That’s true, but that’s not what a drop in the bottom line means in this context. If you reduce quality, you also reduce your cost of production. So you’re right if there’s no change in sales numbers at all, you were spending too much on something you didn’t need, and you made a good adjustment. But more often, these adjustments weigh the drop in sales vs the increase in profit that results from the lower cost. If the expected drop in revenue is offset by the increase in take home, they don’t care and keep it that way. What’s really shitty is that once the revenue trend stabilizes and customers adapt to the new lowered quality, there’s nearly always a price increase.
Customers tend to view quality more holistically than that, though. Not a lot of people are going to flip their conception of product quality on a single change, but will after a long series of changes. Once a company gets that reputation for poor quality, it’s not as simple as reversing the last corner they cut. It’s a hole that takes a lot of changes to dig out of. More than most companies are willing to reverse.
I mean, sure. If a drop in “quality” doesn’t result in a drop in sales, then that quality wasn’t something the consumer actually cared about.
That’s true, but that’s not what a drop in the bottom line means in this context. If you reduce quality, you also reduce your cost of production. So you’re right if there’s no change in sales numbers at all, you were spending too much on something you didn’t need, and you made a good adjustment. But more often, these adjustments weigh the drop in sales vs the increase in profit that results from the lower cost. If the expected drop in revenue is offset by the increase in take home, they don’t care and keep it that way. What’s really shitty is that once the revenue trend stabilizes and customers adapt to the new lowered quality, there’s nearly always a price increase.
Customers tend to view quality more holistically than that, though. Not a lot of people are going to flip their conception of product quality on a single change, but will after a long series of changes. Once a company gets that reputation for poor quality, it’s not as simple as reversing the last corner they cut. It’s a hole that takes a lot of changes to dig out of. More than most companies are willing to reverse.