More Than I Wanted: The Danger of Over-delivering to Customers
CHICAGO, Jan. 30, 2013 /PRNewswire-USNewswire/ -- While much attention has been given to why products fall short in the marketplace, recent research shows that over-delivery--providing customers with products with more features and add-ons than they actually need--is equally problematic. These are products that are over-engineered, hard to utilize, and difficult for customers to understand.
Analysis by The University of Melbourne Professor of Marketing Bryan Lukas, University of New South Wales Deputy Dean Gregory Whitwell, and Wisconsin School of Business Professor of Marketing Jan Heide, examines the reasons why companies over-deliver in the first place. They also show how such tendencies can be corrected.
Their research focuses on two types of organizational cultures that are prone to over-delivery: adhocracy and market cultures. A company with an adhocracy culture focuses on being cutting-edge; its managers are committed to experimentation and pioneering, often for its own sake. Measures of success in this type of company include providing unique and original products with frequent innovations. A company with a market culture is results-oriented; its managers are focused on trumping competitor offerings and define success in competitive terms such as relative market share.
"Our research has found that these two types of culture compel firms to develop products that systematically over-deliver in terms of capability. At the same time, some of these tendencies can be corrected if the firm's culture is also focused on customer needs," Lukas, Whitwell, and Heide said. "A strong customer orientation aligns an adhocracy culture's general emphasis on innovation with the needs of particular customers. A market culture is also prone to over-delivery, but our research showed that this influence is not corrected by a customer orientation. This suggests that the influence of a market culture is more fundamental."
The challenge for business is that attributes that lead to over-delivery are also valued in the market: innovation, experimentation, competition, and originality. Businesses that are prone to over-delivery—such as tech companies, start-ups, and entrepreneurial ventures—could use the research of Heide, Lukas, and Whitwell to help control the tendency to over-deliver.
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