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Quality matters: understand it and make it part of your business

Focusing on quality can help you turn it from a worry into an opportunity. Save time and money, cut waste, and improve your brand and reputation. Learn about measuring, delivering and communicating quality, and about fixing quality problems.

What is quality, and why is it so important?

Quality can be measured in lots of different ways, but should always be driven by your customers’ expectations and needs. For example, customers expect spinach to be fresh and clean when the packet is opened — this is a quality expectation.

Your product or service might also need to meet legal requirements, so quality can be driven by the law too. For example:

  • houses can’t be leaky
  • children’s toys can’t create choking hazards 
  • a consultant’s advice might need to be independent.

It’s up to your business to find ways to understand, measure, deliver and communicate quality. The better your business can achieve this the higher the quality and, usually, the more you can charge.

Good quality leads to satisfied customers and repeat business. Word of mouth about good quality can help you build your business. Bad quality can cost you time and effort to put right, and can harm your reputation — it can take many positive experiences to undo the damage of a negative review.

One traditional way to think of quality is simply ‘excellence’ — a product made from the best materials, with excellent workmanship, and with no faults. But real-world quality also depends on:

  • meeting your customer’s needs
  • providing a good customer experience
  • balancing excellence and cost appropriately.

Different products or services can have the best quality for different customers, depending on their priorities. And a company can demonstrate quality by helping a customer understand what they really need, rather than unquestioningly delivering what they initially asked for.

Engage with your customers early in your product/service development to understand what they really need and value. This will help you avoid wasting time and money on something they won’t value. Use the tool below to understand what your customers want from you and how you compare against your competitors.

How you stand out in the marketplace

Neglecting any aspect of quality could lead to faults or weaknesses, and customers might think your offering isn’t worth it. Getting the balance right means choosing the right things to measure and control. Then you can deliver the quality your customers need, and communicate your quality to customers as a selling point.

"Whatever an executive thinks the losses of poor quality are, they are actually six times greater."

"Whatever an executive thinks the losses of poor quality are, they are actually six times greater."

Taiichi Ohno, renowned quality expert and former vice president of Toyota Motor Corporation

The quality of your customer experience is an opportunity for competitive advantage

The quality of your customer experience is an opportunity for competitive advantage

Even if you can’t beat your competitors on price or quality, think of all the ways your customers engage with your business. You can give customers a better experience with friendly contact, convenient appointments, reliably meeting deadlines, and anything that goes beyond the industry standard they expect.

Measuring quality

Once you know what your customers want and how they judge quality, you can find the best way to measure the quality they care about. Use your customers’ needs to define measurable characteristics that lead to customer satisfaction.

You can measure the quality of inputs, processes, outputs, the final product or service, and the perception your customers have. The same three steps are useful everywhere:

  • define the important characteristics and how to measure them
  • set standards for those characteristics
  • control your process to meet the standards.

Focus on those characteristics that relate to customer quality and cover the most important problems. Measurements can be useful both at a detailed level in your processes and at a higher level relating directly to the outcome for your customer.

Set standards that relate to quality thresholds that make a difference. Standards are inefficient if they are higher than necessary without contributing to quality as the customer experiences it.

Testing every product costs much more than testing samples — and if the testing is invasive, it might not be practical. Testing samples can be an effective and efficient way to catch problems.

The inputs, processes and outputs that are most important to your business need to be checked most thoroughly against your quality standards. Classifying your inventory by value can help you see where to focus.

Detect errors at the right time

If you have errors early in a process that aren’t caught until later, you waste the work between where the error happens and where you catch it. Bring testing as close as possible to the step where the error could occur. For example, a graphic design service might check the brief is right and check the concept is right before going further. If they only check the final result with the customer, all the work beyond the concept could be wasted.

Here are some useful times to check quality:

  • before an expensive step in the process or a ‘point of no return’ (for example, checking ingredients before combining them and committing time and effort to cooking them)
  • immediately after a known ‘fail point’ (for example, if you’ve recently had problems with delivery, you might check that customers are now receiving their orders correctly)
  • immediately before passing your product on to your customer.

For example, if you are a cookie maker selling cookies to a retail store, you might notice that the retailer is rejecting some of the cookies you send. You could detect quality problems by studying why some of your cookies are being returned. You start checking every return when you receive it — the retailer’s return form includes the reason for the return. You classify the returns into two categories:

  • controllable returns — for example, due to problems with manufacture or packaging
  • uncontrollable returns — for example, due to a weather event disrupting shipping.

You work on eliminating the quality issues causing the controllable returns. Checking for known manufacturing problems before packaging, and checking for known packaging problems before shipping, saves cost and improves your quality reputation with your customer.

Case study

Wiremu’s quality metrics

Wiremu’s electrical business has good quality overall but suffers occasional lapses in customer satisfaction. He decides to document some metrics to measure and manage more systematically.

He starts by joining a review scheme to collect customer feedback. He automatically gets feedback from each customer and can see how he scores against a benchmark. He finds 80% of his customers rate his services ‘5 stars’. He sets a goal to increase it to 90% in six months.

Next, he looks at quality of the job itself.

  • Does his work meet his customer’s needs? The most frequent feedback has been about recurring faults after work on air-conditioning units.
  • He already tests all components and connections, and tests each system ‘end-to-end’ after working on it. He decides to set himself a formal standard for air-conditioner work, with a checklist relating to the recurring faults.
  • What does the law say? He keeps up to date with the latest standards and qualifications, and he’s confident his work meets all the requirements.

Then he thinks about wider service quality.

  • He decides to contact customers a month after every air-conditioner job to check if the systems are working well, and to establish a dedicated line for any post-service feedback or problems.
  • Does he get the job done? He checks back on the percentage of jobs finished in one visit, without having to delay work, go away and wait for parts, or come back and fix errors. It’s not bad, but definitely something he can monitor and work on increasing.
  • Does he meet his customers’ cost expectations? He asks a few recent customers, and they are reasonably happy. He decides his extra focus on quality should help his service deliver better value.
  • Is he available? Wiremu prides himself on setting appointments without too long a wait, and urgent appointments the next day — a customer service advantage he realises he could make more of.

Studying his feedback for job and service quality shows Wiremu where to focus to reach his goal. And the review scheme helps him track his customer satisfaction as it improves.

Controlling processes to deliver quality

Day-to-day control of your processes helps you prevent problems and catch them when they happen — reducing risk and increasing profits. Once you have chosen your quality metrics, you can design your processes to meet your standards while staying efficient. For example, to ensure raw ingredients for food are fresh, you might:

  • set a policy that you store produce below 4C (checked with a thermometer) and don’t keep it any longer than three days (writing an expiry date when you receive it, and checking the expiry date before using it)
  • write standard operating procedures for stock rotation, putting new deliveries at the back so the older produce is consistently used first
  • audit the temperature and expiry dates from time to time 
  • monitor how much ‘expired’ produce you throw away, and fine tune your orders to reduce waste.

As well as measuring a pass or fail against your benchmarks, you can use measurements to spot trends and fix problems before they become too serious.

People are part of your quality plan

Management and leadership matter. Once your business knows what the product or service should look like, everyone needs to understand and follow the measures in place. Consider:

  • documenting processes and actions to ensure the knowledge is built up and passed on within the business
  • building capability in your business by training and upskilling your employees
  • setting up incentives to align employee efforts and signal how important quality is to your business.

Controlling processes outside your business (such as at suppliers) is harder than controlling your own processes, but it can be important too. Think about how to explain the quality you need to your suppliers. Put your requirements into your contracts, identifying key quality metrics that the suppliers need to meet. Set up incentives or penalties to support them. For example, metrics could be:

  • supplier to meet their delivery commitments 90% of the time
  • no more than one in ten boxes to have defective items or packaging
  • quality complaints to be addressed within 3 days.
Checklist: identify, control and deliver quality to your customer

Checklist: identify, control and deliver quality to your customer

  • Do you measure the quality characteristics your customers care about and any legal requirements?
  • Do you use quality specifications that are easy to measure and give useful results?
  • Do you have processes and controls that help you eliminate repeat problems and catch new problems early?
  • Do you control processes outside your business (such as at suppliers) as well as your own?
  • Do you check the final product or service meets your customer’s needs?
  • Do you provide good support for any quality problems your customers encounter?
  • Do you make the most of your quality to market your business?

Use our Quality checklist [PDF, 56 KB] to help you measure, control and deliver quality to your customer.

Even with excellent quality control, problems can happen. If you discover a quality problem, you need to fix it. Sometimes the problem is obvious, but other times you may need to do some troubleshooting. If you have a process map, it can help you visualise the steps in your process and decide what to investigate.

Fixing a problem involves finding the root cause of the problem, solving the problem, and checking the solution worked — is the output of the process OK now?

Document the things that have gone wrong, and how you fixed them. This helps you fix the problem if it happens again. Documentation can also free you from having only one person who knows how to fix a problem — a risk if they are unavailable or leave the company.

You might be able to prevent the problem from reoccurring, for example by changing your process or building some sort of early warning into your process.

If the problem reaches your customer, your customer service will be part of the fix. Good service can keep your customer happy despite the problem. Bad service can make the problem worse.

The following four steps can help you improve quality. They’re a good overall framework for continuous improvement too.

  • Plan: Identify a change for improving your product/process quality, and define the important characteristics and how to measure them.
  • Do: Make the change (you could trial a major change on a small scale first).
  • Study: Examine the results. What did we learn? What went wrong?
  • Act: Use the learning from the change to adjust the goal or broaden the learning until you meet the acceptable standard.
”It’s the putting right that counts.”

”It’s the putting right that counts.”

Alan Martin of LV Martin appliance retailers turned this promise of customer service into a marketing campaign in the early days of television advertising in New Zealand.

Communicating quality

High quality goods and services can give you a competitive advantage worth marketing. Let your customers know that your offering is high quality in the ways they care about. This might involve focusing on the outcomes that make a difference to them, or on your points of difference over competitors. For fairly standard products and services, market comparisons can be useful — showing your product or service ranks well for reliability or another characteristic. Even without distinctive product quality, excellent customer service means customers can rely on you for help when they need it.

Communicating your quality focus inside your business and across your network is important too. A clear understanding of your quality focus and metrics helps workers and suppliers align themselves to your priorities. For example, you might have a promise to replace faulty products within 48 hours. If the person in charge of your shipping understands the importance of this, they can take steps like prioritising a replacement over standard orders, or picking a faster delivery method to ensure your business meets its promise.

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