Practical Ecommerce

You lose money under-promising and over-delivering

There seems to be a well-meaning but misguided belief that as online retailers we should under-promise and over-deliver to make our customers more loyal.

But I don’t believe this to be true, for the following three reasons.

1. Customers don’t appreciate it and you lose money. Once customers have completed the checkout, it makes no sense to offer more than what they have ordered. You should promise to deliver what they ordered, and no more. Otherwise you risk losing money for no additional customer satisfaction.

Here’s an example from my own website. On Oct. 20, a customer ordered a custom, unframed guest-seating chart mounted on foam board for her wedding on Nov. 7. The product specified 11 days for turnaround and delivery.

The customer was to send me, for my designer, a spreadsheet of her guests’ names and the table layout. The customer also wanted a variation on the layout to accommodate guests listed on two long communal tables.

She did not provide guest names until Oct. 24. The designer created the first draft overnight, the customer added further guest names with further redesigns and alternations. The final design was not approved until Oct. 31. I had to get the chart printed quickly to meet her wedding deadline, paying an expedited fee that I did not charge to the customer, as I wanted to please her.

At great urgency I got the framer to mount the seating chart on Nov. 4. He showed me an upgrade option to have it supplied with gold wooden framing, which I agreed did look better and updated the price and product description. I did not charge this framing cost to my customer as she did not order it. Her father-in-law collected the seating chart that evening in time for her Nov. 7 wedding, despite the final draft being approved only 7 (not 11) days prior.

My customer has not responded to my requests for feedback so I don’t even know if she appreciated or even noticed her framed seating chart’s improved appearance. And she presumably does not care that I lost money on her order. My unasked-for generosity has not made me more money.

2. You look uninformed and inconsistent, and lose money. If you concentrate too much on the “under-promising” to cover yourself such as with ludicrously long delivery dates, by the time you have “over-delivered” by delivering early, your customers feel aggrieved for the extra stress your inaccurate, uninformed promises have created and wonder how reliable you are. Do you know your business or not?

For example, I ordered a Morphy Richards glass electric kettle for my mother for Christmas. This kettle is not readily available in Australia and I had to order online.

The online retailer lists its availability as being in stock, usually sent within 24 hours. I ordered this on Dec. 7 for pre-Christmas delivery. I specified delivery directly to my mother in Brisbane, Australia to speed up and save on shipping.

After I paid for it, I received an email to allow up to 12 business days for delivery, which I calculated meant it should arrive on Dec. 23.

On Dec. 11, I received an email to advise me the kettle would be dispatched — not delivered — within 10 business days. On querying this, I received a response that my order would be delivered between Dec. 30, 2015 and Jan. 12, 2016. I was sent a $20 gift voucher as compensation because it would not arrive in time for Christmas.

The next email informed me it was shipped on Dec. 17 and then my mother rang me on Dec. 21 to say it had arrived.

Their endless under-promising just made me feel stressed; the “over-delivering” of the kettle actually arriving in time for Christmas was a curiously anti-climactic experience. I am unlikely to order from that retailer again because I cannot trust it to have accurate delivery dates.

3. If customers talk about your company and you can’t deliver, you’ll lose money. You may use gap analysis surveys — comparing actual performance to desired performance — to show the difference between how important certain attributes are to your respondents and how satisfied they are with those attributes.

While you should certainly address areas of high importance with low satisfaction (which indicates potential customer unhappiness), if customers report high satisfaction with low importance, this may show where your company under-promises and over-delivers and where you can pull back — saving time, money and effort.

So if you provide fast shipping, yet fast shipping is not important to them, you are over-delivering and losing money. The same applies to free shipping.

You are probably over-delivering and losing money if you offer free gift wrapping when (a) the order is not marked as a gift, (b) the order is from a first-time customer, or (c) the order is from a male customer who would pay to have the item wrapped.

If you provide 24-hour live chat service on your website, but more than 80 percent of your sales are made during regular business hours, you are over-delivering and losing money.

And so on.

People will take for granted what you provide. Do you really want one customer to boast what you did for him if you have no real chance of delivering it to all your customers without losing money?


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Comments ( 2 )

  1. Ashish Kothari January 8, 2016 Reply

    I was doing the same mistake by under-promising on the delivery dates while actually trying to deliver items much earlier with fast shipping (eating the additional cost) hoping to make customer happy with the aim of creating loyalty. But I think you are right. I should promise correct delivery dates instead. Thanks for the suggestion!

    • Elizabeth Hollingsworth January 8, 2016 Reply

      Thanks Ashish, I once upset a customer by delivering several days earlier than they expected which led to the birthday girl opening her package when the courier arrived. Unfortunately they hadn’t specified it was a gift, but still.