There were two different business owners, with two different philosophies on promising deadlines.
The first one, the Promiser, tried to accommodate everyone’s needs. If someone needed a job done the next day, he rarely said no. If someone requested a job be done in three days, he said okay. If they needed it in two weeks, he told them, “No problem.” If instead, a customer simply asked when a job would be done, he gave them a completion date based on how quickly he thought he could get it finished. Some customers didn’t ask for completion dates. They just approved the job and said, “call me when it’s done.”
But problems arose for the Promiser when things didn’t always go as planned; if due to unforeseen factors, a job took longer than anticipated. Sometimes a supplier was late with a delivery, or a mistake was made in production requiring a re-do of part of the job. Or an employee became sick. So a deadline that at first seemed within reach was missed. In an attempt to placate an irritated customer, an unplanned free delivery was made, adding yet more time to the job. But the problems did not end there. The late job bumped other jobs that were in line waiting to be done, annoying more customers. If one of them was angry enough, that job was moved to the front of the queue and marked “hot.” And what about the customers that just said to call them when the job was ready? Their jobs were repeatedly delayed. Deadlines were missed frequently, and because jobs were often rushed in an effort to catch up, more mistakes were made. Jobs came back almost weekly for correcting or remaking. Occasionally, jobs were even sent out with known mistakes just to avoid missing the promised deadline. (The business owner reasoned that he was gaining breathing room to get other things done before the customer noticed the mistake and returned). In his mind, the owner felt he was doing his best, even bending over backward for his customers. Still, he developed a reputation for not respecting deadlines. A reputation that he could never quite overcome.
How was this person able to survive in business? He had two things going for him. First, he was one of the cheapest in town. He regularly asked customers how much his competitors were quoting and he tried to undercut them much of the time. He developed a reputation for low prices that kept customers coming back who otherwise would have gone elsewhere out of frustration. Some customers, wise to his overpromising, called frequently after ordering to check on the progress of their jobs. They learned from their past experience with him that he serviced the ‘squeakiest wheels’ ahead of others. So, they squeaked.
The second factor in his favor was the tremendous size of the market in his area, providing a constant influx of new customers attracted by his prices. He lost many customers due to missed deadlines, but they were constantly replaced by new ones.
The overpromising by this business owner created additional problems beyond missed deadlines. Employee moral ran low. When some workers discovered that the owner often blamed his missed deadlines on his workforce, they became frustrated and resentful. Employee turnover was significant. In an effort to reduce mistakes and expedite jobs, the owner habitually micromanaged workers, constantly looking over their shoulders, making decisions for them on even minor matters of production. He constantly asked for progress reports, looking for ways to hurry jobs along. In an effort to save time, and because he “didn’t want to spend all day writing,” the owner frequently produced job orders lacking crucial information, preferring instead to give extended verbal instructions that were not always perfectly remembered. This resulted in more mistakes and more missed deadlines. The owner was not a bad person but, under the pressure, he often became rude and critical and was rarely patient with employees. Moral sank even lower.
The Hardnose was not a bad person, either. Actually, she was a smart businessperson. She tried to accommodate clients’ deadlines just as the Promiser, but with one major difference in procedure. She always—always—generously padded her time estimates. If she thought the job required five days, she never told the customer five days. She told them seven or eight, or more, and she didn’t budge. If she knew she could do a job in two weeks without a problem, she told the customer three weeks, even if they said they needed it completed as soon as possible. She was hard-nosed about giving herself wiggle room. She assumed, correctly, that something would go wrong on a job as often as not. If on the other hand, the job was completed ahead of schedule, as it often was, she sometimes, but not always, called a client to report that the job was finished early. She developed a reputation for never being late. The result was that she was in demand and she was able to charge a higher rate than the Promiser. Yet she worked no harder than he did.
It seems that the Promiser was in constant fear that a competitor would give his customers a better turnaround time. So he rarely said no to a request. His efforts were all focused on landing the job, after which he concentrated on getting it done in time. The Hardnose was motivated by fear, too, but not fear of losing a job. She feared for her reputation, and she was willing to turn down work to protect it. In the end, customers trusted her. Her word was golden. The cushion of time that she gave herself when scheduling produced an additional cushion, one of goodwill with her customers. In a recent blog, marketing expert and author Seth Godin made the observation that this cushion of goodwill is like a form of “overdraft protection” for your business. The cushion can save your reputation when you occasionally fall short on a promise, which inevitably happens.
The Hardnose invested in overdraft protection, both in scheduling and in customer trust. The Promiser did not. He took too many chances. And his “insufficient trust fees” hurt him.