Quality Is in the Eye of the Beholder

As companies look to cut costs and widen margins, product quality often suffers. You might think that consumers acutely sense changes in a product’s quality and vote quickly and accordingly with their wallets. But new research shows that their perceptions often lag years behind the actual changes—for better and for worse. We studied the relationship between actual and perceived quality for 241 products in 46 categories over a period of 12 years, using Consumer Reports ratings to gauge actual quality and Total Research’s annual surveys of more than 30,000 consumers to measure perceived quality. When product quality changes—either improving or declining—consumer opinions about the product begin to shift within that same year, but not by much. Most of the perception catch-up, in fact, happens after the second year following the quality change. For consumers’ perceptions to fully adjust and accurately reflect products’ true quality takes five to seven years, on average, depending on many factors, including the type of product, the strength of its brand, and how often it’s purchased. For example, consumers in this study were relatively quick to gauge changes correctly in the quality of toothpaste (3.9 years) compared with gauging changes in refrigerators (7.1 years) and tires (9.5 years). While people were quicker to sense quality declines than improvements, they noticed improvements faster and declines more slowly in brands with good reputations. This work has several strategic implications. First, managers should track and compare both actual and perceived quality measures for their products to reveal any gaps and determine how those gaps might be changing. Second, they should carefully integrate their marketing strategy with their product quality strategy. A quality improvement that will be profitable for one product may not be so for another if the perception gap will take a decade to close (indeed, other studies have found that it takes five to ten years for quality improvements to translate into higher profits). Finally, managers should exploit asymmetries and lags in consumers’ perceptions of quality as they attack and defend in the marketplace. Knowing how long it will take perceptions to catch up to reality—for your own products and for those of your competitors—can help you time your competitive maneuvers.

Quality Is in the Eye of the Beholder

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