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Gold Plating dilemma

Six Sigma – iSixSigma Forums Old Forums General Gold Plating dilemma

  • This topic has 6 replies, 6 voices, and was last updated 17 years ago by McD.
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  • #40204

    ROSS
    Member

    In the reality of business today, what is “good enough” is “good enough.” As in, don’t deliver the 2006 Mercedes-Benz M-Class when the 1984 Ford Bronco meets the customer needs.  So many of us have spent years wanting to go “all out” to please the customer–is that really necessary?  Is the gold-plating approach outdated?  And, how do we go about changing the culture to deliver: “what is good enough and only what is good enough?”  Stuck in a business culture dilemma.
     
    From a quality team targeting to:  decrease costs and meeting customer expectations

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    #124070

    Paul Gibbons
    Participant

    Tony,
    I don’t think you can generalise about customers all wanting the same thing and therefore businesses must be flexible in their approach to delivering products and services that can be customised to suit individual needs.
    I read a paper somewhere (I think it was in a marketing journal) which suggested that this years latest customer enticement will be next years standard feature. The paper suggested that this was not sustainable solution to maintaining competitive advantage and market share. In the automotive industry in the UK this is very typical, for example: air con, abs and cd players are now standard features on many cars but previously they were expensive options.
    Paul

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    #124071

    OLD
    Participant

    Tony:
     
    Give the customer nothing less than what they are expecting – every time……
     
    BUT,
    Help the customer define what it is they want/need/expect (review their options). Show them what a FORD can do and maybe they don’t need a Mercedes? Add value. Know the customer’s application of your product/service. Help them succeed. Listen.
     
    AND,
    “Delight” the customer whenever possible (pass along savings, enhanced product/service features, improved lead times, etc.)
     
    AND,
    Never take your process or your customer for granted – there is always room for improvement in your process and there is always another supplier that would love to take your business.
     
    AND,
    Know when your company would be better served by serving other customers (some customers demand “gold plating” and want to pay you as if it were brass). Give your time, effort, and resources to those customers that know you too, need to make money.
     
    How does one change the culture? By establishing and communicating the desired action/behavior and by doing and doing and doing again.
     Good Luck!   OLD

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    #124074

    McD
    Participant

    Way back when you took your Black Belt training, they taught you about Kano analysis.  Chances are they breezed over it, because uncovering the transfer functions is hard work and they didn’t want to scare you.  But in that chart is the answer for how to deliver what your customer sees as a gold plated solution at a minimum cost.
    Yes, it’s hard work. That’s why you get paid the bug bucks.
    –McD
     

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    #124086

    Mike Carnell
    Participant

    Tony,
    I really hope that wasn’t a serious question. I don’t see that many companies that really have as a core value “going all out for the customer.”
    In the words of Dr. Phil: “Ask Maytag how that is working for them.” A premium price in a very competitive market.
    Who do you think makes more margin Mercedes or Ford. I haven’t seen any employee prices being offered by Mercedes.
    Toyota’s success in living the continuous improvement mentality is a matter of record. They aren’t offering the employee pricing to the public either.
    At the end of the day if you are delivering the best quality and have the lowest cost who is “the last man standing” in a down market?
    Where is the business dilemma?
    Good luck
     

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    #124093

    Don2
    Participant

    Tony,
    I agree with your theory . . .  if,  you monopolize the market. Your customer have no choice but to accept whatever you offer or whatever he only needs, your customers will try to make themselves happy for all what you can offer because they have no choice, BUT . . . if you are playing in the market with other competitors well that is another story . . .  if you cannot offer them the best then, somebody will. maybe your best is still not the best because there’s no such thing as constant . . . only change! A lot of improvement can still be made. . .  that’s why there are a lot of quality system available for everybody.
    Don2

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    #124095

    McD
    Participant

    “I agree with your theory . . .  if,  you monopolize the market. Your customer have no choice”
    Ummmm … Mike just gave you examples of three competitors in a market with dozens.  Customers are more than willing to pay premium prices if they perceive they get value.
    This is not magic, it isn’t even all that mysterious.  Like Toyota, keep your costs down.  Do the market research so you know the transfer functions.  Then do the math.
    –McD
     

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