I ran across a blog today that wanted people to know that the customer is always right and while that long-held idiom may stand true for some people, it is not always the best approach.

Customer service is very important, without the customer you don’t have a business. Great businesses are built upon transforming a customer’s experience by providing them with a solution to a problem they wish to have solved. The companies who excel at this are the ones who truly serve the customer, create a better experience and who know how to see their service/product/offering in the eyes of the customer.

These companies grow and change and adapt to the customer and care about how the customer feels about their service/product/offering. They find ways to use innovation and technology to keep the customer interested, current and offer feedback. In these cases, the company is listening and caring deeply about the customer experience, and that’s important!

So when is the customer NOT right?

1. When the customer ‘in the right’ gets to supersede the manner in which the employee delivering the service/product/offering is treated. In his book, ‘The No Asshole Rule’, Robert Sutton, weblog here , makes a compelling case for taking a good hard look at company values, and NOT to allow the customer to be first if it is at the expense of the people who work for you. He gives some great examples of companies willing to fire the customer in order to maintain a cultural dignity and respect for the employees within. If you allow the customer to be right in this case, you damage the culture within your company.

2. When the service/product/offering has been contractually met, with very good service and the customer insists on bleeding it out until it is now costing your company to do business with that customer. This often happens in the case of project management deliverables, where the customer will have eaten away at a project team to the point of exhaustion and no leader steps up to say,

“Mr. Customer, we understand your needs and are more than willing to provide those to you, however they do not fall within the scope of this project. Let us know when we can meet to discuss a change-order for that added functionality/application/offering.”

If you look at any successful major corporation you’ll see when they add anything onto the original packaged offering it’s an up-sell. If you allow the customer to be right in this case, you are damaging your own business and profit margin.

3. When the customer is flat-out-wrong. Contractually you have agreed to something and they have defaulted on the agreement, they are unethical or they have created public action that will harm your company. I’m not saying that you get too militant here, or be entirely litigious, but what I am saying is as a company you must respect the business you do and that includes being selective with the company you keep. We have some very tough times ahead, in a difficult environment there is temptation to work with less than ethical customers out of desperation, and that kind of action is understandable, but be very selective about the customer associations you keep.

There is no excuse for poor customer service; there is no excuse for believing your deliverables are more important than the customers’ needs. I would even suggest if you wish to be seen as a GREAT company, that you exceed the customer expectation in terms of service. What I would suggest, however, is that it not be at the expense of your employees, profit margin or good-will. A brand new year is a good time to weed through the good customers and the bad and set a plan for phasing out the bad ones.

All the best for a prosperous 2009!

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Patti Dragland