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 over a century ago, the renowned Italian economist Vilfredo Pareto observed that 80 percent of the land in Italy belonged to roughly 20 percent of the country’s population. He found that idea incredibly interesting and dug into it even more. What he discovered was that this principle is true in almost any free-market economy. The wealth of the marketplace is always concentrated in the hands of a small group of people.
Over the years, many great researchers and thinkers have found that this principle is true in almost every area of life and business. It’s so common, in fact, that we now call it the 80/20 Rule (or the “Pareto Principle”).
In business, you’ll almost always find the following to be true:
- 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 could go on and on. But the point is very simple: You can create big results by focusing on small inputs. In other words, being successful in business isn’t always about having the most products, employees, revenue, storefronts, emails, ads, etc. It’s much more important that you understand and embrace the fraction of these inputs that have the greatest impact on results. It’s about quality over quantity.
Here are some ways this principle plays out in the real world:
Quality Clients Require Fewer Resources
Fifteen years ago, entrepreneur Kevin Kelly wrote one of the most popular business essays of the 21st century titled 1,000 True Fans. In it, he fleshes out a very simple yet profound concept. He said:
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 idea is rooted in the fact that if you can create, on average, $100 in profit from 1,000 customers each year, that’s a $100,000 business. And if you can get 1,000 customers to spend $1,000 per year, that’s a million-dollar business. In other words, you don’t need millions of customers (high quantity) – you just need a few quality fans.
Quality Products, More Value
Here’s a quick quiz question for you: What’s more valuable? A larger diamond with visible flaws to the naked eye, or a slightly smaller diamond with a VVS grade and no visible flaws?
The answer is simple: The smaller diamond. Why? Because its quality is higher. Size means nothing without quality. Customers care about value first and size second. Consumers will pay more for a smaller bag of potato chips they like than a jumbo-sized bag of chips that don’t taste as good.
To build a successful brand, focus on producing quality products and services first. Everything else is ancillary to that objective. Your brand reputation for quality in everything you do will grow, and your customers will provide reviews and referrals. Your business will grow organically, and with it, the quantity of sales from loyal advocates and supporters.
Quality Products, Less Customer Service Hassle
Roughly 80 percent of your customer service issues and support tickets stem from 20 percent of your products/features. Generally, these are your worst quality products. You can alleviate the volume of service calls by eliminating and replacing inferior items and focusing on the highest-quality products. Your customer service staff can focus their time on improving your pre and post-sales processes, reducing cart abandonment, and thus increasing your sales.
Higher Quality Less Stress
At the end of the day, an investment in quality means less stress as a business owner, manager, or CEO. When you build your business around quality, you don’t have to worry about many of the problems that most companies deal with regularly (including customer service and supply chain problems).
Adding It All Up
Want to grow a successful business in today’s climate? Stop feeling the pressure to do more, more, more! Instead, embrace a quality-first mentality that prioritizes the 20 percent of input or causes that produces 80 percent of outputs or effects. This is where real growth happens and before you know it, you have the quality of products, services, staff, and the quantity of sales and profit.