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The Customer Isn't Always Right - Here’s Why

While the phrase was coined in the retail sector, if you’re in business today you must have heard the phrase, “the customer is always right.” Coined by Harry Gordon Selfridge in 1909, the popular phrase was used as a slogan by Selfridge’s London department store, giving customer satisfaction the highest priority. Over 100 years later, businesses are still using this motto to convince customers they are receiving the best possible value for their money.

While this ethos is definitely a valuable stance for a business to take, sometimes customers are simply dead wrong. They can be rude, dishonest, and even take undue advantage of  lenient customer policies the best businesses often offer.

Let’s consider the following real-life story of one nagging customer published on Nuts!: Southwest Airlines' Crazy Recipe for Business and Personal Success by Kevin and Jackie Freiberg:

Jim Ruppel, director of customer relations, and Sherry Phelps, director of corporate employment, tell the story of a woman who frequently flew on Southwest, but was disappointed with every aspect of the company’s operation.

In fact, she became known as the “Pen Pal” because after every flight she wrote in with a complaint. She didn’t like the fact that the company didn’t assign seats; she didn’t like the absence of a first-class section; she didn’t like not having a meal in flight; she didn’t like Southwest’s boarding procedure; she didn’t like the flight attendants’ sporty uniforms and the casual atmosphere. And she hated peanuts! Her last letter, reciting a litany of complaints, momentarily stumped Southwest’s customer relations people.

Phelps explains: “Southwest prides itself on answering every letter that comes to the company and several employees tried to respond to this customer, patiently explaining why we do things the way we do them. [Our response] was quickly becoming a [large] volume until they bumped it up to Herb’s desk, with a note: ‘This one’s yours.’ In sixty seconds, Kelleher wrote back and said, ‘Dear Mrs. Crabapple, We will miss you. Love, Herb.’

Businesses, while still remaining compassionate about customers’ needs and demands, are now taking strict steps against the annoying ones. The focus is therefore shifting from ‘The customer is always right’ to businesses that “doesn't take any guff from customers.” But what went wrong?

Why the Customer Isn't Always Right?

The theory was indeed made with good intentions. Selfridge and other successful retailers of his time, including John Wanamaker and Marshall Field, advocated that customer complaints must be taken seriously, lest their buyers feel deceived or cheated. It was a novel and welcoming attitude especially during the time when “caveat emptor” -- that is, “buyer beware” -- was a legal maxim.

Many other entrepreneur of the time adopted similar approach. The Swiss hotelier César Ritz, the founder of Ritz hotel enterprises, made “le client n'a jamais tort” (the customer is never wrong) the slogan for his hotels. He even went ahead and said, “If a diner complains about a dish or the wine, immediately remove it and replace it, no questions asked.”

But little did Selfridge or Ritz realized that customers too can be dishonest, disrespectful and rude, misuse policies that were made to safeguard their interests and/or have unrealistic expectations. Going back to the story of the Southwest Airlines, there are customers like Mrs Crabapple who make mountains out of molehills, while other just try to fulfil their ulterior motif at the company’s expense.

In order to be successful, businesses need to listen to their employees too. ‘The customer is always right’ can seriously affect your employees’ moral, especially when they are being punished or criticized wrongfully. A better approach is to respect and be compassionate towards your people as well and they will return the favour by providing premium customers service. Besides, doing the opposite usually leads to worse customer service.

If you are still not ready to abandon this phrase, here are 3 reasons to re-think your strategy.

1. It Affects Employee Morale

As an entrepreneur, you should treat both your customers and your people alike. It is imperative to ensure that you are not being unfair to your employees to remain true to the maxim “The customer is always right”. If there is a conflict between unruly customers and your people, side with your employee especially if it is not their fault.

In his book From Worst to First: Behind the Scenes of Continental's Remarkable Comeback, Gordon Bethune said that, “When we run into customers that we can't reel back in, our loyalty is with our employees. They have to put up with this stuff every day. Just because you buy a ticket does not give you the right to abuse our employees.”

More often than not businesses come across customers who are unreasonable and demanding. Some you can reason out and others you can’t, no matter how hard you try. But if it is a choice between siding an irrational and demanding customer and supporting your employees, always choose the latter. It is your employees who work for you and with you to make your business what it is today.

It is true that unhappy customers can cost heavily to your business, but unhappy employees will take you nowhere. Value your people, trust their ability to handle situations and support them if a customer goes out of line. This is the best way to avoid employee resentment, before they become major issues.

The goal is to balance both your employees and customers, without squarely favouring one over another.

2. It Gives Unfair Advantages to Rude Customers

Abusive customers often point out the maxim “The customer is always right” to demand just about anything they please. But have you ever thought that this might make the jobs of your employees much harder?

Another issue that often arise from such business strategy is that abusive and lousy customers end up getting better treatment than the loyal, trustworthy ones. Again, that’s not something you would want as it is downright wrong. It definitely makes more sense to be nice to the best customers feel valued, and to rein in the abusive and obnoxious lot.

Understand that your customers are not above reason: they must pay for the value they receive and do his or her share. For example, there are examples of customers asking for a refund/replacement even after the grace period is over or customers pretending to be dissatisfied just to get a discount or free gifts. And of course, who can forget the legend of the customer who returned used car tires to Nordstrom, a fine clothier? Stick to your company’s policy for the given issue (for example, your return or refund policy) while demonstrating your sincere concern.

3. It’s Better to Let Go

Let’s take the example of Mrs Crabapple once again: it was obvious that she was a regular customer of Southwest Airlines -- yet then CEO Herb Kelleher bid her goodbye, forever. Why? Simple because some customers are just bad for your business, like Mrs Crabapple. They affect the experience of good customers and create a higher cost -- psychologically and fiscally -- than they create value for your business. Mrs Crabapple was not only affecting the morale of the Southwest Airlines’ employees, but also those of its existing customers.

Such nagging customers simply roadblock your time and effort, which you could otherwise spent on customers who appreciate the value you deliver and therefore benefit your business. Besides, these happy customers tend to spend more money on your brand; a Harvard Business Review finds that customers who are happy with your products and services spend 140 percent more. They also drive word-of-mouth marketing, telling their peers on social media about their experience. This means, even if you are spending less than 1 percent of your time on customers like Mrs Crabapple, you are likely to lose a lot of money in the long run. 

You don’t just need a higher volume of customers -- you need the kind of customers who are knowledgeable, pay fair price for the value they receive, collaborate or willing to do their share, and respect your brand and value. The rude, irrational, and abusive customers (unless they really, really have reason to be rude) are simply bad for your business.

Conclusion

Of course, there are myriad of examples of bad employees and lousy customer service that force customers to behave obnoxiously at times, but don’t let the maxim ‘the customer is always right’ work against you and your people. While you must treat customers with respect, don’t shy away to take required steps if the customer is trying to take unfair advantages or being dishonest, disrespectful or disingenuous.

Have you dealt with problem customers in your business? What did you do? Let us know in the comments!