Why The Customer Is Not Always Right

The saying, “The Customer Is Always Right” was conceived and popularized in a time when businesses engaged with consumers in a high transactional manner. Companies operated with caveat emptor (buyer beware), allowing them to exercise advertising and business practices that otherwise be deceptive and even illegal by modern-day standards. Companies that adopted a customer-centric focus were able to differentiate themselves from their competitors by taking customer complaints seriously.

However, times have changed – consumers now have government legislation that protects them from deceptive business practices and businesses have faced increased competition, forcing them to compete on a multitude of factors. With that, customer behaviours have changed and not always for the better, begging the question of what if the customer is not always right?

Why the customer is not always right

There are numerous, inter-related reasons as to why the customer is not always right. More importantly, giving customers the ultimate negotiating power can upend and destroy the value that an organization creates for its stakeholders. Reasons for why the customer is not always right include:

• Resource Constraints – every business operates under resource constraints that dictate the types of products and services they can provide. Policies and procedures are one way to ensure that a business operates within its constraints so that it can continue thriving. Letting customers defy these policies and practices can dramatically impact operations and even run a business into ruin.
• Customers are not experts – while customers are great for understanding what they want from a business, they are not the experts in the product or the organization. A series of interdependent decisions and factors were considered in order to produce and deliver the product and service the consumer buys; a customer request may not actually be feasible given all of these factors.
• Diminished value of employees – tilting all negotiating power to the customer leaves employees with no authority or autonomy over their role. This can become incredibly demoralizing for frontline employees who shoulder most of the burden of a disgruntled customer. The lack of empowerment and authority can breed resentment and can lead to lower performance, toxic work culture, and high turnover.
• Drives divide between management and employees – adopting a customer is always right policy requires enforcement of the policy by management. This reads as though employees cannot be trusted to resolve issues within the business constraints and signals that employees come last.
• Customers that are no good for business – if it costs more to service a disgruntled customer than the revenue they generate then the business should cut its losses and drop the customer. The cost of the customer being right can extend beyond real dollars including loss of employees, serious disruption in optimized operations, and even irreversible damage to corporate culture.

Balancing employees with customers

As organizations have evolved, so have their relationships with their stakeholders. Where, in the past, shareholders and customers reigned supreme, the focus has now shifted to all stakeholders including employees. At the same time, organizations have become obsessed with understanding their customers. Methods that drive success, such as design thinking, are praised for their customer-centric focus. Striking a balance between employees and customers is key in delivering great customer service and driving company performance.

Many business leaders now focus on employee engagement as a way of driving high-quality customers. The belief is by taking care of employees, they will take care of the business. By focusing on their relationships with employees, managers can improve overall employee morale and promote a positive work environment, leading to higher performance in all areas of the business. Employees who are happy and engaged will act as ambassadors of the business and provide better service to customers. This ultimately produces happier customers who are more loyal and promote the business through word of mouth.

Companies can engage with employees by listening to feedback, including employees in the decision-making process, and empowering them with autonomy and authority over their jobs. Having employees take a participatory role in shaping how customer service is delivered will provide employees with ownership and accountability. It also builds trust between employees and leadership which allows for the overall business to work productively to organizational goals.

How to manage a bad customer

Organizations that want to strike the right balance between employees and customers and adopt a virtue where the customer is not always right will need to determine a process for handling abusive and irate customers. Some recommendations for managers and frontline staff for handling disgruntled and highly unreasonable customers:

• Be polite but firm – as a manager, once a customer has been told no by frontline staff, stand by the answer. This demonstrates solidarity with employees and allows the team to continue working together towards company goals. It also sends a signal to the customer that their request is truly unachievable.
• Be empathetic – evaluate whether or not the customer’s request is actually unreasonable by putting yourself in their shoes. If what a customer is asking for is ubiquitously available, then there is an opportunity for improving how the business delivers service.
• Proactively managing customer expectations – complaints often come as a result of misunderstandings, especially when an organization is undergoing change. Communicate organizational changes to customers as clearly and as often as possible to avoid misunderstandings.