Need advice on how to add value in the '90s?

• Author: Deitsch, Mimi

Need advice on how to add value in the '90s?

Quality--the ultimate

financial weapon

"Perceptions is the fundamental keynote of quality," declared Larry Liberty, president of the Liberty Counsulting Group. "If the customer thinks the product is outstanding, then it is," he stated.

Pointing out that customers who are happy come back and spend money, Liberty quoted the following statistics:

* The average "wronged" customer will tell eight to 16 people.

* Ninety-one percent of unhappy customers will never purchase services from you again.

* Companies lose 14 percent of their customers because they are dissatisfied with the product and 68 percent of their customers because of an attitude of indifference by the owner, manager, or some employee.

* It costs about five times as much to attract a new customer as it costs to keep an old one.

* A problem that will cost $1.00 to prevent will cost $10 to fix when it is broken before it is sold, and $100 if it breaks when in the public's hands.

Liberty stated that he hoped that his presentation would make each financial executive "an active investigator of the quality of the quality process." He declared that while many companies have quality improvement programs today, some work and some don't, because the companies are not talking to customers.

"If your business methods and procedures are designed to make your business efficient and not to help the customer, then your methods and procedures are out of context with quality," he said. Customer satisfaction, employee satisfaction, and profitability are linked, and quality improvement leads to market share gain and ultimately to higher capacity utilization, greater employee productivity, and lower costs.

Liberty concluded that quality improvement never ends. It happens through people, and it is a journey that requires energy and attention all the time.

Can health care

costs be reduced?

"Based on current rates of spending, current GNP growth, and the current structure of the economy, if health care cost inflation continues at its current pace, by 2035 health care will absorb 100 percent of the gross national product," proclaimed Dallas L. Salisbury, president of the Employee Benefit Research Institute.

He called this "absurd" but pointed out that there is evidence that "we are not yet ready to take the steps to bring [increases in health care costs] under control." While many have pointed to the Canadian system as a possible solution, Salisbury pointed out...