An ancient chinese curse says that “May you live in interesting times”. This crisis is an interesting time indeed, but you can extract some lessons from this hard time. One of this lessons was suggested to me by a commercial on TV.
Some months ago I saw a commercial on TV from a supermarket chain. The commercial said something like ‘quality is not expensive’. I am sure that many Spanish readers will remember it, but this particular commercial infuriated me for a number of reasons.
We are in the middle of a global crisis, where consuming levels are decreasing every month and some economic indicators show figures nobody has seen in many years. Commercial brands are having a bad season; supermarket chains have their own brands (called generic brands), which are cheaper, and they are giving the known brands the fight of their lives, removing them from the shelves to be replaced by this cheaper products. Consumers can get a benefit from this war, since he or she will see an increasing number of cheaper products. So, this chain is trying to tell people “We have good products at lower prices”. Let’s be honest, I’ve purchased some generic brand products and some of them are OK. The problem is the message that it’s being sent. To me, the message is “You can have the same quality at a lower price”. And the message is wrong, specially when you put it into the words they have used. Quality does not come for free.
You are probably thinking that this article is going to defend charging high prices but, the fact is, I want to go into this topic in depth. Since our company is not offering products but services, in the end we are talking about what really differentiates our services from the services of our competitors, and the magical word here is reliability.
In general, reliability (systemic def.) is the ability of a person or system to perform and maintain its functions in routine circumstances, as well as hostile or unexpected circumstances.
I have taken this quote from Wikipedia. I have read about 50 definitions of the word, but I like this one because it stresses two points which have become even more important in the middle of this crisis. The first one is ‘routine circumstances’. Two years ago, we started publishing in our website some representative annual figures about our work, including number of projects started and finished, success rates, number of products delivered, and others. Those figures talk about our ‘routine circumstances’. The number of projects finished has increased and consequently also the number of products delivered, although I must admit that our success rate has dropped a bit in the last year. Those figures are true, not tampered, because honesty is one of our corporate values, this is our track record. Maybe naive, but honest. When we considered publishing these figures, some people told us it was a bad idea, but our potential clients seem to appreciate that we are honest enough to tell them that we do not always have success.
The second point in the definition above is the ‘unexpected circumstances’ part. Well, the current crisis and how it affects the outsourcing world we live in are ‘unexpected circumstances’. Under these circumstances, reliability becomes even more important. When talking about chemical synthesis services there are three critical parameters: quantity, purity, and deadline, but a client looking for a supplier is giving this as the desired result, the standard, and usually another parameter is used to select your partner: price. Under unexpected circumstances, price becomes more and more important, but as the old saying goes, pay now or pay later. As I said above, quality does not come for free and, unfortunately, as you go down in price, reliability decreases. Your expected parameters go out of the window and you end up without a product and no explanations.
So think about this: in the middle of a crisis, where each dollar counts, what you can not afford is to buy cheap. Look for reliability, not price.