Is the Customer always right? It depends …

The phrase “the customer is always right” has been a staple in customer service for decades and has been influential as it has been controversial. It originated as a way to instill a customer-first mindset in businesses — especially retail and hospitality.

Before answering the question, wether the saying is correct, let’s first take a look at the background and meaning of “The customer is always right”.

Hospitality: “The customer is never wrong.”

It was César Ritz (yes, Ritz like Ritz-Carlton) who said “If a diner complains about a dish or the wine, immediately remove it and replace it, no questions asked.”.

Sure, if similar complaints accumulate, that might be a signal. However, if you read the sentence, it get’s clear this is more about handling courting the customer, than it is about handling quality-issues of a product. Nowadays commonly known as “Return as a gesture of goodwill” — a return policy.

Retail: “The customer is always right — in matters of taste.”

‘The customer is always right, in matters of taste” is a quote by Harry Gordon Selfridge, an American business magnate who lived in 1909.

That is actually the full quote of “The customer is always right” and it gives a completely other meaning.

“… in matters of taste” matters, it gives nuance. It narrows down the scope in which the customer is always right. Always meaning, in matters of taste. The customer can make their buying decision as they wish — a business should sell it to the customer, even if it is ugly, or stupid. It is about their personal preferences. What they buy is right for them.

The cost of misinterpretation: Entitlement and Aggression

The dogmatic misinterpretation of “The customer is always right”, without the nuance and differentiation, led to a sense of entitlement among customers. So much so, that it has dramatic negative impact on employees facing aggression, and second-class treatment.

Nuance matters. Therefore one ought to differentiate and strike a balance between the customer being right and wrong.

Customer-first ≠ Customer-centric

Customer-first thinking, is not the same as customer-centric thinking.

See, when it comes to entrepreneurship, product development, and marketing, this saying isn’t always a rule to live by.

A business needs to find out what customers need, not what they say they want.

Product & marketing decisions are not a matter of taste, they are a matter of strategy. The strategy can be informed by signals from customer feedback, but it is up to the business to make the product & marketing decision — that’s their job after all…

It’s crucial to distinguish between adjusting one customer’s retail & hospitality experience based on feedback, and altering all customers’ experiences. The overall impact is significant and requires balancing the positive changes for one customer against potential negatives for others.

Examples:

Ritz (Hospitality): If the diner would ask for champagne to be served in a water glass, they might get it that way, still every other guest would get their champagne in a champagne glass, the white-wine in a white-wine glass, etc.

Sears (Retail): If a customer orders a hat in an ugly color, they would not try to sell that ugly hat to every customer.

The problem with over-indexing customer feedback

Over-indexing customer feedback can lead to problems. Businesses that do so often find themselves in a reactionary cycle, constantly pivoting based on every piece of feedback they receive. Blind actionism without a vision or strategy.

You become a feature factory building a feature monster without character.

This can result in a lack of focus and a diluted product offering. It’s essential to remember that while customer feedback is valuable, it shouldn’t be the sole driver of your business decisions.

Customers can be dishonest for many reasons, they have unrealistic expectations.

Frank Farrington wrote: “If we adopt the policy of admitting whatever claims the customer makes to be proper, and if we always settle them at face value, we shall be subjected to inevitable losses.

The lazy-trap in “The customer is always right”

The phrase “the customer is always right” can sometimes be a lazy approach to problem-solving. You delegate your job to the customer.

Rather than delving into the root of the problem and coming up with innovative solutions, businesses might simply give in to every customer demand. This might lead to short-term satisfaction, but it can also stifle innovation and growth in the long run.

Attitude vs Behavior

It’s crucial to differentiate between attitudinal and behavioral research. Attitudinal research (Customer Feedback) focuses on what customers say they want, while behavioral research (Analytics) focuses on their actual actions. And the customers words can differ very much from their actions.

Customers might say they want one thing, but their behavior might indicate otherwise. Therefore, businesses should balance between taking customer feedback into account and observing customer behavior to make informed decisions.

Henry Ford, the founder of Ford Motor Company, once said, “If I’d asked my customers what they want they would have said faster horses.”

Customers can provide insight into their immediate needs and pain points, but it’s up to the business to anticipate future needs and develop cutting-edge solutions.

Ask: Is this problem worth solving?

Ultimately, the focus should be on problem validation. Instead of sticking to the widely accepted question, “Is the customer always right?”, a more effective question to consider would be, “Is this problem worth solving?”. One can gauge this by investigating the real nature of the problem, the value it presents to the user and to the business, and its strategic fit.

• What is really the problem?
• What is the User Value?
• What is the Business Value?
• Is there a Strategic Fit?

There will be various issues stemming from customer feedback and internal feedback alike, but not every problem carries equal weight. A swift method to prioritize is utilizing the R.I.C.E. score, which considers the reach or number of customers affected, the impact of solving the problem, our confidence in our estimations, and the effort or cost of solving the problem.

• Reach: How many customers are affected?
• Impact: How much will solving this problem matter?
• Confidence: How sure are we with our estimations?
• Effort: What is the cost of solving this problem?

Conclusion

In conclusion, while the customer’s opinion is important, it’s not the be-all and end-all. Entrepreneurs, product developers, and marketers need to strike a balance between listening to the customer and maintaining their vision to truly drive innovation and growth.