Service and Quality

After demonstrating a start-up business cannot compete on price, I ask the question, is there another basis upon which we can compete...  pretty quickly people throw out  "service" or "quality" or "niche."

Drucker points out service and quality are not competitive items, they are standard items.  Walmart has a quality and service level.  Neiman Marrcus has a quality and service level.  Evey customer knows what that is.  One cannot be in teh business and lower either, or you will drive your customers away.  One cannot offer higher than what your customers expect, or you will drive yourself out of business for the hit to the profit margin.  The trick is not to compete on quality or service, but to learn exactly what those are in the industry you propose to enter, and adapt exactly that.  In my face to face seminars I show how to learn what it is for your industry at 2:30, and week five in my online seminars.

Now, it may happen, as Drucker mentions in one of his books and I refer to in mine HOW SMALL BUSINESS TRADES WORLDWIDE, where the problem experienced is in fact quality, the problem to be solved.  Drucker, and I citing him, refer to the pet anesthetics salesman, whose customers regretted they could not get human-grade (quality) aestethics for animal operations.  In this case the salesman solved the problem and did quite well.

Another instance is where the service is in fact the problem, experienced by the market.  In a present class, a fellow describes how during the rainy season his product cannot be had for love nor money.  Here the problem is in fact service, and opens an opportunity to get started, but here again, it has to start with a problem YOU experience.  Passion, to suffer.

Drucker also carefully points out, once introduced, innovations become standards.  So very good, you get human grade aenesthetics into the veterinaries, and products available during the rainy season, but the moment you do, so will all of your competitors, since once, introduced, it becomes the standard.  Where does thta leave you?  Back to competing on design.  It may very well give you an entree into a market, and much goodwill, even make you legendary, but to thrive you must immediately develop new products thereafter.

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