CBR Briefing #19

Feb 26, 2018

Why businesses should work to keep their promises
Breaking a promise is costly, but exceeding it might not be worth the effort

Companies laboring to exceed promises made to customers or employees may find that the extra effort is not appreciated.
  • In a series of experiments, Chicago Booth’s Nicholas Epley and University of California, San Diego’s Ayelet Gneezy, asked participants to rate how they felt after experiencing promises that had been broken, kept, or exceeded. The researchers found that broken promises made participants very unhappy, but exceeded promises didn’t make them happier than when promises were kept (see chart).
  • Participants also failed to notice the extra effort exerted in doing more than promised. In their view, those who exceeded their promises worked no harder than those who simply kept them.
  • This behavior can extend to relationships in business, such as between employers and their employees or companies and their customers.
  • In one experiment, participants were asked to imagine buying concert tickets online. They received tickets for seats that were either more poorly situated, better situated, or exactly where promised. Those who got better seats were no more satisfied than those who got the tickets they expected.
  • The implication is that companies should do their best to avoid breaking any promises, but those laboring to exceed them may find that the extra effort is not appreciated.