Have you ever heard or read this little gem? “Price, Quality, Service. Choose Two.”
It’s a nice little sound bite that I hear business gurus toss around because it makes them sound wise and cool.
Basically, it says that you can’t provide the best quality, and the best service, at the lowest price on the market. You can do any two of these things, but not all three at the same time. In order to be good in two areas, you have to suffer in one.
I say forget it.
Today’s consumer has so many options, and it’s typically so easy to switch from one to the other that they have minimum standards for all three. Woe to the business that drops below this minimum standard – they’re dropped like a hot potato!
There are just too many other competitive options that will be more than happy to take your business for you to stay loyal to a service that isn’t giving you what you need, right?
Which is why I have trouble with this “Price, Quality, Service. Choose Two.” thing. It suggests that you only have to do well in two areas, and gives you permission to screw up the third. That’s dangerous advice, and potentially damaging to your business.
Don’t get me wrong – if you can build a business in such a way as to deliver an excellent product with excellent service at the lowest price on the market, then you are a management superstar. You have created a competitive, efficient business. And as long as you are making your margin, then good for you.
But it is probably more accurate, and better for your business, to make a strategic decision to be the best in ONE and competitive (which, by the way, is not the same as just meeting “the minimum”) in the other two.
Price, Quality, Service. Choose one? Which one?
Personally, I’ve never been a fan of catering to the price-seeking crowd. While 13% of all consumers will put price above all else in their purchase decision, the number one thing most consumers rate highest is “confidence” in their supplier.
Confidence is the result of having a product and a company that delivers on its promises. This is basic stuff, the building blocks of good business – yet many businesses don’t actually “deliver”. (It makes a very compelling case for customer polling to make sure that they are happy with you, but that’s for another post!)
Getting back to our Price/Quality/Service debate, there is no universal correct formula, of course.
But if I had to make a suggestion (and that’s what this post is for!), then I’d say go for Quality or Service, to excel. Then make sure that the other of the two is *also* better than your competition, and work hard to manage your business well, so that you can drive down your costs and be as competitively priced as you can.
Of course, the difference then becomes marketing. You are special, but what good is it if you can’t tell the world so that they are happy to choose you over the budget option?
You’ve got to sell them on why you are better – which is why I recommend that you get really good at telling your story. Our program has a module on this, but you can also get some good help from most other copywriting resources. We particularly recommend Breakthrough Advertising by Eugene Schwartz.