The number of certifications for businesses continues to grow year after year. While ISO standards have become commonplace for many companies in Europe, few companies question whether such an investment provides a good return on investment.
To better understand this issue, Esther Sleilati, GEM DBA 2011,an assistant professor at Notre Dame University, explored the use of the ISO 9000 standard in Lebanon. "I investigated the impact of ISO 9000 on customer satisfaction in the packaging industry in Lebanon. This sector was interesting because it was a B2B sector with great variety in terms of products and customers."
Are your customers knowledgeable about ISO practices?
Esther's work highlighted a key question for any company considering investing in ISO 9000 certification: Are your customers knowledgeable about ISO 9000 practices? "This was an important moderating variable. When customers were ISO certified or well aware of ISO practices, they were more favorable to ISO certified suppliers. When customers knew little about this certification, they had equal expectations for certified and non-certified suppliers."
Certification does not translate to better margins
Another interesting variable that impacted the value of ISO certification was the price of a supplier's goods. Esther's research underlined that while customers who knew about ISO certification were willing to pay a slight supplement, companies should not hope to increase prices by much after obtaining an ISO 9000 certification. "This highlights the fact that companies shouldn't invest in ISO certification simply to increase their prices."
The importance of knowing your customers
The packaging industry in Lebanon provided a stark example of local versus international customers. "If a company's customers were all local, expectations for the ISO 9000 certification were pretty much non-existent. However, most international customers require their suppliers to be ISO certified." This result confirms the fact that managers should know if they are dealing with certified or noncertified customers. If a company's customers are non-certified, then no need to waste money on ISO 9000 certification!
"The certification process is costly and time-consuming. If you're going to invest in certification, your customers should already be aware of the benefits of an ISO 9000 certification. If that's not the case, there's no point in getting certified unless you're willing to implement a campaign to raise awareness about the added value of this certification."