Price, Quality, or Service: Pick Two

John Tabita
John Tabita

There are some advantages about living in a less-populous section of the country. My California relatives complain about the two to three hour wait when renewing their driver’s license. My total wait time … in and out in 20 minutes.

Or like shopping at the warehouse discount stores. When I lived in California, a trip to Costco or Sam’s Club was like negotiating lanes in rush-hour traffic. (Another thing I no longer have to deal with.) No matter which direction you turn, there was another shopper, a small child to avoid, or a shopping cart parked center aisle, obstructing traffic. During every trip, I would ask myself, “Is it really worth all this to save money?”

You may have heard the saying, “Price, quality, or service. Pick two.” My shopping experience merely demonstrates the fact that no business—not even the Costcos or Sam’s Clubs of the world—can successfully or consistently provide the best service and the highest quality at the lowest price. Saving money is great, but the trade-off is that low prices drive in crowds of shoppers which severely diminishes the quality of the shopping experience.

Or compare the difference between going to Home Depot verses your local hardware store. Since I lack the home improvement gene, a trip to Home Depot is always an exercise in frustration. Why? Because the chances of getting any customer service help in one of the aisles is slim to none. Quality products at great prices … but lousy customer service.

And because the motor vehicles is a government-run monopoly (at least here in the U.S.) they’re not required to provide price, quality, or service. No wondered everyone hates going there.

Most of us in the web consultancy business tend to focus on providing quality and service. For me, “service” meant the consultative process I would take clients through to determine the goals, objectives, and results they want from their website. I see “quality” as both the end-product I provided as well as the quality of the experience, i.e., how easy it was to work with me.

This works well when dealing with a relational buyer, one who values having an expert he can trust more than getting the lowest price. But what about the transactional buyer? This is the person who drives back and forth between two different Toyota dealerships and plays each salesman against one another to get the best possible deal on the car he wants. Most of us disdain this type of buyer as a cheapskate and a “pain in the rear.” But is that always the best reaction?

Suppose, in addition to targeting relational buyers with quality and service, you could also target transactional buyers by removing either quality or service from your sales process and competing on price? Don’t misunderstand—selling on price alone is a losing proposition. But what about selling on price and quality ? Or price and service? Could you capture a portion of the mid- to lower end of the market and drive in additional revenue, profit, and perhaps some residual income? In my next article, I’ll explore some of these questions and give you some ideas how this might be done.

How about you? Do you consciously compete on two of the three? Or are you frustrated trying to be all things to all people? Have you given any thought to the other types of buyers you’re not reaching? Or has your approach brought in a consistent clientele to pay the bills? Post your thoughts in the comments below.