In this YouTube presentation, speaker Sandy Waggett (Speaker A) explains the business technique UPoD—under‑promise, over‑deliver—as a key driver of Zappos' growth to $1 billion in revenue. Using a vivid case study contrasting Zappos with its early online competitor Foot Locker, the speaker shows how Zappos deliberately set conservative delivery promises (e.g., five‑day shipping) and then exceeded them (overnight delivery), creating surprise delight and strong customer loyalty. The talk also addresses the "tinge"—the customer perception gap when competitors promise faster service—by offering a script for explaining longer timelines and expediting when possible. The core message is that improving perceived performance through promise management, rather than solely enhancing operational speed, can dramatically boost loyalty and scale, as evidenced by Zappos' success and Foot Locker's decline in online sales.
Chapters
Fourth strategy, I'm just tearing through some stuff here, is a technique called UPoD. It stands for under-promise, over-deliver. Maybe it's a term you're familiar with, but I wonder if you're using it because I know one company that used it to grow to a billion dollars in revenue. A billion dollars in revenue. Anyone ever buy anything from Zappos here? Just by a show of hands. Okay, good. So okay, a lot of Zappos consumers. I don't know if you know the backstory of Zappos. When Zappos started their internet presence selling shoes, they had a major competitor coming into the industry that you probably all know called Foot Locker. Foot Locker had a presence in every mall in the country, was backed by venture capital, and had millions backing it. Zappos was a little startup out of a garage and had the same idea. Foot Locker said there's a huge opportunity on the internet, we're moving in, Zappos said there's an opportunity on the internet, we're gonna give it a shot. Millions, actually hundreds of millions backing this one, nothing backing this one, but Zappos won. How? Because they use a technique called UPoD, under-promise over-deliver. Just because you're sitting right here, I'm gonna pick on you. When you bought your shoes, you bought shoes from Zappos? Okay, how long ago? So a couple weeks ago you bought shoes. This is not a magic trick. Have we ever met before? Is there anything up my sleeve? Okay. When you bought your shoes, have you had this experience when you bought your shoes, did they promise it would take about a week to get the shoes? But did you get it overnight? Oh my God, you got them overnight. Unbelievable. Now we've never met before, we never talked before, and I'm about to ruin your day. They do that with everyone. I know. I know, it's okay. You can go cry now. No. And they said you're a VIP and all this stuff. Zappos, and everyone in the audience that bought from Zappos, they've done it with you. It's a special technique. They made a promise, it'll take 5 days, and then they FedEx it overnight. And when it arrives overnight, it's like your birthday. This is amazing, the shoes are here. Now here's how Foot Locker moved into the market. Foot Locker said, we're gonna take shoe orders and we're gonna promise overnight delivery. And so Foot Locker, you'd order the shoes, the exact same shoes, Foot Locker would say you'll have them the next day and they'd arrive the next day. But that's what they promised. Eh, as my wife would say, eh. But sometimes UPS or FedEx would get stuck in a storm, they would miss a package and it would take 2 days. Foot Locker promises they'll get to you overnight, it in fact takes 2 days, you're sitting here waiting for your shoes like where are they? It takes 2 days. Well, guess what? Foot Locker sucks. They can't deliver on their promises. Zappos, on the other hand, said it'll take 5 days to get to you. It comes overnight and you're blown away. But sometimes they'd have the same problem. Sometimes it would take FedEx an extra day to get the package there. Instead of coming in 5 days, now it comes in 2, and it's still like your birthday. Under-promise, over-deliver. Overdeliver. The biggest way to improve a business is not by getting better on your deliverables, it's actually by improving your promises. Setting promises that are on the outer side of reason and then beating those promises. Most people overpromise. We want to promise the world to our customers. Of course we'll get your, your products ready, they'll be ready in 5 minutes, and then when they show up it's not ready. You set your client up for huge disappointment. Promise an outer side of reason. Now you are gonna experience the tinge, and what I call the tinge is when you tell a customer, you know, it'll take us 5 hours to prepare this or 10 hours to prepare this, and your competitors are saying we'll get done in 2 hours. Your customer will say, well, hold on, everyone else says 2 hours, you say 10, that's horrible. You have to have a reasonable explanation for it, saying, well, we want to make sure we do it properly, we want to have our metanologist review it, and That's a horrible name. We want someone to review your order, but if it's an inconvenience, please tell us and we'll expedite it immediately for you. That's how you address the tinge. Then here's the magic. You prepare the order just as you did, as quickly as possible, but now an hour later you call a customer and say, hey, we have wonderful news. We said we'd get it done in 10 hours. We're able to expedite. It's been reviewed. It's perfect. It's ready to go. We're ready early for you. And your customers will be blown away. Your competitors are over-promising and under-delivering and losing customer loyalty. Don't do your work better, simply adjust your promise and you'll be perceived to be radically better. Zappos grew to $1 billion and has loyal customers. Foot Locker collapsed and doesn't have an online business anymore. I mean, who bought from Foot Locker online recently? That's what I thought. Nobody. Under-promise, over-deliver.
