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Why the Customer is (Almost) Always Right
We have all heard the saying that the “Customer is always right” and this is in most cases true. However, most business owners know the truth about this phrase, and they also know that the customer does have certain responsibilities. If this wasn’t the case, there would be no law suits against businesses. What this means is, no…companies and owners do not really believe it, its more of a general rule.
What the phrase means to most business owners is that, we will pretend that the customer is right, even when we know they are wrong, because the cost of losing that customer is greater than not losing them. In most cases, an upset customer will do much more damage to your business through word of mouth than a happy customer will bring. Some studies have the cost of an upset grocery store customer can cost up to $100,000 in lost revenue.
This is why managers and employees are taught this principle, they are not the owners of the business and for all intents and purposes, it isn’t their call anyway. The owner would be willing to take a small profit loss to help them instead of dealing with the bad reputation. All of the business owners I know have encountered situations where the customer is absolutely wrong, they know it – dealing with it just comes with the territory, and for the most part these cases are very isolated.
The reason the customer is right 99% of the time is because they have invested time, money and most importantly TRUST in your company. I see this all the time with the DVDs, you purchased this DVD online and in so doing I know that you took a chance on me, you demonstrated faith in me and therefore, I want to retain that trust, I want you to know I greatly appreciate your support and that is why I am so devoted making GREAT products. I want my customers to look forward to the next one. Building trust, making quality products and having fast, speedy service are the best ways to get repeat business. Sometimes things go wrong, its bound to happen, if I can make it right- awesome.
Having said that, there have been at least 3 or 4 instances I can think of when the customer was not correct, and it was time to walk-away. Over the last few years, I have “blacklisted” a handful of customers. This means they are blocked from future purchases and I not longer want their business.
Here are some general rules on when it is time to walk away:
1. You have made at least 2 or 3 legitimate attempts to satisfy their needs and they are still demanding more. This is a good indication you are being taken advantage of and the customer has overstepped their bounds.
2. They are threatening, swearing at you or calling you names.
3. You have physical proof they are intentionally trying to deceive you.
4. They are no longer a customer. This can happen once you have refunded their money, or the expense of meeting their needs has far exceeded any profit you hoped to gain from the original transaction.
I think the best policy is to always try to work it out, but yes, there may be some more situations where the customer is no longer right. Always be sure to have contracts signed- it’s your best insurance against problems, even if you do not think they will happen, they can and they will.