“Under-promise and over-deliver” is a catchy and well accepted management maxim these days. It’s frequently found hand-in-hand with that other popular wisdom about the need to “constantly exceed customer expectations”. In fact many managers would argue that in order to constantly exceed customer expectations, you need to under-promise and over-deliver.

The marketing and management literature supports the notion that what is delivered to customers must relate to their expectations and this is in large part driven by what was promised in the first place. The real problem is how managers have blindly picked the idea up and assumed that it applies across the board.

Flawed assumption 1: That being positively surprised time and again is a sensible and sustainable thing to do

A common traditional wisdom is that one of the best things you can do is to “constantly exceed the expectations of your customers”. It’s like the customer management version of continuous improvement because it’s a stretchy and aspirational thing to do. But, given the earlier discussion about how customers dislike surprises, is this actually a sensible aspiration to pursue?

Look at the stock market example again- a blue chip stock is defined by the way it delivers the promised results time and again over the years as promised. As one web dictionary puts it- well-known common stocks with a long record of profit growth and dividend payment, and a reputation for quality management, products and services. What happens if a certain stock becomes renowned for beating expectations? Beating expectations quickly becomes the new expectation.

If for example, bank customers generally wait five minutes for teller service, their expectation will be to wait five minutes. To exceed their expectations, the bank will need to shorten the wait to less than five minutes. Perversely though, once customers experience a shorter wait, their expectations are generally revised. The inevitable happens- the bank creates a rod for its back and it feels under pressure to progressively reduce the waiting time, and following the logic, the waiting time will ultimately need to be zero.

One of the key points is that customer expectations are rarely static. The expectations customers hold will adapt and change according to what they hear in the market and what they experience.

Flawed assumption 2: That over delivering pays off

One of the biggest risks of over-delivering is wastage… the sort of wastage that cannot be seen.

It is a well known fact that some very high quality companies around the world have gone out of business. Even Baldridge award winners like Florida Power and Light have gone broke because their quality has been too good for what customers pay. There’s an assumption that great quality and service pays off, but ultimately it is about what the customer gets for what they are prepared to pay. Offer more than what a customer is prepared to pay and it will be the wastage that costs dearly.

Yet, if we explore the psychology and motivation of customers we get a picture why substantial wastage often goes unnoticed. What happens if a customer gets offered something positive they did not expect? First, they will of course usually accept it, especially if it comes with no strings attached. Unless the unexpected bonus is related to something really important and relevant to the customer, then it is likely, the customer will accept it without really thinking much about it.

Take the bank waiting time example again. If a customer comes in and this time goes straight to a teller without waiting, they will undoubtedly feel good about that for a short while. Importantly, the attitude of most customers is usually that this is a little win for them… some serendipity when “it’s usually me, the customer, who gets the raw end of the deal… so I deserve this bit of luck”. It’s likely they won’t attribute this to the good planning and management of the bank, unless it starts happening on a consistent basis. So isolated over-delivery will achieve little enduring behavioural modification for customers in the moderately dissatisfied to moderately satisfied ambivalence area of the satisfaction scale. Customers will take whatever is on offer though- they’d be crazy not too!

The main conclusion here is that over-delivery is a dangerous game. Most over-delivery will be happily accepted by customers, but don’t expect to get much back in return. To work, over-delivery must become part of a consistent, on-going offering that customers value and anticipate. And if that is achieved, that is no longer over- delivery, it’s simply doing what is promised and expected. So the emerging wisdom is don’t over-deliver, just “deliver on the nail”.

Flawed assumption 3: That under- promising works

This leads to another popular belief- that it is smart to manage the expectations of customers downwards, so that it is easier to delight them. Even better if you can delight customers by doing nothing different to what you are currently doing! This is so called “under- promising”- one half of the widely accepted “under- promise and over-deliver” approach.

On the surface of it, this seems a clever thing to do. Since the expectations of customers are quite fluid, it is obviously smart to keep them under control as much as is possible.

Let’s look at the bank waiting time example again. Imagine the bank has decided to manage expectations downward to ten minutes, but still deliver on a five minute wait. Note that in the past waiting times were one of those issues avoided if possible in any communications with customers. Obviously, it costs very little to explain to customers that they can realistically expect a waiting time of up to ten minutes. As the theory suggests, naturally, they will be pleasantly surprised if they only have to wait five minutes (the amount of time they have always had to wait)- or will they?

There are a few inherent dangers:

• There’s a negative message to be communicated in order to manage expectations- that that the waiting time could be ten minutes. Keeping in mind that studies show that it takes about 11 positives to make up for one negative, there’s a very real danger that there could be a negative backlash against the bank which could be difficult to overcome. This will be especially so if waiting time is an important criterion for customers to evaluate the performance of the bank
• What if another bank uses the opportunity to promote shorter waiting times? This might be an attractive proposition to the many ambivalent customers of the first bank, even though in reality waiting times in the two banks are the same. Under- promising on a systematic basis can open up an opportunity for competitors when really there is no difference between the two.

In this competitive world, it’s unusual to have the space to under- promise on an ongoing basis, especially to make enough of a difference for the under-promise; over-deliver strategy to stand out to customers.

Much more important to work on is communicating realistically what your firm is capable of, so that there is no misunderstanding with the customer. You could call this “promise on the nail”- the art and science of promising exactly what a customer is going to get.

Where does that leave “under-promise and over- deliver”?

It’s catchy, but it has no substance and it’s not sustainable- “under-promise and over-deliver” rarely works for all the reasons argued above.

Most success will come from promising what can and should be delivered and then doing it- “promise on the nail and deliver it on the nail”.