Quality as a Marketing Tool

Quality is more than just cost containment.  Dennis Zink interviews Bob Theis, a SCORE mentor and quality expert, whose experience with quality standards at major corporations showed the correlation between quality, customer satisfaction and company success.

Published: Monday, June 9, 2014.

If you are over 40, you probably remember the story of the ill-fated Sony Betamax recording technology. Sony was the undisputed king of the electronics hill decades ago, with its Trinitron televisions and Walkman portable music players (forerunner to the iPod and other MP3 players). Sony created a concept it called time-shifting: Its Betamax equipment, for the first time, gave people the ability to record a TV program and watch it later. Betamax boasted two hours of recording on a tape cartridge. This was all well and good until Panasonic upped the game with six hours of recording using its VHS tapes. It was widely agreed that Betamax was a superior recording technology compared with VHS. To remain competitive, Betamax sold a contraption called a stacker. The stacker held four cartridges, giving it an eight-hour recording capability. There was only one problem: The stacker didn’t work very well — it jammed often and didn’t always eject. Customer complaints rolled in. According to Sony’s product manager at the time, Bob Theis, “We were arrogant in how we dealt with those customer complaints.” And we all know how that turned out.

Theis, a local SCORE mentor who lives in the Sarasota area, said he learned an important lesson, one he applied after he bought a 100-year-old company in Syracuse, New York, called JR Clancy. This company supplied everything used backstage in theaters and auditoriums, such as customized rigging and lighting. It had significant problems shipping orders that were correct, complete and fast. “We were missing on five out of six cylinders, and it was costing us a huge amount of money,” Theis said. “Customers would call and complain — it was frustrating.” He decided to use a quality standard, known as ISO — the French acronym for International Organization for Standardization — to improve the company’s performance. The particular standard Clancy used, ISO 9000, took the company 18 months to implement at a cost of approximately $250,000. Theis feels it was well worth it. “We had quality problems, we needed a framework,” he said. “We needed discipline, and it gives you that as well.”

Clancy began by identifying and writing down all company procedures and processes. Then it studied them to determine which worked well, what needed to be improved and if there were some things that were unnecessary and could be weeded out. Theis spent two months in the field, visiting customer’s job sites, dealers and installers, asking “What do you guys really need?” The answer that came back was, “You guys have to be on time, you have to be complete with your order, and the order has to be correct.” Clancy decided to treat its dealers, installers, its own employees and even its employees’ families as partners. The company took as its goal and motto “Make Our Partners Successful,” or MOPS. Clancy measured its performance on time, completeness correctness. “We became obsessive about tracking those metrics,” Theis said. Another important metric was partner satisfaction. Clancy measured this with feedback from field visits and questionnaires, and the company did everything it could to make its partners successful. “We turned over every process in our company, and we went deep-dive into it,” Theis said. “We looked at everything from how we address people when they call in to how we ship the box and what the box is going to look like when we ship it out. Every detail of our operations was defined. “Could you get by with something less? Sure you could, but we wanted to have absolutely everybody, every function, included in this. And to do that, you need the top management to be the real driving force.”

Theis developed a program he called The Extraordinary Guarantee, which essentially said: “We are 100 percent committed to the on-time, complete and correct shipment of your equipment. If you feel we have not met this commitment in any way and that has caused you to spend additional time or money, then please attach a note with a brief explanation and deduct your cost from this invoice when you send in your payment.” That guarantee was printed at the bottom of each invoice, on price sheets and in emails that were sent out to all of Clancy’s dealer partners. “We had a logo made, and we marketed based on it,” Theis said. Of course, someone would immediately contact the customer to resolve the situation if a problem did occur.

“Our sales, our profits, our backlog exploded. We were on ‘Inc.’ magazine’s List of Fastest Growing Companies two years in a row, and I’m certain that the sale of my company in 2011 was helped because we were now a quality company.”