Strategy · Organising to Growing
A brand promise with a guarantee
You write down one promise your customer can check, put its KPI on your scoreboard and work out what the guarantee costs.
Does this sound familiar?
- A customer asks what they can expect from you, and your salesperson says: 'we do our best'.
- Your salesperson promises delivery in two weeks, and the planner is working to four.
- You ask five of your people what you promise the customer, and you get five answers.
- You only find out something's gone wrong when a customer rings up angry.
Who it's for, and when
For founders who notice that customers can't tell them apart from the competition, or that everyone in the company promises something different. In Proving you test what customers care about most. You pin it down from Organising onwards, once you're no longer at the table with every customer yourself.
The model
“When it absolutely, positively has to be there overnight.”
A brand promise is what you always promise every customer, whoever they are and whatever they buy. A good promise is about what your customer cares about most, and they can see for themselves whether you keep it. FedEx promised a parcel would arrive the next morning, and the whole company was built around it. The lesson Your core customer covers who that customer is. The lessons Core values that guide behaviour and The DNA: the soul of your company are about the bar inside the company; the promise is the part the customer notices.
Harnish gives every promise a KPI: what percentage of the time did you keep it? It belongs on your scoreboard, every week, with an owner. The percentage drops before the complaints go up, so you see it before the customer picks up the phone.
And he attaches a guarantee: what does the customer get if you break the promise? The guarantee should hurt you, because then you fix the cause. So work out what it costs. If it costs more than you can carry, you're promising more than your work can deliver. If it costs next to nothing, nobody feels it.
Verne Harnish, Scaling Up (2014), the 7 Strata of Strategy: brand promises with a brand promise KPI for each promise, and the brand promise guarantee (which he also calls the catastrophic guarantee). The choice between lowest price, best product and best relationship comes from The Discipline of Market Leaders (1995) by Michael Treacy and Fred Wiersema.
The promise
One sentence about what the customer always gets from you, concrete enough for them to check. 'A fixed price within 24 hours' is something they can check. 'Personal service' isn't.
The KPI on the scoreboard
The percentage of times you kept the promise, tracked every week by one owner. How to keep a scoreboard like that alive is in the lesson A scoreboard the team keeps up itself.
A scoreboard the team keeps up itselfThe guarantee
What the customer gets if you break the promise: money back, carrying on for free until it's right, a discount on the next order. Something that costs you money or effort and actually gives the customer something.
What the guarantee costs
Number of times a year, times the share that goes wrong, times what the guarantee costs each time. Work it out for now and for the percentage you want to reach. The difference is what better work earns you.
Pitfalls
Promising more than your work can deliver
Promising delivery in 48 hours while your planning runs to a week turns every customer into a complainer. Sort out the work first, or promise less.
Wanting to be the best at everything
The fastest, the cheapest and the best. Treacy and Wiersema showed that market leaders choose: the lowest price, the best product or the best relationship with the customer. In the other two they're good enough. Your promise belongs with the thing you lead in.
Watch and read
Five minutes from the Scaling Up world: what a brand promise is, and how to make one that sets you apart from the competition.
Watch on YouTubeA Scaling Up coach in three minutes on the KPIs behind the promise: measure them every week, and put them up where everyone can see them.
Watch on YouTubeHalf a minute of advertising for the best-known delivery promise of its day. Domino's dropped it in 1993 after lawsuits over accidents involving drivers in a hurry. It shows what a promise does to the work behind it.
Watch on YouTubeFive minutes, in Dutch, from the founder of Coolblue, a large Dutch online retailer known for its service, on what Coolblue promises the customer and what the company does to deliver on it.
Watch on YouTubeRead
Scaling Up
Verne Harnish · 2014 · ISBN 9780986019593
Where this lesson's model comes from: the 7 Strata of Strategy, with brand promises, a KPI for each promise and the brand promise guarantee. Published in Dutch as Scaling up: de groeiformule (Business Contact, 2016, ISBN 9789047008682).
View the bookApply it
- 1
What does your customer care about most?
Speed, certainty about the price, getting it right first time, someone picking up the phone? Ask three good customers. Don't guess.
- 2
What do you promise every customer?
One sentence, concrete enough for the customer to see for themselves whether you keep it.
- 3
How often do you manage it now?
Count it over the last three months. If you manage it less than nine times out of ten, pick a promise you can keep, or sort out the work first.
- 4
What does the customer get when it goes wrong, and what does that cost?
Choose the guarantee and work out what it costs a year, now and at the percentage you want to reach. This is the second field on the canvas.
- 5
Who keeps track of the KPI?
Put the percentage on your scoreboard, with an owner who fills it in every week. It isn't on the canvas, but without the KPI you only notice when the customer rings.
Examples
The sum for an installation company
Promise: we turn up on the agreed day, within a two-hour slot. Guarantee: if we're late, you don't pay the €65 call-out charge. 2,400 appointments a year. On time now: 92%, so 192 times late. Cost: 192 × €65 = €12,480. Target: 97% on time, so 72 times late. Cost: 72 × €65 = €4,680. Better planning earns €7,800 a year. The KPI 'appointments on time' is on the scoreboard, owned by the planner.
A software agency
Promise: after the first week you know what the project costs, and that price is fixed. Guarantee: if it costs more because we got the estimate wrong, we pay the difference. KPI: the share of projects that stayed within the fixed price.
A wholesaler
Promise: order before four, delivered tomorrow. Guarantee: if we miss it, shipping is free. The warehouse tracks every day how many orders went out on time.
Do this in your own business
Everything up to here is free. What you fill in for your own business, you keep in Boldcaster.
- You write the Brand promise section of your strategy, and it stays on your strategy page.
- You assign the lesson to your team and see who has done it.
- The quiz counts towards your progress, and you see which lesson comes next.
Four weeks free. You'll land straight in this lesson.
Quiz
6 situations. You need 5 of 6 right. You can try again at any time.
1.Your promise is 'reliable'. After a complaint, a customer asks what that actually meant. Nobody in the company can tell them. What do you do?
2.Your guarantee is: 'If we're late, we'll ring you to explain.' Why doesn't that work, according to this lesson?
3.You deliver 1,000 times a year and hit 'delivered tomorrow' 90 per cent of the time. The guarantee is free shipping, €40 a time on average. What does the guarantee cost a year now?
4.You want to promise 'delivery within 48 hours'. Right now you manage that on about half of your orders. What do you do?
5.Your promise is 'delivered tomorrow'. The number of complaints is steady, but the share that arrives on time drops from 96 to 88 per cent over three months. What do you do?
6.Your leadership team wants to promise that you're the fastest, the cheapest and the best. What do you do?
Nothing is saved here. In the app, the quiz counts towards your progress.
Read next
- Your exit goal · You pick an amount and a year for what your company is worth, work out whether it's achievable, and know what you want when the moment comes.
Not sure where to start? Take the growth scan