Given a choice, which of these three go-to-market strategies would you opt for? Over-promise and under-deliver, under-promise and over-deliver, or a halfway house of neither over- nor under-promising – a strategy of meeting the expectations you create?
Over the past decade, marketing theory (if not practice) has swung sharply in favour of under-promising and over-delivering. If you over-deliver, the theory goes, you will “delight” your customers, who will then become keen advocates of your brand, telling everyone how wonderful you are. The resulting word-of-mouth advocacy is more powerful than advertising alone because people trust each other more than they do self-interested claims. Therefore, the dynamic of under-promising and over-delivering – of “delight” and advocacy – is the best strategy for positive growth.
Fred Reichheld’s Net Promoter Score is just one of the methodologies riding this bandwagon, and it does have some positive evidence. Every year, for example, the Promise Corporation surveys consumers’ perceptions of 166 UK brands. It creates a score for their image of the brand and their experience of using the brand to discover “the Promise Gap” – the difference between the two. A positive Gap means customers were pleasantly surprised; a negative Gap means the image was better than the reality. From 2006 to 2007, brands with positive Promise Gaps showed an average 10.5% growth in revenue. For those with negative gaps, the figure was 2.5%.
But is under-promising and over-delivering really that strong a strategy?
One reason for caution is the dynamics it creates. It may be easy to under-promise and over-deliver on one occasion, but as soon as you delight your customer you generate a new, higher level of expectation. The only way to keep on delighting customers is to keep on delivering further leaps in experience. This results in “expectation inflation”, which is a recipe for disappointment: delivering exponential improvements in brand experience is well-nigh operationally impossible. (A spokesman for Promise stresses that what it focuses on is “breakthrough” experiences such as flatbeds in long-haul flights – new brand experiences that alter the competitive landscape for good.)
A second reason for caution lies in the realities of word-of-mouth recommendation. Narcissistic marketers dream of delighted brand advocates rushing around lavishing praise on their brand willy-nilly. But there is very little evidence of this. Most brand recommendations are made in response to questions from people seeking advice: no question, no advocacy. Very few recommendations are spontaneously offered. Also, a willingness to tick a box in a survey saying “I am willing to recommend” is not the same as actually making a recommendation. Actual recommendations fall far short of the “willingness to recommend” figures reported by market research.
Now some new research funded by Honda casts an intriguing new light on this debate. John Bunyard, a founder of the Newcomen Group, set up an experiment where consumers could choose to do business with three types of traders on an iterative basis: traders that over-promised and under-delivered, that under-promised and over-delivered, and that simply matched expectations.
When asked which type of trader they preferred, the delight-generating under-promisers came out top, followed by the matchers, with the over-promisers coming last. Initial points therefore go to the “delight” strategy.
However, over 10 rounds of repeated trading, consumers did not act on these stated preferences. When it came to deciding who to do business with, they chose the “match expectations” traders, who earned 71% more than under-promisers and 15% more than over-promisers.
Also, as these figures demonstrate, the “over-promise” strategy beat the “under-promise” strategy hands down (even though, over the course of the ten rounds, the popularity of the over-promisers fell while the popularity of the under-promise traders rose). In the heat of the moment, it seems that when people are asked to choose between too-good-to-be true offers and offers that hide their light under a bushel, they plump for the offer that looks best.
Bunyard’s theory as to why the expectation matchers triumphed has far-reaching implications for marketers. Human brains have evolved as “predicting machines”, he suggests. To survive, we have to predict the likely outcomes of alternative courses of action. When our expectations are confirmed, our brains deliver a spurt of the pleasure-inducing hormone dopamine. Being proved right makes us feel good. On the other hand, we don’t like being proved wrong because surprises imply risk.
People (and brands) that do what they say they will do come across as trustworthy, while those that don’t will come across us untrustworthy, even when the surprises happen to be pleasant. “The repetitive effect of under-promising is to induce a sense of being deceived,” argues Bunyard. “In the context of evolutionary psychology, it is entirely consistent that creatures living in a world of uncertainty should default to entrusting their welfare to the honest broker whose promise matches up to reality.”
Under-promising and over-delivering therefore falls at two hurdles. At the first hurdle of first contact, most people opt for the apparently better offer (the over-promise). At the second hurdle of repeated experience, over-delivery undermines trust more than it builds delight.
If Bunyard is right, this research has two implications. The first is long-term and theoretical. If both under-promising and over-promising undermine trust then many marketing communications strategies may need to be reconsidered. Sellers naturally view their marketing communications as an inducement to “buy me!”, but perhaps its real value lies in its ability to ease and simplify buyers’ decision-making by reducing buyer risk. This isn’t just about rational considerations such as the costs of misspending 5p or £50. It’s deeply emotional: a by-product of the hormones washing around in our brains.
The second implication is immediate and practical. If matching promises to expectations is the best strategy for going to market, then the real secret of marketing success lies in being able to make better promises via superior innovation and superior operations.
No nasty surprises there, then.