The concept of cost of quality (COQ) has been around for decades, but applying it to business is difficult. The adage “quality is free” (coined by Philip B. Cosby in his book by the same title) does not simply mean that you don’t have to pay for it. It means that you are likely already paying to deliver “quality” to your customers.

What cost of quality isn’t

Quality used to be synonymous with “expensive” because higher-quality products typically cost more. Makes sense, right? For something to be “quality,” you must pay for premium materials, premium workmanship, and premium service. You can’t compare a Rolls Royce to a Ford Escort and not see the disparity in quality.

However, these days consumers expect value instead of quality. The difference between the two can be defined as the following:
Quality: The usefulness or worth of something
Value: The usefulness or worth of something relative to its price

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