We all know the famous quote, “The customer is always right.” It was coined more than a century ago. In the United States, it was popularized by Marshall Field during the early 1900s. In the United Kingdom, it was popularized by Harry Gordon Selfridge of luxury retailer Selfridge’s fame. Since then, businesses have used it generously to demonstrate their focus on customers. Don’t we still see CEOs, business owners, and shops proudly displaying this message in their office or place of work?
Although this focus is well intentioned, I wonder if they understand the impact of the statement? I have seen CEOs establishing it as a corporate mantra, reinforcing the idea among their employees by communicating it in all forums. If customer-centricity is what a business would like to embed, I would say this is a hazardous mantra to adopt because it can lead to not understanding what customers really want, set up false expectations, and worse, could demotivate employees.
The customer is not always correct, Let me tell you why.
Customers decide emotionally and express rationally
Customers are irrational. They often make decisions emotionally and are dependent on the context in which the decisions are made. If you ask customers why they love Coke over Pepsi, their preference will most likely be based on brand preference and it’s influence on their emotions, rather than a reasoned explanation.
Sometimes the decision is based on competing brands that are available on the shelf; sometimes it’s a sense of urgency created by the seller (saying the product is in limited stock); or the emotion generated by remembering an advertising jingle. For example, a supermarket selling German and French wine found that the type of in-store music being played influenced the sales of type of wines they sold. The day when the supermarket played French music, about 80 percent of wine-buying customers bought French wines. The day German music was played, most people bought German wines.
Another point is that humans’ desire for clarity is huge. So whenever we struggle to find an answer, we often jump to an immediate conclusion and reason that may not be accurate.
Organizations need to get into customers’ shoes to understand what’s important to them. Hence the need to conduct anthropological studies to observe customers and their behavior in their habitats. Not surprisingly, Steve Jobs said, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”
Customers don’t understand the value proposition
To explain this point. Let me give you an example. You check into a budget, no-frills hotel, and then complain that you were not treated well. You had to carry the luggage to your room, there was no room service, the rooms were just cleaned once, and you felt unattended while in the restaurant.
However, none of those amenities were supposed to be there. This was a self-service hotel where the product proposition is about providing a clean, no-frills accommodation where customers are expected to do everything themselves. It’s foolish to compare this with the product proposition of a full-service luxury hotel, where from the time you enter the hotel door, you are treated like royalty.
The customer needs to understand the strategic positioning of the product and the segment that is it catering to. If you are going to buy a Maruti 100, you can’t expect the purchase experience of a BMW. However, customers often seem to forget that and then complain about it. Customers need to understand the value proposition being provided by an organization, and see if it aligns with their needs and expectations.
Customers can take advantage of company policy and employees
When the organizational mantra is, “The customer is always right,” it can preclude employees from doing what’s right for the organization. Let me give you a few examples. A customer knowingly makes a false claim about a defective product to a retailer. If the customer is always right, and yet the staff knows that the claim is false but aren’t allowed to take the correct action (perhaps denying a refund or return), this would clearly not be in the interest of the company.
Or let’s say a disgruntled customer mistreats a company employee. If the customer is always right, he will have to take the customer’s abuse without taking any action or informing higher authorities. This can severely demotivate staff. I am not saying that the employee should also mistreat a customer who has mistreated him. But if someone misbehaves, suitable action should be taken. The customer shouldn’t think he can get away with everything.
When customer-centricity is the objective, employees should always serve customers and meet their expectations predictably and profitably. However, they shouldn’t reward bad behavior.