Question

Topic: Strategy

Customer Is Always Right

Posted by Anonymous on 6/30/2010 at 10:07 AM ET 50 Points
Do your believe in this saying? Are customers really always right?
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  • Posted by Frank Hurtte on 6/30/2010 at 10:11 AM Accepted
    One of the first laws of business:
    The customer isn't always right but they are the customer.
    Corollary to the law:
    You need to determine which customers are valuable to your business because not all customers are created equal.
  • Posted by CarolBlaha on 6/30/2010 at 10:20 AM Accepted
    They're not always right-- but they get to be right.

    That doesn't mean you bow to every demand. You sometimes fire a customer just like an employee or vendor.

    As in the book Triple Bottom Line-- you have a responsibility to your shareholders to make a profit. That includes your employees who depend on you to make a living, as do the families of your suppliers. If you are too thin skinned you will harm your business. If you give away profit, you will harm your business. It's not just your bottom line, it's the bottom line of many.

    Know the lifetime value of your customer. The guy who stops in for a cup of coffee a day sounds small, but add that up each month, year-- he brought some friends and they start coming in... Compute the value of that customer in a lifetime, and include the referrals.

    Same token, can you afford to lose that lifetime value-- and an upset customer isn't going to refer you.
  • Posted by CarolBlaha on 6/30/2010 at 11:08 AM Member
    To add, in a perfect world you always deliver good news. But we don't live in a perfect world. The way to keep them is a skill set. There are many times a failure is something you can't control. But you stick with the customer "we going to get thru this" and you will usually retain the customer.

    And to add to Barq-- in my claims work there is a huge growth in issues that are simply "customer unrealistic expectation". In the flooring biz for example, if you knew everything that could go wrong upfront, you'd be walking on bare concrete. So there is a line between too much information and losing the sale and educating the customer.

    The internet is also an issue. While there is a lot of information out there, there is a lot of misinformation. One of the largest flooring manufacturers has put their carpet down in a rhino's zoo area. And that is all the customer sees. "I want the rhino carpet". Well the rhino carpet's warranty and exclusions are on that site too. But they don't read that. So they buy it and buy it in white-- cause it's bullet proof (if it can handle the rhino it can handle fluffy the cat). And when it fails to handle fluffy, junior and that bottle of red wine-- they file a claim and are surprised -- and angry at the retailer-- when it is denied.

    I guess point is, be upfront with agreements and expectations. Make sure you customer knows what is included and isn't. If appropriate, review maintenance and warranty issues with the sale. Be proactive about potential snags.
  • Posted by SteveByrneMarketing on 6/30/2010 at 12:55 PM Accepted
    I agree with above posters.

    The saying "the customer is always right" is better stated as "nobody is ever successful making the customer wrong"

    Steve

  • Posted by telemoxie on 6/30/2010 at 2:55 PM Accepted
    if the customer is always right, then why would they hire consultants?

    One of my favorite stories is from the book, "Up the Organization" by Robert Townsend, who was president of Avis. Avis could only afford to spend half as much money on advertising as Hertz. And so Robert Townsend asked his advertising agency, "how can I get two dollars worth of advertising for every dollar that I spend?". His agency said, "let us think about that and get back to you." After consideration, the agency said, "if you want to get two dollars of advertising for every dollar you spend, let us learn about your business, let us come up with an honest campaign strategy, and do not change it. "

    Robert Townsend agreed. He sent a memo to his staff that any comments about the advertising strategy would have to be technical in nature, e.g. an employee wearing the wrong kind of uniform. They would either approve or disapprove but not attempt to improve the suggested advertising campaign.

    After research, the advertising agency reported that the best that they could come up with was that Avis was the number two car rental company in the world, and it seemed that they tried harder. No one liked the approach. The agency didn't like it, the people at Avis didn't like it. But they had agreed not to improve it, and so they ran it.

    And it turned out to be one the most effective advertising campaigns in history.
  • Posted by michael on 7/1/2010 at 6:47 AM Accepted
    They are not always even right about what they want. Once you have determined what they really want, then they are right.

    Michael
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