Let’s be a customer for a while. Say, we are the project manager for a company, and deal with many vendors across the board for various supplies. We have two vendors. Vendor A has informed that he would be delivering a critical component at 2 pm on Monday. Vendor B has promised 11 am on Monday.
Vendor delivers the component at 12 noon (two hours earlier than his promised time) while vendor B also delivers it at 12 noon.
While both have delivered the component at the same time, vendor A will most likely be perceived to be more reliable than vendor B. Vendor A is known to have under promised and over delivered while vendor B has over promised and under delivered.
Here lies a good learning for a small business owner. In fact it applies to any type of business, whether small or large. Always try to under promise and over deliver. Vice versa will usually land the business in trouble.