The customer isn’t always right. Or is it? This is a question that every customer-first business asks itself at least once in its lifespan. And while we might think there is no correct answer that can be applied to every case, there might be a way to distinguish where to use this approach, and where to drop it.
Where does Customer is always right come from
The following phrase, Customer is always right, originated in the early 1900-s when Harry Gordon Selfridge (founder of Selfridges London department store) decided to create it as their slogan and build their business model around this idea. He believed that customer satisfaction should be a top priority of their business and they acted upon it.
The aim of this was to assure the complaints are taken seriously, so the customers don’t feel deceived. However, they are not the only ones. César Ritz, the famous hotelier, had a similar approach with the Customer is never wrong. Little did they know that this mindset will shape many companies’ business models 100 later.
Why Customer is always right is wrong
It’s not questionable that there were good intentions behind this slogan, but today we know that there are some negative impacts this approach can have:
- it gives an unfair advantage to difficult customers;
- difficult customers can cost you more time, money, and energy than they are worth;
- employees are placed against customers and they can lose morale if they feel untrusted;
… and many more.
About 64% of all complaints are not fully true. (Joosten, 2017).
This brings us to another problem. By integrating this mantra as your business model, you are opening yourself to a wide number of illegitimate complaints just because the customer is always right, right?
5 reasons why customers complain in the first place
Contrast effect
Many times, customers tend to have high expectations of the business due to a strong brand, high prices, or a brand promise. When the gap between customer expectations and the company’s performance is too big, customers are more likely to complain. Not only will they complain, but the bigger the difference between the two, the higher the chance customers will exaggerate the complaint.
Loss of control
Loss of control occurs when a customer’s behavior doesn’t result in the expected outcome. For instance, that can happen if the customer tries to reach customer service multiple times regarding a certain issue, and they are not able to get to them in any shape or form. If the customer feels helpless or left without a choice, there is a possibility for a complaint, especially when they believe that exaggerated complaints will have a bigger impact.
Halo effect
Sometimes, a customer’s negative experience with one aspect of your company can open their awareness which can lead to a negative evaluation of the other aspect of the business. By experiencing one negative situation, the customer becomes more sensitive about the other issues they might potentially experience and more prone to complaining.
Subjective norm
There are some cases when customers act under the influence of other people. It is assumed by the Theory of Reasoned action that one person’s behavior partly depends on how other individuals expect them to behave. This is a so-called social norm. For that reason, many customers like to include other people’s opinions to strengthen their complaints.
Attitude towards complaining
Studies have shown that customers who have a negative predisposition towards complaining in general, will be less likely to complain when they are dissatisfied themselves. Therefore, customers who are on the opposite side will more likely to engage with negative feedback, and they will even be prone to filing illegitimate complaints.
What to do when the customer just isn’t right
Speaking of illegitimate complaints, imagine a scenario. Let’s say you run a luxury hotel working on a high occupancy where your main focus is providing the top service and pleasing the customer. A young couple checks in, thrilled, as it’s their first time at your hotel. They enjoy the area, eat at the hotel restaurants, and drink at a bar during the evening.
At the time of checkout, they pay their bill with cash and return in half an hour complaining they didn’t get the rest of the money back. You apologize, check the camera, and count the cashier, only to find out you did return the rest of the amount.
There is no question, it is all there. The customer is wrong. Nevertheless, guests don’t accept that as they continue to yell that they have been scammed, threatening to spread the “fraud” all over the internet.
What should you do?
The right customer is always right
According to this customer-centric philosophy, to answer the question above, you should know the answers to the following questions first:
- Is that customer your regular customer? Since when?
- How often do they use your services or buy your product?
- How much do they usually spend?
- In what manner are they supporting your business?
Peter Fader, the author of Customer Centricity stated in his book the following: The customer is not always right. Rather, the right customers are always right.
Having this in mind, imagine the same situation from the story above, just this time with an older gentleman who stays in your hotel every year in August for two weeks. He is your valuable customer and you’ve never experienced any problems with him before. Now the question is, should you treat him the same way? Because, according to this strategy, there should be a difference. It is up to you to decide.
We wrote about high-value and low-value customers in more detail in our blog post about customer-centricity.
Conclusion
To sum it all up, the customer is just not always right. While a customer-centric method suggests diversifying “right” customers from “wrong”, there is no one size fits all answer. It’s up to you to decide if you will act upon this principle, or not.
If you would have to operate against your policies, the customer is ill-informed or maltreating the employers, or if you realize that it’s not worth the time, money and energy, then you should definitely reconsider your approach. Just remember, no matter what you decide, you should always stick to your core values.
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