Customer Satisfaction has consistently rated Lexus and Infiniti among the best cars, in terms of vehicle quality and after sales service, among all 557 models of automobile sold in the United States. Repeatedly, J.D. Power rankings have the Lexus and the Infiniti tied for first place in quality amongst all cars sold in the country.

What does that mean? As a result of these outstanding rankings, the annual sales of these cars consistently amount to hundreds of millions of dollars.

The first corollary of the Law of Quality says that, “Quality is what the customer says it is and is willing to pay for.Quality is what the customer says it is and is willing to pay for.
” 

Only the customer can define what quality means to him or her. Sometimes the customer cannot even clearly define it; however she will vote for quality by the way she spends her money. Today, more than 80% of buying decisions are either made or strongly influenced by women.

Philip Crosby, in his book Quality Without Tears, wrote, “Quality is fairly easy to define. The quality of a product can be measured by what percentage of the time it does what it is sold to do and continues to do it. Quality is fairly easy to define. The quality of a product can be measured by what percentage of the time it does what it is sold to do and continues to do it.
”

You can measure the quality of an item by how long it continues to work without interruption or issues. If it does so 100 percent of the time without stopping, it would have a 100 percent quality rating.

If you buy a car, the quality rating of that car is how long it continues to run trouble-free without needing repairs, aside from those specified at the time of purchase. If the vehicle runs trouble-free for 100 percent of the time, it has a 100% quality rating.

Unfortunately, it is not uncommon for fully 25 percent of products manufactured today to have to be reworked and rebuilt right at the factory because of quality defects.Unfortunately, it is not uncommon for fully 25 percent of products manufactured today to have to be reworked and rebuilt right at the factory because of quality defects.
Philip Crosby’s title Quality is Free is based on his conclusion that manufacturing a high-quality item, without defects, actually saves money and boosts profits, both in the short term and in the long term. In the short term it is quality that creates customers and in the long term, it is the reputation for quality that keeps customers.

The second corollary of the Law of Quality is: “Quality includes both the product or service and the way that it is sold, delivered and maintained.Quality includes both the product or service and the way that it is sold, delivered and maintained.
”

The customer’s definition of quality includes all of the activities associated with the purchase, ownership and use of the item. Prices in a quality restaurant are not based only on the fact that it is good food that is served on the plate. A first-class restaurant, one that commands above-average prices and which can earn above average profits, also serves the food in an atmosphere of comfort and enjoyment that people are willing to pay more for. Can you imagine a waiter in a nice restaurant slapping the plate down on the table and just walking away?

Even a simple product can be sold and served with a smile and courtesy, thereby increasing its perceived value. The total experience the customer enjoys is all part of the impression of quality.

The third corollary of the Law of Quality is: “Companies are profitable in direct proportion to their quality ranking, as customers perceive it.Companies are profitable in direct proportion to their quality ranking, as customers perceive it.
”

This means that if a researcher were to go into your marketplace and conduct an honest, objective survey amongst the customers for what you sell, it could develop a quality ranking for your company in terms of how your product or service compares to your competitors.

For example, suppose there are ten companies offering the same product in the same market area. A survey of customers would reveal which of these companies is perceived to be the very best company in that industry in that market. The survey would also be able to determine which company would rank as number two, number three and so on. The companies that were perceived to be the highest quality companies in that market would also turn out to the most profitable companies in that market. A major reason that companies which are seen as high quality companies are more profitable is because of the deep need that customers have for security or safety in their purchase decisions.

Whenever a person has to make a choice between a higher priced product and a lower priced product, he will choose the higher priced product based on affordability because a higher price is associated with better quality. Better quality is associated in the customer’s mind with greater safety and predictability. The perception of better quality reduces the feeling of uncertainty or risk in making the buying decision. It makes it easier to buy. You can look at this as the old saying “you get what you pay for.” Rarely do you get good quality at a low price.

You never get something for nothing. In a competitive society you can safely assume that paying a higher price will assure you a higher level of quality and a lower level of risk. There is a saying by Thomas Ruskin, “The bitterness of poor quality is remembered long after the pleasure of low price has been forgotten.The bitterness of poor quality is remembered long after the pleasure of low price has been forgotten.
”

Wherever your business stands in the quality rankings (almost everyone knows intuitively where they rank), you must commit yourself and your business to the number one position. You must commit to becoming the very best in your chosen industry. Aim for quality leadership in your product or service. Not only will the commitment to quality animate and excite everyone in the organization, it will also be reflected in the profits that flow to your bottom line. The companies with the highest quality are the companies that earn the highest profits. They represent the greatest opportunities for the future. . The companies with the highest quality are the companies that earn the highest profits. They represent the greatest opportunities for the future. .

How you can apply this law immediately:

1. Determine your quality ranking in your industry. Use objective polling if you can or use your intuition if you must; just make sure you are honest with yourself. Ask your staff and colleagues where they would rank your company on a scale from one to ten among your competitors, as well.

2. Determine exactly how your customers define quality. Find out what level of quality they expect from you. Critically examine your products and services, and how you sell and support them. Ask your best customers what they most value about your business and how you could improve in that area.

3. Select one critical area to focus on for improvement. Pick an area or activity that has a direct bearing on customer satisfaction. Resolve to be the best in this one area. Tell everyone in your company about this commitment and then measure yourself regularly to see how well you are progressing.

From – Brian Tracy - The 100 Absolutely Unbreakable Laws Of Business Success