“The customer is always right” approach is so wrong for startups

I’ve been thinking about this for a long time since the days I was the head of Professional Services in a young startup, the mantra was “The customer is always right!” This included everyone from management and across all teams.

I always find it hard to accept sentences like “That’s the way it works, everyone is doing that”, it just burns me from the inside, I have to understand why we are doing something, to understand the pros and cons…I can’t just do it because other people are doing so. The same thing happened to me with “The customer is always right” phrase, I really wanted to learn why so the first thing I did is find out where did this phrase come from…so according to Wikipedia:

“The customer is always right” is a motto or slogan which exhorts service staff to give a high priority to customer satisfaction. It was popularised by pioneering and successful retailers such as Harry Gordon Selfridge, John Wanamaker and Marshall Field. They advocated that customer complaints should be treated seriously so that customers do not feel cheated or deceived

I’ve had many conversations with people holding executive roles about “The customer is always right” approach, it looks like there are 2 main reasons why their business is using this approach:

1. Externally — convince customers and prospects that the business cares about them and they will get good service
2. Internally — convince employees that the business give customers good service

Sometimes, the customer is right. Often, the attitude that the customer is always right drives away good business as your company focuses on satisfying those who cannot be satisfied, or focuses on creating short term satisfaction over long term customer loyalty.

Your integrity, respect, and sanity are worth holding on and unfortunately, it’s not being discussed enough in business and customer service circles, I think it’s very important. Great things happen when we know we are working hard, fully motivated, and feeling good about the contributions we are making to our customers’ successes.

Don’t get me wrong, customers deserve our respect, and our ambition for their satisfaction, but not always our unquestioned compliance or obedience.

We should never be combative when they are wrong, but we do need to stand up for what we know to be true, fair, and ethical.

My 5 top reasons why this approach is wrong:

1. Some customers are bad for the business
   In most businesses growth is based on the number of customers, this is why we fight to win new deals and avoid losing customers. But some customers are quite simply bad for business. In other words, it’s okay to fire a customer — certain customers! Abusive and disrespectful customers can bring down the morale of the company. They can take fulfillment out of the employees’ jobs. They can suck the positive energy out of the culture. They put employees in a bad mood. And, they can make it worse for the next customer.
   Not all customers are indispensable and businesses must accept that. It is better to let go of a persistently complaining and abusive customer who only end up creating stress amongst the employees. This is irrespective of the amount the customer pays for your product.
2. Nice customers actually get second class treatment
   Using the slogan “The customer is always right” abusive customers can demand just about anything — they’re right by definition, aren’t they? This makes the employees’ job that much harder when trying to rein them in.
   Also, it means that abrasive customers get better treatment and conditions than nice people. Even worse, you effectively reward rude customers for bad behavior if you assume they’re always right. The louder and angrier they are, the more wrong your employee must be.
   That always seemed wrong to me, and it makes much more sense to be nice to the nice customers to keep them coming back.
3. It makes employees unhappy
   Instead of focusing on making your customers happy, ask what you can do to make your staff happy. If your staff is well trained, has adequate authority to make decisions and solve problems, and has the resources necessary to meet reasonable customer needs (and even a few of the unreasonable ones), then you’ll end up with higher customer satisfaction naturally. Your employees will be a joy to work with, and that pleasure in the transaction will transfer to the customer experience.
   Of course, there are plenty of examples of bad employees giving lousy customer service. But trying to solve this by declaring the customer “always right” is counter-productive, so put your people first. And watch them put the customers first.
4. The need is not well defined
   Some may claim to be experts on a certain product or service and complain to you when neither one works. This could be because they used it improperly or that they chose the wrong product/service. As opposed to agreeing with them, you can help them understand how to use a certain product or service correctly. It’s important that they know what is the right product or service they should use and help them find it. If a customer is still not satisfied, refer them to someone else who can help them. Doing so would at least improve your business’s reputation for being honest. Always aim to be as helpful as possible so that they would be more inclined to come back
5. Businesses Have Limited Resources
   Most businesses, especially the startups, operate with limited resources including limited time, funds, and experience. Every business experience its share of abrasive customers, who, whatever might be done to satisfy their needs, will continue to complain.
   Feeling guilty or impatient is actually unwise and it affects your business in a negative way. If the necessary steps have been taken to address the issues of a customer, the business should close the matter and move on.
   No one customer should take priority over your business, and no owner should drain their resources to satisfy one person. Instead, focus your time and effort on your other customers and employees to efficiently manage your resources. Never feel guilty about getting rid of one unsatisfied customer.

Summary and a few tips

It’s also important to keep in mind that the customer is only a human being, with flaws that any of us can have. If you look at the customer as fallible, then it can be more obvious when they’re confused, exaggerate, or an outright lie. If you always believe the customer is right, then you can lead your business practices astray by trying to satisfy everyone’s demands.

I promised some tips, here they are:

1. Ask questions — Ask what led them to their conclusions and determine the results they want. Sometimes the customer has made a bad assumption…and sometimes we’re the ones on the wrong track.
2. Give Examples — If a customer is going down a path that will hurt them, tell a story of a time you’ve seen someone else take that path, and describe what happened. Also, tell a story of a time someone has successfully made it out of a similar situation
3. Tell customers they aren’t right without saying, ‘You’re wrong’:

• Stick to the facts. Avoid pointing to what’s been said, and focus on what’s been done and is documented. It’s difficult for anyone to argue with documented facts.
• Bring up “miscommunication.” Every time I used the word “miscommunication”, it automatically removes any discussion around who to blame. It suggests someone conveyed things one way, and someone understood them another way. A good approach, “I think we’ve had a miscommunication. Let’s regroup and gather all the facts we have.”
• Change their perspective. Get customers who feel they must be right focused on the solution and of the issue. Say, “I think we have enough information now to get this resolved.”
• Offer alternatives. Customers who feel they’re right often like to remain in control. Offer them a few solutions (that work for you, too), and invite them to pick one. Say, “I can either refund your credit card, send you a replacement or give you credit toward the new model. Which would you prefer?”

If you read it all, thank you very much and it’s highly appreciated, you definitely deserve a bonus that is all about customer service, enjoy: