Quality Is a Commodity

A generation ago, quality was a huge issue in the marketplace: it was a major differentiator. Manufacturers and sellers of automobiles, hardware, clothes, and appliances focused their marketing on quality. People bought quality, and they were willing to pay a premium price for it.

Modern manufacturing techniques and the global distribution of products and information has changed the value of quality. Today people take quality for granted—it is expected. Whether an automobile costs $15,000 or $50,000, it routinely operates for 200,000 miles without major repair. Appliances and clothing are replaced because of color or style before they ever wear out. Many products are replaced because of obsolescence rather than failure. While everything is better, it is also increasingly the same.

Many products are the same today as they were 50 or more years ago. Candles aren't much different today then they were 100 years ago. Manufacturing techniques may have changed, but it would be difficult to tell the difference between a brand new candle and one that was made 100 years ago.

The Massachusetts-based Yankee Candle Company has more than 30 years' experience in the candle-making business. The company advertises its 8-inch taper with a seven-hour burn time while its threewick parlor candle will burn for 30 to 35 hours. A candle shopper can compare burn rates and style and make a buying decision. In effect, this comparison reduces quality to the status of a commodity. One 8-inch taper that burns for seven hours can't be much different from another 8-inch taper that burns for the same amount of time.

Another example of the commoditization of quality is the paper industry. Manufacturing techniques have changed drastically over the 120-year history of this industry; however, the finished product remains an 8 1/2 x 11-inch sheet. At one time, companies such as Fox River, Hammermill, and Southworth attracted their customers with their claims of quality. These companies still tout their quality, but buyers make their purchases based on price because quality is assumed. Quality in the paper industry is a commodity. Shoppers at Office Depot, or the local office-supply store narrow their searches by weight, brightness, and size. Once shoppers find 8 1/2 x 11-inch paper of the desired weight and brightness it is simply a matter of which ream costs less. Quality is a commodity. Today, quality is the minimum requirement to enter a marketplace.

One of the greatest automobiles ever built is the Acura Legend. The Legend was manufactured from 1986 to 1995. The customer satisfaction level for the Acura Legend is as high as any automobile ever tested. Owners have reported fewer problems, received better service, and continue to enjoy more comfort and efficiency than they ever expected. Owners believed the fit and finish to be world-class. The resale value for Legends remains exceptionally high. Owners loved their Legends, but unfortunately, they did not go back for a second Legend. Less than half of Legend buyers bought a second Legend. When they replaced their Legends, more often than not it was with a different brand. This illustrates that tremendous customer satisfaction does not equal customer loyalty. Remember, customer satisfaction is an opinion while customer loyalty is an activity.

Even though Legend owners were thrilled with their cars, they felt that the Lexus, Avalon, and Infiniti were comparable automobiles. The Legend owners did not see a differentiator. They asked, "What's the difference? They are all good."

Toyota, on the other hand, enjoys the highest repeat business in the automobile industry. What is so different about Toyota? Owners will tell you, "Toyotas are the most reliable cars ever built." These cars may or may not be the most reliable, but Toyota reminds their customers through regular mailings and advertising that the distinguishing characteristic of each and every Toyota is reliability. There may be other cars that are faster, sportier, bigger, and more deluxe; however, when it comes to reliability, you have to buy a Toyota.

Toyota owners are so convinced of the difference that they won't risk purchasing any other brand. While less than one half of Acura Legend owners bought another Legend, about 70 percent of all Toyota owners have returned to their dealers for another Toyota. Reliability is the differentiator.

Toyota knows that just being different is meaningless. Differentiation only works when you differentiate with value that has meaning to your customers.

Being the Best versus Being the Only One

Being the best at what you do may mean very little: It is more important to be considered the only one who does what you do.

Years ago, I had a friend that owned a small FM radio station. This was long before FM radio was the most used broadcasting system. At that time, most radio listeners tuned in to their favorite station on an AM radio. My friend's station had the smallest audience in the city where he broadcast. One day I asked him how he was able to attract advertisers with his small audience. He said, "It's simple. I don't have a big audience, but if an advertiser wants to reach my audience he has to advertise through my station. My audience isn't listening to the biggest station. They listen to my station." My friend knew back then that being the best wasn't as important as being the only one that does what you do. In this sea of sameness where even quality is not a differentiatory, how can each of us stand out from our competitors?

This Lawyer Differentiated by Being the Fastest

I met Dave Grissom several years ago. Dave is from Louisville, Kentucky. He came from a middle-class family and his father was a paint salesman. Dave's father died at a fairly young age as a result of complications from exposure to paint fumes.

Dave Grissom was not an inspired student. He graduated from the University of Louisville in the middle of his class and he was accepted at that university's law school and completed his law degree without distinction. At the time of his graduation there were a few very exclusive law firms in Louisville that hired only graduating lawyers from Ivy League schools. One of these highbrow firms decided to hire Dave to appease the University of Louisville's efforts to place one of their graduates in the local firm.

The firm hired Dave, but they did not really support him. He was given a minimal salary, but not an office. Instead he was told to work out of the firm's law library.

Young lawyers are dependent on their firm for clients. The only work Dave was given was work from clients no one else wanted: simple wills and uncomplicated divorces. He didn't earn much money and the work was not very challenging.

Dave decided that if he was going to be noticed, he had to do something noticeable. He decided he would become the fastest lawyer in Louisville. Dave would meet with a client couple to discuss their wills. They might spend half an hour to an hour with Dave and then they would leave. When they arrived home a little later, they were surprised to receive a phone call from Dave so soon. "I have the wills prepared for your signatures. When can you return to our office?" It didn't take long for Dave's reputation as the fastest lawyer in Louisville to become known. He wasn't the cheapest or the smartest, or the best or the best known, but he was the fastest. When people who knew several lawyers wanted law work done ASAP, they went to Dave.

Dave stayed with that law firm for only a short time. He wanted his own office and his reputation was helping him build a clientele. He joined two other young attorneys and opened a firm where the three lawyers shared the rent and one secretary.

The reception area, which the young attorneys referred to as the "bullpen," was horseshoe-shaped with the secretary in the middle and the three lawyers' offices surrounding her. One day the secretary entered Dave's office and announced, "There is a Mr. Brown here who would like to see you." Dave said, "Let Mr. Brown cool his heels in the bullpen for a few minutes and then show him in."

A few minutes later Mr. Brown held his hand out to Dave and said, "Hi. I'm John Y. Brown. I am the president of Kentucky Fried Chicken and I need your help in moving our headquarters from Nashville to Louisville. I don't care about the price, but I need it done in three months. I understand you're the only lawyer in Louisville that can get it done. Can you help me?" Dave told me he was gripping the arm of his chair so tightly his knuckles were white and he couldn't let go to shake Mr. Brown's hand.

Dave and John Y. Brown continued their business relationship for many years. And Dave had his reputation for being the fastest lawyer in town to thank for that.

Dave Grissom has had a tremendous career. He and his law partners grew the Louisville-based Extendacare into Humana, the giant healthcare company. Dave went on to become chairman of a national bank and a true captain of industry. Even at the pinnacle of his career, Dave admits, "I started out by being different. When other lawyers took days or weeks, I took hours." He established a differentiator to keep his clients coming back.

Everyone can't be the fastest. Everyone can't be smartest, funniest, most experienced, or the most of anything else. Every company doesn't have the best price or the most selection or a permanent corner on innovation. However, everyone, including you and me, can develop signature traits that differentiate us. It can be as simple as developing a reputation for always returning phone calls within the day or the hour.

Lou Holtz, the national champion football coach, is known for starting every conversation with a sincere, "How can I help you?" There are as many ways to differentiate as there are people.

The purpose of this differentiation discussion is to ultimately increase loyalty in your clientele. Customer loyalty is the activity of either repeat buying or customers recommending your product or service. Even small differentiators identify you and give customers something to tell others about you.

Why Customers Come Back. How to Create Lasting Customer Loyalty
Why Customers Come Back: How to Create Lasting Customer Loyalty
ISBN: 1564146952
EAN: 2147483647
Year: 2003
Pages: 110

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