A 1985 Gallup survey for the American Society for Quality Control assessed the extent to which customers are willing to pay more for quality; the results startled even those who commissioned the survey: “It would appear that most consumers are willing to pay to get the quality in a product they desire. . . . On average consumers report that they would pay about a third more for a better quality car ($13,581 vs. $10,000). Consumers would be wiling to pay about 50 percent more for a better quality dishwasher ($464 rather than $300) and proportionately more for a television or sofa they thought was of better quality ($497 rather than $300 for a TV, $868 rather than $500 for a sofa). Finally, consumers claim they would, on average, pay twice as much for a better quality pair of shoes ($47,00) than for an average quality pair ($20,00.)” The proportion that would pay nothing extra for the higher quality was 10 percent for automobiles, 4 percent for dishwashers, 3 percent for shoes, 6 percent for TV’s, and 4 percent for sofas. Frighteningly, the survey also found that people with higher incomes and Westerners, two consumer categories considered “leading indicators,” were by far the most dissatisfied with the quality of American products.
For ten years I have pored over studies and observed grocers, retailers, express mail companies, and hardware distributors; manufacturers of textiles and steel (from structural grade construction steel to precision parts for transmissions) and washing machines and autos. I have studied furniture makers and makers of two-by-fours and high tech wood joists and producers of cardboard boxes and tents. I have examined the methods and results of theme park operators, baseball franchise owners, chicken and beef and vegetable and pig farmers, cookie makers, ice cream makers, soup makers, computer makers, and semiconductor makers. My unequivocal findings: (1) customers-individual or industrial, high tech or low, science-trained or untrained-will pay a lot for better, and especially best, quality; moreover, (2) firms that provide that quality will thrive; (3) workers in all parts of the organization will become energized by the opportunity to provide a top-quality product of service; and (4) no product has a safe quality lead, since new entrants are constantly redefining, for the customer, what’s possible.
From “Thriving on Chaos” by Tom Peters 1987.
Managing IA's 