In order to gain a competitive edge, businesses often find themselves in a position where they're asked to make decisions that are rewarded with some sort of short-term gain at the cost of the quality of their product or service. Yes, a competitive business climate demands that participants be flexible and fluid, but as it turns out, compromising on quality has lasting negative effects that have the potential to sink your business.
What is the cost of poor quality? You can't begin to value things like solid business planning and methods until you've begun to properly measure and understand the ways that settling on poor quality can hurt your business. How can you do this? The answer is complicated. If you own a restaurant, and insist on purchasing cheap, low-quality food and paying your staff next to nothing, then you'll find that it'll be difficult to attract business and keep your restaurant staffed. Investing in the products/services you provide and the people you work with is smart business, because it's a decision you're making with the future in mind.
Cutting corners and compromising on quality are choices you can make now that'll help you in the short term, but you'll regret it later. Customers forget good experiences and will remain loyal, but they'll never forget bad experiences. Displeased customers can and will bring their complaints to public internet forums. One bad Yelp review too many can cost you lots of money.
A recent article in Entrepreneur Magazine claims, "On average, a one-star increase on Yelp leads to a 5 to 9 percent increase in a business's revenue, according to an infographic provided by Chatterbox, a company that builds customer-engagement platforms for marketing purposes. On the flip side, one negative review can cost you 30 customers."
Opting for poor quality doesn't just hurt people in the service industry, but also businesses that provide products. One bad product experience has the potential to drive customers and clients away for years. From a customer's perspective, if they've made the choice to purchase a product from you, they're planning on that product to be good. If the product they purchase is of low quality, they'll go out of their way to not do business with you again.
The same goes for vendors and other business owners. If a vendor has made the decision to purchase goods from you, they're planning on those goods being able to meet the needs of their customers. There's nothing that'll drive business away faster than letting down vendors and customers just because you wanted to save some time or money in the short term.
Here are some sensible ways you can earn and keep business and make sure you're not cutting corners:
- Create a Dialogue With Your Customers and Employees: It's vital that you continually check in with your customers and employees. For your customers, ask questions like, "Are you happy with the products/services we've provided? How can we improve?" For your employees, you should ask questions like, "What ideas do you have to make this a better workplace?", and, "Are you happy in your position?" Yes, asking questions like these might make you a little vulnerable as a business owner/manager, but it's important to hear from your customers and staff. Improving the quality of your business means doing some investigative work on your part.
- Break Down Your Business Bit by Bit and Find Ways To Make Improvements: Once you've started a dialogue with your employees and customers, take the time to break down everything your business does and find ways to make meaningful improvements. The improvements you make may be small and seemingly insignificant, but the cumulative positive changes in your business could end up being huge.