Have you ever heard of Cutco? If so, your mom or uncle probably has some Cutco knives in their kitchen. You might even know about Cutco Cutlery from receiving letters in the mail to sell their product. The latter is how I know about Cutco, and that letter is what sparked my short summer stint as a Cutco salesman and my detailed knowledge of the product.
I should first begin this post by mentioning the company’s legitimacy. If you search “Cutco scam” in Google, a whole slew of online reviews can be found that aggressively ridicule Cutco’s sales tactics and foundational structure. Because the company relies on young, college-aged salespersons, many customers end up being the close family and friends of new representatives. The complaints range from “guilt-driven” purchases to lies found in the recruitment letter regarding wages. Even though some people think the company’s sales technique is sleazy, the product quality and customer service are undeniably phenomenal.
The word “quality” is mentioned three times in this short video above and is the clear choice as Cutco’s primary competitive priority. So how does Cutco deliver quality to their customers? They do it by managing their external failure costs and by perfecting their total quality management (TQM). External failure costs arise whenever a customer notices a defect or problem with the product after it has been purchased. External failures are rare for Cutco products, but when they do occur, it’s typically years after the original purchase date. By this time, the warranty that accompanies other top-selling brands has worn off, but not Cutco’s. Cutco is so confident in the quality of their product that if anything breaks at any point in time, they will replace it at no cost to the customer. Discussing this “Forever Guarantee” warranty with customers was always a crucial selling point during my historic career as a Cutco salesman and often closed a lot of deals. Check out this link to hear from an actual customer:
Compared to their competitors, Cutco’s warranty and management of external failure costs separate the company’s product as top quality. The “Forever Guarantee” keeps the customers happy, and as a result, Cutco successfully completes the first aspect of TQM. The second aspect, employee involvement, is ensured by Cutco in two different ways. First, Cutco employs quality inspectors who check the quality at the source at the production facility in Olean, NY. Second, Cutco encourages employees and salespersons to work together and coach each other. I always received advice about how to improve sales, and as time went by, I would coach the new team members on how to best connect with customers. Cutco would even go as far as hosting a “summit” for all young salespersons across the country. These summits were designed to increase networking, improve teamwork, and inspire drive in each attendee. I don’t think any other competitor would go to the lengths Cutco regularly does to ensure employee involvement.
The third and final piece of TQM is continuous improvement. The most important way that Cutco continuously improves is by looping back to customer satisfaction. As time progresses, technology improves, and customer preferences change, it is crucial for companies to continuously gauge their standing with customers. Even though Cutco already provides the “Forever Guarantee”, they have recently implemented new strategies like free, in-home sharpening for busy customers and a 15-day money back guarantee for customers who want to send any purchases back. These major improvements have proved to complete Cutco’s mastery of TQM. Because Cutco is able to mitigate external failure costs through their “Forever Guarantee” and perfectly blend customer satisfaction with employee involvement and continuous improvement, they successfully and consistently deliver a high-quality product to the market.