There are several elements to a positive shopping experience: convenience, price, ambience/atmosphere, service, and availability, which combine to make what we call transactional quality. I’ve also heard transactional quality compared to a three-legged stool composed of quality, service (communication and delivery) and (lowest) price. In a competitive environment you can only get two of the three. If you choose the price and service then don’t count on the best quality. Or if quality and service are tantamount, then the price will be what it has to be. No one can afford to deliver all three, because they are at odds with each other. That’s why it’s called trade.
In thinking about transactional quality, take a moment to reflect on your own shopping experiences.
Is it really all about price? If it is, then how far are you willing to drive to get a better deal? Are the savings worth the inconvenience, the traffic, the cost of gas, and most especially, your time?
How about quality? Is the quality comparable at the discount store? Are you willing to eat a loaf of day-old bread in the next day or two, before it grows completely stale, in order to save 50%? How about bruised fruits and limp or mushy vegetables? Is the savings worth throwing away half of it out? Surely you’ve noticed that some name brand clothes are more durable and made of superior material. If it lasts longer and wears better, isn’t the quality worth more? We’ve all heard that generic items leave the back door of the same plant as the name brand stuff. While this may be true of some products, it’s not true of all generics, and it doesn’t mean they’re made of the same material.
How about service? Have you shopped at The Home Depot lately? ‘Nough said. (Though I do remember the days that wasn’t the case -before Nardelli became CEO). Spending half your allotted shopping time looking for someone to help you find what you need is probably not part of your plan. A commitment to customer service is often the deciding factor in customer loyalty. Cabinet manufacturer American Woodmark’s commitment to customer service is to address all reasonable, and sometimes unreasonable, customer demands. What better service guarantee can you get than that?
Ambience/Atmosphere? Are you a shopping snob? Of course you are. You like going to places where you feel good. They may cost more than the cheapest option, but the trade-offs may be worth it to you. So let’s not lie to ourselves. To use an example most of us can relate to: Who would honestly choose Walmart over Target? Is the 3-5% savings worth gritting your teeth and slogging through a disorganized store with harsh lighting, institutional colors, screaming children, English-is-a-foreign-language patrons, and not a checker in sight? Hmmmm…. that’s a tough call. If you’re still in denial then let’s use restaurants as an example. Surely you’ve noticed that as the menu price goes up, so does the quality of food, service, décor, cleanliness and patronage.
Then there’s convenience. Nothing brings the worth of your time to the forefront like convenience. If I go to the internet, how soon can I get what I want? Do I want it bad enough to pay for express shipping, or to drive across town to the storefront that has it in stock? How much time do I spend price-comparing? Ever noticed that pricegrabber.com and sites like it help you compare prices between various vendors. They often appear cheaper but then there’s shipping costs, which aren’t clear at first. And they each have a unique checkout process, which, it turns out, is not convenient either. Amazon, on the other hand, may not always be the cheapest, but is always cost competitive; Amazon has just about everything, and requires a standard of service from its third party vendors. The convenience of Amazon is that it’s a trusted source for internet purchases. That said, it’s still not as convenient as the storefront down the road that has a knowledgeable staff and the item on hand. So what is convenience worth to you?
Back to the three-legged stool of transactional quality- As a business owner which two will you choose? Keep in mind that this will say as much about your potential customer as it will about your products and services. Go cheap and you will have cheap, but demanding customers. You will forever be trying to cut corners and chase low-wage labor, a losing game. Produce and serve to a higher standard and you can charge for it. Its likely that your customers will see the value and be prepared to pay for it. But a caution to those who want to make a killing on a substandard product, people expect to get what they pay for.
