Product Quality Is a Manufacturer’s Ultimate Competitive Advantage
At a time when material costs and supply chains are continually shifting, one thing remains constant: customers, prospects and channel partners choose who they’ll do business with based on product quality, trust and speed.
Not only does product quality determine which manufacturers will make it onto a company’s preferred provider list; multiple studies have shown that business customers put a premium on value. They are willing to pay higher prices to get higher quality. That’s why, more than ever, a reputation for quality is one of the most valuable assets a manufacturer can have. Simply put, establishing product and manufacturing quality is the quickest way to win customers and increase revenue.
Building a solid reputation for quality—one that the company can grow on for years to come—starts by focusing on customer-driven quality metrics and key performance indicators (KPIs). This requires striking a balance between external, customer-driven quality metrics and internal, efficiency-oriented ones, even as manufacturing operations grow. It’s a tall order, but excelling on both fronts creates a strong foundation for building long-term success.
But how does product quality drive customer wins and profitability? Here are seven time-tested strategies.
1. Build expertise in meeting stringent quality standards.
Prospective customers and partners want to know that a manufacturer can understand and help them to attain their quality goals.
Standards set by the International Organization for Standardization (ISO) are invaluable in attracting new prospects willing to pay a premium price for the highest quality products. Chief among these is ISO 9001, the quality management system standard that has been widely adopted around the world.
Additionally, some industries face strict governmental mandates. For example, medical device manufacturers need certification for the United States Food and Drug Administration (FDA) CFR Part 11, which governs how electronic records and signatures are handled. CFR Part 11 validation simplifies medical device customers’ compliance with the FDA and provides an auditable trail of product quality.
2. Expand the definition of product quality.
Customers leave when product quality drops below their minimum expectations. They also leave when: Products arrive late. The labels or documentation are wrong. The service department becomes too difficult to deal with due to outdated, bureaucratic procedures. And product recalls make items worthless.
In short, product quality in customers’ minds goes beyond the actual product. That’s why quality manufacturing operations are critical to ensuring that customers remain happy and loyal.
For example, automated processes and electronic data interchange (EDI) communications can make a manufacturer easier to work with and cut the risks of human error. Similarly, real-time product and process monitoring can help identify issues before they lead to scores of defective products or disrupt operations to the point where the manufacturer misses a critical customer deadline.
Improving product and manufacturing quality does more than reduce customer churn. It also cuts the time and costs associated with return material authorizations (RMAs), warranty issues, service recovery, and recall costs—freeing manufacturers to cultivate new customers.
3. Make product quality the foundation of new products for new markets.
Market demand evolves over time, and successful manufacturers regularly identify the areas of opportunity in their markets and industries where no one has the production capacity to focus on. Then they act on it.
As noted earlier, maintaining customer-driven product quality results in time and cost savings, which can be invested in spinning off product line extensions and even developing new products.
Moreover, when manufacturers have already solidified their product and operational quality, they have a strong foundation on which to successfully enter new markets adjacent to those where they are established today—attracting entirely new prospects and customers.
4. Use product quality to support configure-price-quote (CPQ).
Configure-price-quote (CPQ) is becoming a popular growth strategy in manufacturing sectors where there is a high degree of complexity and customization. CPQ software can help a manufacturer and customer to quickly reach consensus on a particular product, along with its associated materials and costs, while reducing errors by up to 90%.
However, pursuing a CPQ strategy, where customers can tune products to their needs, requires each phase of product quality management and compliance be fine-tuned and highly efficient. This means quality processes and systems must be fast, scalable, integrated, and reliable to simultaneously maximize convenience, timeliness and accuracy.
Companies that have already invested in product and manufacturing quality are well-positioned to capitalize on a CPQ strategy at any time.
5. Educate customers and prospects on quality Initiatives.
Investing in product and manufacturing quality improvements is just one part of the equation. The other is making sure customers and prospects know about those investments—and more importantly how they translate into measurable results.
For example, once any standard certifications are in place, it’s important to educate customers and prospects on how being certified will help to them to validate product quality, streamline audits, and get products to faster with predictable delivery times—supporting their business goals while reducing costs.
There are many ways to integrate education into existing marketing, lead generation, and sales programs. Email blasts, short videos, blog posts, and social media, are just a few popular approaches.
6. Build and track customer trust.
Once a company becomes a customer, trust is the most powerful sales accelerator there is. Importantly, it‘s earned every time a product or service delivers more than is expected, garnering praise from customers and new prospects, alike.
Establishing a greater level of trust happen starts by revolutionizing quality, transforming it from a set of product specifications to redefining daily customer experiences.
Manufacturers often use the Net Promoter Score (NPS) to measure the relative level of customer trust and satisfaction in their customer bases. Knowing how customers perceive quality and which areas are most in need of improvement is essential. The NPS also has a word-of mouth-index which is a great way to track how quality is impacting referrals and new prospects.
7. Cultivate independent validation of your product quality.
After investing in product quality and measuring how it translates into customer satisfaction, manufacturers need to get the word out into the market. That means turning to the top source of validation that prospects rely on most: customers.
Word of mouth remains one powerful channel. But with the rise of generative artificial intelligence (GenAI), prospects increasingly rely on GenAI tools to search the internet and report back on publicly available case studies and rankings.
Some industry associations and analyst research firms publish product or company rankings based on Yelp-like customer reviews. Manufacturers should encourage their customers to participate in these types of reviews.
Additionally, companies that highlight customers’ comments and success stories on their website can drive more awareness among prospects that are searching the web—with or without GenAI—to draw up their short lists of potential manufacturers.
In this way, manufacturers can turn existing customers’ satisfaction with product quality into a scalable strategy for winning new customers and setting a foundation for long-term growth.
Contact the DELMIAWorks team to get started.