Improvement costs more doesn’t it?

We all know the phrase “you get what you pay for” and we all know from experience that higher quality goods and services cost more. So, it follows that if we improve the quality of our product or service then we are always going to have to charge our customers more for it. But is that always the case?

If we add extra value to the product then it is likely that it will cost us more to do that and we may have to pass that cost on; but improvement often comes from removing something that was preventing a higher quality output.

When we remove something our costs are likely to go down and this reduction in cost can be passed on to the customer. Unfortunately the idea that lower costs mean lower quality is also deeply engrained into our thinking – so if a supplier offers what appears to be higher quality at a lower price we get suspicious. There must be a catch or a trick.

So, to avoid disappointing your customers when you make an improvement by removing an impediment to quality – just increase the price a bit.  That way your costs go down, the price goes up, the customers expectation is met and everyone is happy; your customers and especially your accountant! It can’t be that easy surely. There must be catch?

Leave a Reply