Wednesday, March 15, 2017

Under-Promise and Over-Deliver

A. Introduction
» Minimise customer defections and therefore increase retention rates which increases lifetime value of a client.
» Create a WOW experience for customers.
» Enhance your reputation in the marketplace which increases word of mouth and conversion rates.

B. Under-promise and over-deliver explained
Today, consumers have higher expectations of suppliers than ever before. Yet at the same time, many companies are failing to meet these ever increasing expectations. As a result, customer turnover rates are higher than ever.
Today, more than ever too, consumers don’t simply want to buy a product. They want a complete experience. They want to connect with others. They want to be engaged and entertained. The companies that deliver that “WOW” experience are hugely profitable. The ones that don’t, often flounder. (See “Create a Wow Experience” Study Guide).
A fantastic quote from Tom Peters says:
“We are in a sea of sameness, in a winner takes all world, normal equals nothing – be abnormal”
One of the key ways to “wow” your customers is to put in place strict measures to ensure you underpromise and over-deliver in every area of your business. In other words, be conservative in your commitments.
Tradies tend to be a great example of poor customer service (obviously, not all tradies are like this). Has this ever happened to you?
You call up a tradie and ask them to come over and quote on something. They mention a time they’ll be there. You arrange to leave work early so you can be there for when they arrive. What happens?

You find yourself waiting 15 minutes, 30 minutes, 45 minutes even an hour before that tradie arrives or maybe he doesn’t show up at all. If he did show up, chances are he didn’t even do the courtesy of telephoning you tell you he was going to be late.
So how does that make you feel?
You’re annoyed because you took time off work to be there so that tradie has wasted your time. You’re especially annoyed because you didn’t receive a phone call to apologise for the tardiness.
As a result of that frustration, chances are you don’t end up doing business with that tradie. You might even go as far as telling your friends just how incompetent that tradie is.
Here’s another example featuring a mechanical repair business.
You leave your car there to be serviced. The mechanic tells you that it will be ready for you to pick up by 5pm. They mention they have a courtesy bus and they can drop you to work. You receive a telephone call at 2.30pm to say that your car is finished and ready to be picked up.
You arrive to pick up your car and find that not only have they serviced it for you, they have also vacuumed it, washed it, and included an air freshener, as well as some complimentary sachets of car wax. You also receive a $10 voucher from the local car detailer.
How would you feel?
Chances are you’d be delighted. Chances are too, you’d tell a friend or two about the great experience you had.
On the flip side of the coin, maybe this has happened to you?
Have you ever had your car serviced by a mechanic who leaves grubby finger marks on the steering wheel and grubby boot marks on the mat, finishes the car a day late leaving you stranded without a vehicle, and does additional repairs that increase the repair cost without informing you?
And when you drive the car home, it sounds like it’s running on 3 cylinders?
If you’ve ever had an experience like this, chances are you’d be pretty cheesed off, wouldn’t you!
Chances are too, you’d probably tell a friend or six about your lousy experience. Bad news travels fast so it isn’t long before that mechanic has a bad reputation out there in the market.
Here’s another classic example of poor service.
Ever turn up to the doctor’s surgery on time or even a little early for your appointment. You sit in the waiting room and wait and wait and wait and wait. Almost an hour ticks by before the doctor is ready.
Instead of spacing patients at realistic timeframes, doctors try to see as many patients as they can in a day.
The result of that is the patients who need to wait, end up getting annoyed. And when the doctor starts running late he sometimes doesn’t spend enough quality time with the patient to find out their situation.
That can lead to misdiagnosis and prescription errors, not to mention the “bad reputation” the doctor’s surgery is earning.
See how destructive “over” promising and “under” delivering can be for your business?
And see how much of a positive impact there will be when you “under” promise and “over” deliver?

Handling mistakes
Even the most efficient organisations make mistakes. After all, stuff happens. These mistakes don’t need to spell the end of a relationship with a customer, though. If handled in the right way they can actually be an opportunity to create a raving fan.
The key is to overcompensate for the mistake. If for some reason your delivery is running late, throw in something else for the customer free.
For example, if a high value interstate order is urgent and you’ve missed the last interstate courier run, hop on a plane yourself and check the product in as baggage to make sure it gets there on time.
It’s often well worth gifting the customer a product/service anywhere up to the value of the product or service they purchased, just to make amends for that error. Doing that not only calms the customer down, it shows them that you’re willing to do whatever it takes (and then some) to fix the situation to their delight. It shows you’re sorry. It shows you care. And showing you care is important.
So – instead of leaving your premises complaining to anyone who will listen, about how sloppy your organization is for making a mistake, they’re more likely to be telling everyone they know about the amazing way you made amends.
More often than not, they’ll be more loyal than ever and start spending and referring more than ever, as well.
The following is an example of a situation where a mistake was handled efficiently:
A customer ordered 50 custom made shirts from a uniform supplier, specifically requesting blue shirts with white sleeves. The supplier ordered blue shirts with yellow sleeves from their external manufacturer, only realising their mistake once the shipment had arrived.
It would take another 3 days for the shirts to be re-ordered and made, and 2-3 days for the stock to be delivered via courier on top of this. The customer had requested the order to be ready by the end of the week – it would be too late to re-order the stock, have it made and also couriered back to the supplier on time.
They called the customer immediately to notify them of the error, explaining that they could still get the new order to them, but it would be up to a week late. For the inconvenience they would be given a discount, as well as some free matching caps (the uniform supplier already had these in stock). The customer was understandably disappointed, but grateful for the business’ apology and offer and agreed to wait for the new order.
As the manufacturer was located only 45 minutes drive away, the uniform supplier arranged for the new order to be completed as soon as possible and decided to drive over to the manufacturer and personally pick up and deliver the correct shirts to the customer themselves, which would save an extra couple of days that it would have taken to be couriered.
The customer was surprised and delighted to receive their shirts a couple of days early, and were so thrilled with the matching caps that they ordered an extra 25 of them!
The uniform company also made a follow up call a week later to see if they were satisfied with their purchase, at which point the customer expressed their appreciation with the company for “going the extra mile”. Unknown to the company, the customer had previously been ordering their shirts from a competing business but had a similar bad experience that had left them so disappointed with the perceived indifference that they refused to go back. They said that they were so impressed with the service this time that they would be coming back for all of their business in the future.

C. How to under-promise and over-deliver
Identify key frustrations that people have when dealing with people in your industry.
The first step is finding out what annoys your customers when they deal with people in your industry.
Once you find out what their frustrations are, you can put in place measures that eliminate those frustrations. You can then take that one step further and put in place initiatives that take that customer from being indifferent about your business to being a raving fan.
You can find out those frustrations in one of two ways:
1. Run a Client Advisory Board where you ask 12 customers to an event that you have facilitated by an external, impartial person. The customers are asked a series of questions relating to the frustrations they have dealing with businesses in your industry. (See “Client Advisory Board” Study Guide)
2. Send a feedback campaign; offer an incentive for returning the feedback. (See “Client Feedback Campaign” Study Guide).
Here’s an example based on the tradesman case study …
Let’s say that you work out that the key frustrations that people have when dealing with tradies are:
» They always show up late or not at all and they don’t even call beforehand to let people know they’re going to be late
» Shoddy workmanship
» Leave a big mess after they’ve finished
» Cost blow-outs
» Deadline blow-outs
Once you know what cheeses people off, work out ways to change your operating procedures to ensure you not only NOT do anything that cheeses your customer off, you also go way beyond the call of duty to delight them.

It’s about ensuring ABSOLUTELY, that these delight measures happen each and every time anybody in your business interacts with a customer.
To do that, create a Standard Operating Procedure that ensures that you under-promise and over-deliver.
What measures can you put in place to:
» Exceed the customer’s quality expectations?
» Exceed the customer’s timeliness expectations?
» Exceed the customer’s affordability expectations?
» Exceed the customer’s other expectations?
It might include initiatives like always doubling the “Murphy’s Law” buffer to ensure that even if a disaster does happen, you’ll, at the very least, deliver on time.
For instance, to ensure they always exceed customer expectations, a printing firm might inform their customer that their stationery will be delivered in the afternoon on Thursday, but you arrange for your people to print it by Wednesday evening and arrange for the courier to deliver it first thing on Thursday. The customer is pleasantly surprised. Even if something happens and the courier is late, you have built in a buffer to ensure, at the very least, you have met their expectations.
To combat the “leaving a mess” frustration, tradies could put down paper floor mats, or wear shoe covers in the areas they work then when they have finished, vacuum and/or sweep the area so it looks like they haven’t even been there.
Taking that a step further, the tradie might subtly inform the customer of what they have done by casually saying something along the lines of …
“Mr/Ms Brown, I’ve tidied up my mess here. Where is your wheelie bin? And do you have any other rubbish that I can take for you on my way out? Oh yes … and while I remember, I noticed a floorboard was loose/tap leaky/ so I thought I’d fix that for you to help you avoid any nasty mishaps in the future. There’s no charge for that.
Plus, I thought I’d leave you with two spare boards/washers etc. just in case down the track another railing wears out and you need to replace it. That saves you hunting around to try and find a matching one.”
Some examples of paper car mats and shoe covers:

Next time you stay at a hotel you might find chocolates on your pillow or complimentary fruit basket as a welcome surprise.
Or – if you’re a butcher you could throw in 3 or 4 free cheerios for a customer that clearly has children. The hard cost is fairly low and it shows the customer that you’re a nice person. It also introduces them to your cheerios which, if your children like them, you might end up buying in the future.
For more ideas on how to surprise customers see “The Importance of Surprise” Study Guide.
So – what can you do to go that extra mile?
D. Key points summarised
» Under-promising and over-delivering creates strong customer loyalty, referrals and repeat sales. Over promising and under-delivering tarnishes your reputation, loses you customers and loses you potential customers.
» People get frustrated with being let down due to time, quality, commitment and cost issues. Create standard operating procedures to alleviate these frustrations and go above and beyond the call of duty.
» A disgruntled customer handled in the right way can turn out to be your biggest advocate overnight.
» If you make a mistake, quickly admit the error and overcompensate them for the inconvenience.

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