Customers choose quality over price - most of the time

Tough economic times make it difficult to get the edge on the competition. But, as Claire Richardson explains, consumers would rather choose a good quality product or service over a tiny price tag.

by Claire Richardson
Last Updated: 09 Oct 2013

The last four years have not been easy for businesses in the UK. But, it’s fair to say that they have not been as cruel as many feared they might be, and there are now good reasons to believe that the economic ship is on course for calmer waters. 

Nevertheless, business leaders have cause to remain cautious; no sooner had time been called on the double-dip recession but the doom-mongers had raised the dreaded spectre of a ‘triple-dip’. Since hysteria is the default state for many commentators, it’s understandable that business judgement occasionally becomes clouded. That makes hard facts especially valuable, and doubly so when they can be interpreted as a clear call to action. 

One survey, carried out by Verint and Ipsos-MORI, suggests that only 23% of consumers in the UK rate price as a more important factor in their purchase decisions than service across high-street retailers, pay-TV, broadband, financial services and utilities.

The same survey revealed widespread dissatisfaction with current standards of service, as well as a general apathy towards traditional marketing techniques and a fierce intolerance of basic mistakes such as billing errors and lost details. While that’s a grim picture of the consumer experience in the UK, it’s a sunny outlook for business more generally.

After all, it’s in many ways easier to deliver a good service than a cheap one. Four years after a dramatic chilling of the economic climate, most businesses have already trimmed the fat from their operations, and cutting costs further to undercut rivals is bound to have a corrosive effect. 

Instead, a series of discrete, limited investments in training and technology to improve processes and service quality can offer a competitive edge much sharper than that afforded by a nominal price advantage. Sometimes that edge can be gained without massive cost; if the structures and skills are in place, a change in attitude by the management may be all that’s needed.

I’ve been working with customer-service teams for more than a decade, and I’ve learned that a relatively modest budget can go a long way when applied to improving customer service, in all its forms. I’ve also seen the positive impact such a strategy has upon the marketplace more generally. 

Competition through price can only ever be a race to the bottom, promoting a homogenous market, dominated by a few players, and providing only low-skilled work. 

Competition through service encourages innovation, promotes the development of niche markets, and requires continual self-improvement from workers at all levels. 

That’s good for independent businesses, and it’s good for the economy as well.

Claire Richardson is a VP at workforce optimisation consultants, Verint.

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