Mike Michalowicz explains how under-promising and over-delivering shapes customer expectations and builds loyalty. Zappos promised 3-5 business days for shipping while competitors promised overnight, then consistently delivered faster, turning customers into advocates. His computer-forensics business set a modest 24-hour response window while competitors promised impossible sub-hour times, earning a reputation as the fastest responder.
Chapters
Mike Michalowicz is the entrepreneur behind three multimillion dollar companies and as we know, the author of the Toilet Paper Entrepreneur. He's globally recognized as a keynote speaker on entrepreneurship. He's the president of a behavioral web optimization firm called Obsidian Launch. Small business communist.
So it's a little bit awkward to be called a communist. Anyone's starting to speak in front of. With different expectations, our experience changes dramatically. And here's the rule, and you already know this. Under promise and over deliver. Have you ever experienced this one? You call a friend of yours and you say, hey, I want to meet with you today at 2:00'. Clock. Okay, of course I'll be there. What happens at 2 o'? Clock? Running late. Yeah, surprise. You're running late. Now what happens at 2:15? Nothing. Your phone doesn't even ring this time. And you're sitting there and you're like, oh my God. And at 2:25 they come rushing in. Oh my God, you're pissed. You're pissed because they promised to be there at 2 and they got there at 2:25 and you're upset because they messed with you. Now consider that same scenario if we kind of change it around. They call you now at 10 in the morning and say, there's no way in hell I'm going to get there at 2 o'. Clock. Why don't we meet at 2:30? Is that cool with you? And you'll experience what I call the tinge in that moment. You'll say, oh, they're changing on me. But generally a tinge is a very short moment. Because you're like, well, they gave me advance notice. I can change my schedule. 2:30 works. Cool, I'll see you at 2:30. They, knowing that they're habitually late, go through their whole thing. They try to get there too. Influenza, lava. They get there. They get there at 2:25. You come walk in at 2:30, they're sitting there and they hand you a hot Frappuccino. And you're like, they're awesome. They are awesome. And the only thing that's. Listen, both people got there at the exact same time, 2:25. But the only thing that's changed was the expectations set for you. Set an expectation with your customers and deliver beyond that and they will be madly in love with you. Ever buy from Zappos? You do? Okay. When you bought from Zappos, would you buy a pair of shoes? That's all they sold. Oh, an Ugg purchase. Nice. So when you bought your first pair of Uggs, From Zappos. Do you remember how long they said it would take to get to you when you ordered the shoes? Three to four days. And then how long did it really take? They said it would take three to four days. And Zappos got there the next day. Surprise. Zappos is a billion dollar company with one simple strategy. Under promise over deliver and repeat. See, what Zappos would do is they were competing at the time against Foot Locker. Foot Locker was trying to break into the online scene. They were a big mall kind of thing, right? And what Footlocker was doing was saying, okay, when a customer orders the new Ugg shoes, we, we are going to get it there within one day. So you order it and it will say overnight delivery. You're going to have your shoes there. Zappos in turn though, when you order from Zappos, they said it would take three to five business days to get there. Now both of them were shipping overnight. The problem is sometimes there is an earthquake or in Japan that actually slowed down the postal system, or there's a strike in somewhere or there's snow and the UPS guy can't make it to someone's door the next morning. Sometimes packages don't get delivered. That's only like 3% of the time. But 3% of the time, Foot Locker was really disappointing its customers. Zappos, on the other hand, said it would take three to five business days. They would every time FedEx it overnight. Shoes would show up, you would come in, you'd be, my shoes are here early. This is awesome. This is like a gift from God. Amazing. 3% of the time, Zappos would take two days to get there because they'd have the same UPS guy getting on the same truck that broke down or stuck in the snow. And it still wowed us because now the shoes were here at our place in two days. They promised three to five is here the second day. And Zappos is awesome. That's all they did. So in your business, how can you under promise and over deliver? Another example, my computer crime company, My computer crime, when I was stealing. Awkward. He's a communist and the criminal. So my computer forensics company, that was a front for my computer crime company, the industry is pretty crazy. So when there is a crime that's breaking down or Christie Brinkley's going through a divorce or something, it's not like, hey, we'll get to you in three weeks from now. It's always a panic situation. We gotta rush out. We have to capture evidence. They call it Bag and tag, take evidence and start analyzing computers. Well, our competition would promise usually one hour response times. You call them within an hour, they're in mode, in transport to get to you. That was like theoretically impossible. So I don't know how they were promising it. And there was a lot of pressure in the industry to be 45 minute response times or half hour to be better. But instead my company, we said we're going to be 24 hour response. And yes, customers will get the tinge when they hear that. You know, someone will call and say we have a panic situation, we need you out here. And we'll say, well it'll take us within 24 hours, we'll have someone on location and they're like ooh, but I have an emergency. So we were ready for the tinge. We'd say, well here's what you can do to hold over, secure the room, do this and this and this and it's all legal, it's all legit, this is how you proceed and we'll be there. Then I would hang up the phone, I'd count to 10 because it was just me when I was starting up, I'd dial back and say, great news, I just spoke with the entire service department myself and we're dispatching within five minutes. And they'd be like, oh my God, you guys are incredible. I can't believe you did this for me. I'm like, no problem, no problem. I get into my vet and drive out. It was a Chevette too. And that wowed people. My company got the reputation and why we got the Enron trial is we were the fastest response company in existence. The great irony is we weren't. Sometimes it did take us two or four hours because we didn't have another project or we couldn't coordinate our people fast enough. But we always beat the expectation we set. So we were just deemed as the fastest response company out there and we got lots of business because of it. So in your business, where can you do under promise over deliver? Where can you manage your clients expectations maybe to the point of a little tinge and then just blow away their minds. They will start talking about you just like they did with my company, just like they did with Zappos and be like, this company is the best in the world and customers will flock to you. Thank you very, very much.
