Exceeding Expectations

by David Heitman

If there is any no-lose business strategy that exists out there, it’s this one:

Exceed expectations.

I have no idea why business schools don’t offer classes in exceeding expectations, but they should. This profoundly simple truth is somehow missed by 90% of businesses and 99% of all politicians.

In the course of purchasing products or services, people generally expect to get something close to what they paid for. They may even expect to get less than they bargained for, having grown cynical over the years by over-inflated claims and broken promises. But to exceed expectations? To provide more value than what was bargained for? This is the process by which first-time customers become lifetime brand ambassadors.

The old adage “under-commit and over-deliver” still has a lot of life in it, yet remarkably few organizations even try to do it, let alone succeed in the effort. Economic troubles have led many companies to cut back on employment, and the net result is a reduction in customer service and added value. Some companies can get away with this. But if you aspire to be anything more than the low-margin bargain basement of your industry, you probably want to avoid the death spiral of service quality reduction and customer churn.

From this perspective, organizational success has far less to do with clever marketing than delivering on a promise. Or more precisely, over-delivering. All the marketing in the world won’t make up for a poorly prepared meal, a defective product or unresponsive customer service. Most retailers would be better served by slashing their marketing budgets and investing in better-trained, more empowered associates. (Please don’t tell my fellow marketing professionals I ever said this.)

Poor service delivery will make people actually resent your marketing. For example, my bank has been running a series of commercials describing how they are adding new branches and improving customer service. But I know better. They have actually been reducing services, increasing fees, keeping shorter hours and laying off most of the nice people at the branch where I bank. Whatever loyalty I might have had to _______  ________ Bank is now down the drain. I’m a passive customer that would never recommend them to a friend. Only the hassle of filling out the paperwork required to move to a new bank keeps me there. If somebody offers me a free toaster, I’m outta there.

The ability to exceed expectations even sets things up for the little guys to compete with corporate behemoths and win. Here in Boulder for example, there is a hardware store named McGuckin Hardware. It’s not part of a national chain and has only one location, with a Home Depot less than a mile away. And McGuckin’s prices are clearly not the lowest in town. So why is this 50+ year-old company still thriving? Why do they have 800 times as many likes on Facebook as the local Home Depot?

To answer that question, all you have to do is walk into the store, where you’ll find more well-informed sales assistants in one aisle than you’ll find in an entire big box store. Then, ask the toughest question about the most obscure piece of hardware or replacement part, and you’ll be escorted to the appropriate aisle and given some sage advice about your project. After a couple of experiences like that, tens of thousands of loyal customers have found themselves trusting McGuckin’s for anything hardware/garden/project/home improvement-related.

The lesson: When people’s expectations are exceeded, price becomes less of an issue, and customer churn is no longer a problem. Exceeding expectations, adding value that was not even in the contract, delighting customers in unexpected ways—these are the keys to lifetime customer loyalty, increased share of customer wallet, and the all-important organic growth fueled by referrals and recommendations. In the long run, it costs less to exceed expectations than to fail to meet them.