When it comes to running a business, it’s easy to get swept up in the idea that more is better. However, this is rarely true. In most cases, quality is a better measuring stick than quantity. This is not to say that businesses don’t want quantity; they do. Quantity is needed to grow the business. This business blog looks at how you can build the right foundation by focusing on quality first, and from it, quantity happens in areas like leads, sales, revenue, and profit.
The Power of Quality in a World of Quantity
A little more than a century ago, the eminent Italian economist Vilfredo Pareto discovered that around 20% of the land in Italy belonged to the country’s inhabitants. He was intrigued by the concept and probed more into it. He observed that this theory holds true in nearly every free-market economy. The marketplace’s wealth is always concentrated in the hands of a small group of people.
Many brilliant academics and philosophers have discovered throughout the years that this idea holds true in practically every aspect of life and business. It’s so frequent that it’s now known as the 80/20 Rule (or the “Pareto Principle”).
You’ll virtually always find the following to be true in business:
- 80 percent of revenue comes from 20 percent of products/SKUs
- 80 percent of productivity and output comes from 20 percent of employees
- 80 percent of problems stem from 20 percent of issues
The list might go on forever. But the lesson is simple: By focusing on little inputs, you may achieve enormous effects. To put it another way, company success isn’t necessarily about having the most items, people, income, stores, emails, commercials, and so on. It is far more critical that you grasp and appreciate the subset of these inputs that has the biggest influence on outcomes. It’s all about value above quantity.
Here are some examples of how this approach is applied in practise:
Quality Clients Require Fewer Resources
Entrepreneur Kevin Kelly published one of the most popular business articles of the twenty-first century, titled 1,000 True Fans, fifteen years ago. He fleshes out a really basic yet deep notion in it. He stated:
To be a successful creator you don’t need millions. You don’t need millions of dollars or millions of customers, millions of clients or millions of fans. To make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor you need only thousands of true fans.
Kevin Kelly’s concept is based on the reality that if you can make $100 in profit from 1,000 consumers per year, you have a $100,000 business. And if you can convince 1,000 consumers to spend $1,000 every year, you’ve made a million dollars. In other words, you don’t need millions of clients (high quantity) – you simply need a few quality fans.
Quality Products, More Value
Here’s a little pop quiz for you: Which is more valuable? Which is better: a bigger diamond with obvious faults or a slightly smaller diamond with a VVS grade and no apparent flaws?
The solution is straightforward: the smaller diamond. Why? Because it is of superior grade. Without quality, size means nothing. Customers are concerned with value first and size second. Customers will pay more for a smaller bag of their favourite potato chips rather than a larger bag of chips that don’t taste as nice.
To develop a successful brand, prioritise the production of high-quality goods and services. Everything else is secondary to that goal. Your brand’s reputation for excellence in all that you do will develop, and your consumers will submit evaluations and referrals. Your company will develop naturally, as will the number of purchases from dedicated advocates and supporters.
Quality Products, Less Customer Service Hassle
Approximately 80% of your customer service difficulties and support inquiries are caused by 20% of your products/features. In general, they are your lowest-quality items. You may reduce the number of service calls by removing and replacing low-quality goods and focusing on high-quality products. Your customer support representatives may devote their time to refining your pre- and post-sales procedures, lowering cart abandonment, and increasing sales.
Higher Quality Less Stress
Finally, investing in quality equals less stress as a business owner, manager, or CEO. When you establish your firm around quality, you avoid many of the issues that most businesses face on a daily basis (including customer service and supply chain problems).
Adding It All Up
Want to build a successful business in today’s environment? Stop feeling pushed to accomplish more, more, more! Instead, adopt a quality-first mindset that prioritises the 20% of inputs or causes that yield the 80% of outputs or impacts. This is where true development occurs, and before you realise it, you have the quality of products, services, people, and sales and profit.
