Maybe it’s time to rethink
‘Customer is always right’

ON GUARD: Sometimes they’re not


Published on Friday, February 29, 2008



Management experts have begun to rethink the old axiom "The Customer Is Always Right." The original phrase was coined by Harry Selfridge in 1909 when he opened his department store in London.

Typically, the phrase is invoked to try to convince customers they will receive good service and to get employees to give good customer service.


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But there may be situations where the customer isn’t right for your business. Sometimes, this well-worn axiom backfires.

Abrasive and abusive customers will cite "the customer is always right" in order to demand just about anything. If your company supports the concept, then those customers are right by definition, aren’t they?

Do abusive customers get better treatment than your nice customers do?

Which type do you want coming back?

Any child psychologist will tell you that reinforcing bad behavior by rewarding it produces more bad behavior. So why do business people think this does not apply to clients?

Business owners think "the more customers the better." Not necessarily. Some customers are just bad for business.

Large companies have turned to market segmentation to identify those customers who produce the most revenue. Those customers get preferential treatment. Other customers never make money for a company. Those customers still get good customer service, but not preferential treatment.

A classic example of this are VIP lounges in airports. A small business can adapt this principle to its customer service.

There are many more examples of bad customer service by loutish employees, but trying to solve this by declaring to the employee "The Customer Is Always Right" is counterproductive. Fire the bad employee.

Gordon Bethune, in his book "From Worst To First," about the turnaround of Continental Airlines while he was its CEO from 1994 to 2004, wrote:

"When it’s a choice between supporting your employees ... or some irate jerk who demands a free ticket to Paris because you’ve run out of peanuts, whose side are you going to be on?"

Blind allegiance to "The Customer Is Always Right" flatly favors customers over employees. Employees resent it when owners, bosses and managers side unfairly with the customer. It leads to worse customer service, not better.

Business owners and managers who put employees first make their employees happy. Happy employees give better customer service because they are more motivated and they have the all-important buy-in to the company’s goals.

You already know the conventional wisdom, that it costs six times more to find a new customer than to keep an existing one. Calculate the cost of recruiting, hiring and training a new employee. Then compare the two.

Odds are, you are not Continental Airlines, but a business that depends on any customers you can persuade.

Or worse, you depend on a small number of clients, one or two of whom drive you crazy with their demands. In that case, your only real hope is to broaden your client base.

Very infrequently, you may have to fire a customer if they are belligerent, hostile, abusive and refuse to accept your efforts to satisfy them.

On those rare – and I emphasize, rare – occasions, you have to decide whether the customer is shopping for a fight rather than shopping for what you sell.

These are perilous waters and only amount to one in 10,000 situations.

But don’t be like the Tucson business owner who argued to our office that any customer who complains is "just trying to get out of paying their bill!" Or the one who believes she has graciously allowed customers to spend their money with her and who consistently advises those who are dissatisfied to seek mental health care.

Reconsider whether "The Customer Is Always Right." Perhaps a better way to say it is "The customer is usually right." But for the really astute business owner, it is something to be considered on a case by case basis.

 

Contact Tom Collier, president of the Better Business Bureau of Southern Arizona, at tcollier@tucson.bbb.org or (520) 888-5353 or 1-800-696-2827 toll-free outside of Tucson. The BBB of Southern Arizona serves Pima, Cochise, Santa Cruz, Graham, and Greenlee counties in Arizona and all of the state of Sonora in Mexico. The office is at 434 S. Williams Blvd., Suite 102. The website is: http://www.tucson.bbb.org . Collier’s On Guard column appears the first week of each month in

Inside Tucson Business.

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Comments

Solveig wrote on Mar 3, 2008 2:00 PM:

" I am retired from a white color profession and for a year have been working part time in a big grocery store chain and this with the customer always being right is WRONG!!! what it is doing is allowing the customer to abuse me and my co-workers!! because they are in a bad mode and things are not perfect to their liking they take it our on us, the cashiers and we have to take the verbal abuse. if i was talked to that way away from work i would call the police as it is abuse but because i am on the "clock" i have to take it and smile. it is WRONG!!!! "

KT wrote on Feb 20, 2008 8:03 AM:

" At Ace Hardware on St Mary's Rd. The employee lost my house key as I was getting it made. I never recieved my house key back. My house was locked it was a mess. I contacted the manager and got the run around until I talked to the owner by phone. He told me that if he sided with me, he would be calling his employee a liar. It ended up I couldn't get into my house for 3 hours and had to get a new deadbolt. I'm a good customer, their a bad business. "

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