In business strategy and theory there is a concept of under promising and over delivering. This means the business strategy is built on doing more than the customer expects. Some examples of this include telling the customer their product will ship on Wednesday when you know it will ship on Monday. Or, it could be including an extra pair of socks in an order of 6 when the customer wasn’t expecting it.
This strategy brings up several points that are sound and one that isn’t. Let’s take a look.
Great Business Strategy: Setting Customer Expectations
If you know there is no way you are going to be able to ship the product on Wednesday, and yet you tell the customer that so they will be happy, it isn’t an effective business strategy. It may buy you time before they are calling back upset, but really, that is just delaying the inevitable.
The main problem is that it isn’t based on customer satisfaction. This is actually overcommitting and under delivering– a surefire way to unhappy customers.
Instead, commit to something realistic for when life happens- for example, there’s a delay in the supply chain, a key employee is out sick, or changes need to be made to the product before it can ship. Communicating a time range, rather than a specific date, allows for potential problems to be addressed while still meeting customer expectations.
Another Great Solution: Trumpeted and Surprised Bonuses
Some companies lay out specific rewards they are giving customers – these are “trumpeted”. When an auto dealership announces they will give to a charity for every purchase, this is an example. When you get a free gift with purchase as a bonus and you weren’t aware of it, it’s a surprise. One company I knew gave client gifts after they spent a certain dollar amount with the company, but the clients weren’t aware of that until the gift actually arrived.
These are both great ways to over deliver and create customer delight and in essence under promise and over deliver. This could lead to direct referrals or free word of mouth, especially if the happy customer takes to social media with your above and beyond gesture. And, above and beyond gestures are a long-term business strategy that is proactive, rather than reactive.
A Poor Business Strategy: Unrealistically Over Committing
Setting goals to making promises that are unrealistic or unachievable will backfire. It can be damaging to the organization’s reputation as well as staff self-confidence. Eventually, customers will start to learn your organization doesn’t follow through on promises.
Bottom line, if you can’t do it consistently, you aren’t creating a good customer experience. Rather than over or under promising, find ways to build processes that lead to consistent products, services, delivery and communication – together these create a winning business strategy for long-term growth.
PBEX, LLC provides a complete review and analysis of the business processes that create efficiency and profitability, and the barriers to them. Whether you need help building consistency in delivery, or closing gaps, we can help. Providing lean consulting and training, we are ready to support your organizational goals. Contact us today to learn more about lean business management and to schedule your review with a lean sensei focused on business strategy.