What are the factors that you consider when you are looking to shop for something? You would, like every other customer, look for the best quality there is, at the least price. So, when you are at the other end of the business, that is, you are the one selling, you’d look to maximize quality as much as you can and try to offer it at competitive prices.
So, how do you balance cost and quality in production? It is a two-way game. First, let us see how you can bring cost price down. A penny saved is a penny earned. Look at the process end to end. Is there any place where you can optimize costs?
Ask for better prices with your vendor
If you have been a regular customer with a vendor who sells you raw materials, ask for better prices on bulk orders. Sign contracts with them if you are looking at it long-term and if you are satisfied with the supplier’s quality.
Choose a Wise Market Place
If you run your manufacturing unit and warehouse on rental space, see if you can move to a locality that offers space at lower rental value. If you run a retail unit, you can consider building an online store. Bring in an expert who can design an online store. A lot of retailers find that e-stores are a huge respite – it helps them reduce mark up because traders save on store rental cost. The products go straight from your warehouse to the customer.
Save on Shipping Costs
You can also charge for shipment. But if you offer free shipping, that’s quite attractive to customers. Lastly, check wherever you can claim refunds. Always keep tabs on shipping refunds you are eligible for.
Make Use of Newer Technologies
Look at the technology you make use of in your production process. Is it time to go for newer and cost optimizing techniques? Think long-term here. If this new technology promises better returns but requires huge initial investments, do the math and analyze the situation.
How do you step up on quality? Remember that maintaining quality is what will bring you customer loyalty. Since our focus is on ramping up quality without much of a dent on the cost factor, let us consider quality upgrades with minimum cost.
Product sales and service warranty
Remember that quality of sales and service also matters in the big picture. A product that is sold with a warranty/guarantee is a sure shot success. If you are quite sure about the quality of your product, a 2-year free service offer plus replacement guarantee is going to be a good selling point. Or, you can consider selling an annual maintenance contract along with the product.
Excel in Customer Service
Another arena where you can work on quality is customer service. Keep tabs of customer grievances and address them ASAP. Nothing brings customer loyalty like good customer service. Invest in personnel who can do that. Also, an automated mail that registers a complaint goes a long way. Offer refunds wherever it is feasible.
Never keep the customer waiting
Respond quickly. Keep them updated about service procedures and make sure they get an idea of how long it would take to resolve the issue. And stick to your promise. Follow up with customer complaints and make sure they are resolved.
