When it comes to Quality, Service and Price, a customer will often have to trade off one to achieve the others.
UK supermarket giant Tesco is having its share of problems at the moment, having just released its profit result, which is a massive 92 per cent down on last year. Shares in the company fell 6 per cent, wiping £1 billion (around $1.8 billion) off the value of the business. As well as serious accounting anomalies, one analyst commented that Tesco, for some time, has been failing customers in the areas of quality, service and price.
These three aspects of doing business kind of sum up the old saying: “You can’t have your cake and eat it too.”
Often, something has to give. Here’s an example:
Imagine you need to fly from Melbourne to Sydney for an important meeting at 10:00am in the city. It would make sense to book with an airline (let’s call it ‘A’) that has the best on-time arrivals record, rather than going with the cheapest seat you can get, which happens to be offered by airline ‘Z’, with a reputation for running off-schedule or even cancelling flights. In this case you are trading-off low price for the more reliable service.
And although your position allows you to fly Business Class, it is only a 1-hour flight so, being a responsible employee of the Company, you also trade off comfort (quality) and probably service as well, for the lower economy fare (price).
Also, as it is only a 1-hour flight you don’t need a meal, so the snack and coffee provided will be fine (trading off quality of food).
Now I’d like you to imagine that your employer is sending you to the 2015 International CES in Las Vegas. That’s a 16-hour flight to Los Angeles plus a 1-hour flight to Las Vegas and you are booked to attend several workshops on arrival.
This time, would you trade off a comfortable, fully reclining Business Class seat, with full meal service, for a cheaper, squashy Economy Class seat, with plastic cutlery and a meal to match? I don’t think so.
We all make these trade-offs every day in one way or another — it’s called compromise — and in most cases the outcome has such a small impact on us that we usually don’t notice, or bother to make a stand.
Our customers are just like us: they will trade off some things, but not compromise on others, which are simply not negotiable.
The ‘QSP’ Trade-Off
We would all like to have the absolute best quality with the best service at the cheapest price — wouldn’t that be nice? The highest quality will often be accompanied by excellent service, but rarely, if ever, does this come at the cheapest price. This means we will often have to ‘trade-off’ one of these aspects in favour of another.
Nineteenth Century English art critic John Ruskin once said that: “There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man’s lawful prey.”
There may be times when it will be useful to talk about this QSP trade-off with customers, pointing out, in a tactful way, these three considerations in the purchase, and finding out which one of the three – Quality, Service or Price – is not negotiable for the customer. Let’s say, for example, the customer answers, ‘Quality’.
This leads to the logical conclusion that the customer does not (or cannot) expect their final choice to be at the cheaper end of the range: best and cheapest are not normally found in the same product.
Having agreed that high quality is not negotiable, this leaves you and your customer to discuss ‘service’ and ‘price’.
Perhaps the choice of products under discussion offer different warranties or service arrangements, which you could briefly outline for your customer before asking which type of ‘service’ they would prefer.
As an example, I recently had to buy a new fridge and the final decision came down to the differences in the warranty, the conditions of which, to me, were a statement of confidence from the manufacturers. Price was a consideration, but was a ‘trade-off’ factor in terms of getting a reliable product that would service my needs.
Think, Understand, Help
Take time to think about how you, too, make these trade-offs every day in cafes, fuel stations, restaurants and supermarkets. This should help you better understand what is often going through your customers’ minds when they are faced with the plethora of choices available to them.
Remember, as a professional salesperson it is your job to help customers make the right decisions about the right products, and helping them decide what they will or won’t trade off should be a great help to them.
Bob Johnson is the principal of Applied Retail Training.