The Better Not Cheaper Mentality
While many manufacturers are compelled to drive costs down because they believe that lower costs gets them more volume and more market share, we all know of successful and prominent companies that stake their brand on premium quality, and live up to that reputation. With uncompromising standards they stay true to producing reliable, durable products while they solidify a high level of trust with their loyal customers. This is while they are reaping the rewards of their ever-increasing share of the market.
I had the opportunity to chat with two leaders in Canadian manufacturing about the “better not cheaper” mentality. It’s pretty difficult to see any flaw in their business models, especially given their prominent standings in their respective industries.
So why not jump into the fray?
For Stephen Schroeter, Senior Vice President, Sales, Marketing & Administration at Napoleon, the answer is simple; “We have always believed better before cheaper, it has always been our motto. Just put a better component in over a cheaper one. In the long run people want the better product.”
Napoleon has been providing total home comfort for over 30 years and is a company that is well known for their commitment to high quality, durable products. Just ask your neighbour how long he’s had his Napoleon grill for, he’s likely to say “oh, 20 years or so…” Built to last.
“We’re making furnaces now here in Barrie. It’s a tough challenge; we’re going head on against five or six very large companies. So, we decided that we wouldn’t hit them at the price side, but that we would make our product a little bit different. We think our furnaces are the best looking in the marketplace. We have a patent on the shape and design, and on the ignition window that shows the owner exactly how the furnace is running.” Stephen Schroeter, Napoleon
Napolean feels that if everyone is going in the “produce it as cheap as possible” direction, they want to go the opposite way and stand out. In addition to being the most efficient two-stage furnace on the market it is also the quietest, and the best looking. Gone are the days when you needed to hide your furnace in the back of the basement. They are taking the needs and desires of their customers and putting them forefront into the design of all Napoleon products.
Vernon Solomon, owner of Environmental Systems Corporation (ESC) stands by that same sentiment. He noted that many manufacturers run the race to make it faster and cheaper.
“Who can be ten dollars cheaper? Who can take another four ounces out of their equipment? Everything is, how thin can we make it? It only works because everyone wants to do something for less. That’s not what we are about.”
So ESC doesn’t join that chase and instead they build systems that are of the utmost highest quality, incorporating technology and details that make their systems better.
ESC builds cleanrooms and custom HVAC environments for use in critical environments. It’s a niche market that they have built an exceptional reputation in. Like all businesses do in their lifespan, they’ve done different things differently and tweaked their business model, but they have always maintained a commitment to creating the highest quality of product.
“What our customers like is our attention to detail. We come at it from a service person’s perspective. The things that we build are accessible and serviceable.” Vern Solomon, Environmental Systems Corporation
The operational uptime on ESC systems is better than 99% – this is less than 8 hours a year that their systems wouldn’t be functioning. ESC spends more time on design and uses high quality off-the-shelf components that their clients can easily find through local wholesalers when needed. Their customers pay a premium price for a premium product that, in the long run, is more cost effective and efficient.
“It’s always the same; you can have it better, faster or cheaper. We are in a sensitive, critical environment business that, if you produce a product that doesn’t deliver what it is supposed to do, there are hundreds of millions of dollars, or lives at risk. For us it’s a race to better quality and better efficiencies.” Mike Jerry, Chief Operating Officer, Environmental Systems Corporation
Whether the end goal is to sell 100,000’s of product into a market place of millions or sell a few of, into a market place of thousands, both Napoleon and ESC have tremendous success in their industries to show that the old adage of making stuff “built to last” is far better than “built to be cheap”.
Jane is editor-in-chief and writer for Sunday Crush. She lives in Barrie, ON.