By Steve Arendt, CEO Teeco Solutions
Sometimes the start of my day includes a stop at the coffee shop. Today, I could not help but overhear a nearby conversation about a transaction a person had had with a highly respected company who sells great products. In this particular conversation, it was obvious that these people would never do business there again. Furthermore, not one word was brought up about the product! All conversation was focused around the experience. To me, the complete outsider, it seemed that most likely the customer rep of this company was having a bad day and this energy was transferred to the customer. Most likely it was the result of a simple series of unfortunate events.
In this case the bottom line… the combination of a great product and bad experience lead to no more customer loyalty.
Suddenly I began reflecting on my experience of having owned a party rental company. For the most part we did provide great customer service and great products. Yet I would be remiss if I claimed 100% success in this. After all, we all have bad days, and nothing is perfect. A few questions came up as I began to reflect, and I thought I would seek your perspective on some of them. Here they are… Will you add your thoughts?
· As the owner, I had a finite amount of money to invest in the company. Should I buy the absolute best products to rent and use the left over money to invest in great employees and customer service training? Or should I buy a just enough quality that the customer will never question and spend more money on providing the best customer experience possible?
· What was important to my customer insofar as their perception of a quality product? Was it more about how sturdy the product was, how well it would hold up? Or was it more about the appearance of the product? After all, the sturdy stuff cost much more, and if my customer did not care, I could use the savings to buy machinery to upkeep the appearance (saving my operational cost) and buy a volume of inventory to take care of more customers on any given day. Effectively, this would allow me to increase revenues and decrease operational expenses. Yet on the other hand I may create a new headache/cost in the business. I would have to have systems in place to constantly cull out the less sturdy inventory that was broken or worn. A happy medium may have been to have a healthy cross mix in my inventory. Identify those pieces that absolutely needed to be sturdy (such as large pole tents-think safety) and those items that could fit the mold of less capital outlay with an expected shorter lifespan.
What is your thought on any of this?? Leaving a comment is easy, go ahead.
8/13/2010
Tom Davis
8/26/2010 11:19:44 AM
I think you said it in the begginning about the person not doing business with the company ever again. I think Product tends to be secondary in most markets to relationships and experiece with the salesperson. Most sales are based on relationships. For example, our tent supplier we see a few times a year versus maybe once a year by others. SO we have a relationship beyond the order. Relationships are first and the quality and condition of the product tends to be second in our market. I am sure it may be different in other markets though. We tend to have a fair amount of repeat customers and need to know that in our sales training. Just my 2cents.
Steve Arendt
8/27/2010 8:42:24 AM
Tom, Thanks for your thoughts.
Daryl Sensenig
10/17/2012 9:26:00 AM
That is great food for thought. I think many companies go with lower quality and just pick up the pieces when a big storm comes. This is likely the most cost effective. However, I can’t put a dollar figure on being able to look the customer in the eye and say. This tent is sturdy and safe. Your wedding will be great in almost any weather. It is a long term play and the payback can be slow, but building a solid reputation is well worth it. Daryl Sensenig Tents For Rent LLC http://paevent.com/tfr
Steve Weaver
10/18/2012 8:30:38 AM
I think you nailed our situation. Sadly there isn’t an endless supply of money to spend. We purchase what we believe to be good quality products, but as well struggle with the cleaning especially in the extreme busy season. I think I need to sit down and talk about our options as we move forward with next year’s plan.
Tote Randall
10/18/2012 11:35:57 AM
After 18 years in the party rental business I would say that if you don’t skimp on good customer service, you will never have to skimp on equipment. But, there are plenty of other variables out there who don’t play by those rules (DOT,OSHA,EPA,IRS).
Dan Hooks
10/20/2012 9:23:30 AM
Being in business for over 50 years, this subject never leaves the conscious mind when deciding on new equipment for the next year. My father believed wholeheartedly in the stance of buying the highest quality merchandise, but then pricing it accordingly. Fortunately for him, the infancy of this industry allowed that, but new competition seems to lean toward lower prices to gain business which forces them to purchase cheaper products in order to survive. I think your last statement wrings true with our current approach. We purchase the highest quality products where safety or liability concerns are greatest and tend to gravitate towards more price conscious pieces where visually the average consumer does not detect a difference. A chair is not a chair, but you have to weigh the factors involved with possibly replacing it a little sooner because of the inferior nature of it against buying a chair that is clearly made better provided safety is not compromised. It is a complicated mix of decisions to say the least.
Dan Hooks
10/20/2012 9:23:53 AM
Being in business for over 50 years, this subject never leaves the conscious mind when deciding on new equipment for the next year. My father believed wholeheartedly in the stance of buying the highest quality merchandise, but then pricing it accordingly. Fortunately for him, the infancy of this industry allowed that, but new competition seems to lean toward lower prices to gain business which forces them to purchase cheaper products in order to survive. I think your last statement wrings true with our current approach. We purchase the highest quality products where safety or liability concerns are greatest and tend to gravitate towards more price conscious pieces where visually the average consumer does not detect a difference. A chair is not a chair, but you have to weigh the factors involved with possibly replacing it a little sooner because of the inferior nature of it against buying a chair that is clearly made better provided safety is not compromised. It is a complicated mix of decisions to say the least.
Dave Robertson
12/5/2012 5:27:06 PM
Something that no one has touched on: When buying lower grade equipment, to save money, don’t forget the labor $ you lose in repairs, transportation & storage. I tend to see lesser priced equipment to generally be more fragile, & require more labor time in packaging, and care taken transporting & handling.