The Key To Loyal Customers -- The UPOD Factor

Exceeding expectations is the key. The secret? Don't improve your performance -- lower the expectations!

Wall Street Journal
By Mike Michalowicz

Do you want satisfied customers or do you want customers who are so thrilled with your company they become loyal, raving fans? I'll take option No.2. Satisfied customers may come back a second or third time; they may even become regulars. But unless you exceed expectations, your satisfied customers could just as easily become your competitors' satisfied customers.

If you want customers who are so loyal that they would never think of going to anyone else, and if you want customers who are so thrilled with your business that they tell everyone how amazing you are, then you're going to have to move the goal line beyond mere "satisfaction." You're going to have to wow everyone who walks through your door.

Now, I'm sure you could come up with loads of ideas that would dazzle your customers, but there's actually a simple shortcut to knocking their socks off every single time – and it won't cost you a dime. It's the "under-promise, over-deliver" (UPOD) method.

It is also known as the "Costco Customer Service Conundrum" -- the theory as to why Costco, who's business model provides virtually no service at all, is consistently given the highest marks of any retailer in the US in providing outstanding customer service.

When we talk about "customer satisfaction," we strive to deliver on our promises. Complete the market study by Friday, as promised. Deliver the new couch in July, as promised. Provide two valet attendants, as promised. When you do exactly as you said you would, you end up with satisfied customers. But when you give them something more than they expect -- faster service, extra help, more options, early delivery and so on -- you end up with the loyal, raving fans you need to propel your business into the stratosphere.

The idea behind UPOD is that people are most favorably influenced by great service they don't expect, rather than great service they do expect. And they expect it because you promise it. If you tell customers they will get their new shoes the next day, and the shoes arrive the next day, those customers will be satisfied, maybe even happy. But if you tell customers they will get their new shoes in five days, and the footwear arrives the next day, your customers will be amazed and thrilled.

Here's the trick with UPOD: It's not about doing things faster or throwing in "extras." It's about building the "under-promise" part into the equation from the start. If Friday is the earliest you can complete a study, then promise to have it done the following Wednesday. "Surprise! We finished early." If you know you will deliver a couch in July, promise to have it there by August. "Great news! We wanted you to have it as soon as possible!" Build a business model in which you have enough income to cover three valet attendants, promise two, and the day of the party, send over three. "We just thought you could use the extra help. No extra charge."

Most businesses know UPOD is a good practice, but few adhere to it because people think they have to change their operation to wow customers. Just take this very simple shortcut: Change your promise.

Using UPOD will also help you avoid mistakes that inevitably occur when people rush to meet deadlines. It will enable you to respond positively to last-minute requests and help you stay calm, cool and collected as you work surprisingly reasonable hours. Most importantly, when you under-promise and over-deliver, you will inspire satisfied customers to become devoted customers – and that's money in the bank.