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A couple of weeks ago I went camping. I haven’t camped in over 2 decades, so I needed a tent.  After checking a couple of placed on line, I decided to go with the Mountain Equipment Co-op Wanderer 4.  The tent was thoughtfully constructed with a full fly and lots of useful features. But it wasn’t until the last night of the camping experience when a deluge struck that I realized just how important quality was to me.  Despite being stuck in a tent during an extremely heavy rainstorm, we were dry.  The tent outperformed my expectations.  Looking back, the other cheaper tents I saw wouldn’t have performed under those conditions.

Cheney Window and Door is another example of quality and service.  When it came time to replace the windows and doors in our home, we were thrilled with the quality of their product, but more important was the service we received.  The installer was second to none; he took a great deal of care and added some extra touches along the way.  The owner also offered some great renovation advice, and pointed us in the direction of our next successful venture, soffit and facia.

Now this provider was a long-time installer who was preparing to retire, but because Cheney gave us the recommendation, he took our job.  Again, we delighted with the entire experience. 

The final exterior improvement on our list was paint. I knew that it would be tough to find someone who met my standards, having done my share of painting.  A friend had recently had some work done by a painter who came highly recommended to her, so I took a chance.  His work was amazing.

Pricing for Quality

Could I have paid less for these services? Yes.  But I opted for quality, and in the end with a job well done, I was further ahead.  Will I shout these companies’ praises from the rooftops?  You bet!

In a world where all too often we are disappointed by the quality of the goods and services we purchase, it is nice to know that excellence still exists.  This fact provides an opportunity for businesses: customers are willing to pay for quality and great service.  But make sure that you deliver, because bad news travels fast.  My neighbours thought they were buying and paying for quality and service but instead received a nightmare.  I won’t be contacting that company for their services any time soon.

Recently I picked up a small box of Godiva truffles to share with my spouse.  What a disappointment.  They were hard and the flavour was inferior.  At a price of $3.33 per truffle I felt I had been ripped off.  You see, truffles from Eitelbach at $1.50 per truffle are heaven in a box.  Their truffles are fresh and they offer a nice variety of flavours.  Soma offers its truffles at $2.00 per and are also excellent.

With other better quality truffles available, how can Godiva sell theirs at premium prices?

Godiva is held by a Turkish confectioner Ülker Bisküvi Sanayi, who purchased the company in 2008 from Campbell Soup which previously held it for 40 years.  Eitelbach Baumkuchen Pastries Ltd. is a small Toronto based privately held company opened in 1989 and has two retail locations and an on-line store shipping to Canada and the US.  Soma Chocolatemaker is owned by David Castellan, a former executive pastry chef at Oliver Bonacini restaurants. It opened in 2003 and has one retail location in Toronto’s Distillery District and online ordering shipping in Canada only.

How does Godiva do it?

The majority of chocolate consumers do not eat fine chocolate on a regular basis, if at all. So when it comes to special occasions or communicating thoughts of affection, Godiva is seen as a safe bet.

So why did I purchase the Godiva truffles?  This was a spur of the moment purchase, with no Soma or an Eitelbach in the vicinity and no time to order from their websites.   I relied on my perception of Godiva chocolates, the perceived perception my spouse would have, and the reassurance that the higher price provided that I was buying quality chocolate.

But because I have tasted quality chocolate, I knew instantly on tasting the Godiva truffles that I had been had.

That is the key to successful marketing – having customers believe a desired attribute about your product.  We believe that Godiva, Soma, and Eitelbach offer quality truffles.  In the latter two cases I believe it to be true because I’ve tasted them and know they are good quality chocolate.  In the case of Godiva, I was relying on truth in marketing and appropriate pricing. 

I would liken Godiva’s strategy to Starbucks’ (see post “The Starbucks Strategy”) in that 15-20 years ago before relatively good 70% dark chocolate graced the shelves of every grocery and drug store in the land, Godiva was relatively speaking, fine chocolate.  However as the years passed and demand for good chocolate increased, Godiva opted to pursue a volume strategy, while getting by on status quo quality.  

This brings me to my last point – making the customer believe something that you can’t or won’t deliver on leaves a lasting negative impression.  The worst kind of PR a company can have.  And while an entity as large as Godiva may be able to withstand a some disappointed customers, many small businesses whose reach is a great deal smaller and depend on repeat business, can’t. 

The moral of this tale?  Tell an honest story, deliver on your promises, and price appropriately.