Why The Customer Is Always Right, But Your Old Retail Boss Is Wrong
Why The Customer Is Always Right, But Your Old Retail Boss Is Wrong
How the modern interpretation of "The Customer is Always Right" misses the mark
If you’ve ever worked retail, you’ve certainly had a boss tell you “The customer is always right”.
That saying never seems to appear when a customer has calmly noted a mistake—It’s always to defuse an angry situation with an irate customer.
Your blood may boil even reading the phrase, but the customer IS always right—just not in the way most managers seem to think.
Lets dive into why your old manager was wrong, why the customer is always right, and how you can use the difference to guide your business
Was Your Manager Wrong?
Absolutely. And I’m sure it’s great to hear someone in your corner years later.
Throwing employees under the bus to appease the minority of unreasonable, angry customer is a terrible path to employee retention, and a profitable company.
Retail loses $19 Billion in sales and 230 million days of productivity every year from employee turnover.
The retail turnover isn’t just the cost of business; retail turnover is 4x other industry average because of this “appease-at-all-costs” manager mindset.
The costs to a lost sale may be immediately visible, but the costs of a lost employee are hidden and larger.
Happy employees are 13% more productive. Unhappy retail employees give the business a 1-2 punch—less productive when working, and more likely to quit unexpectedly.
As if created to be the perfect foil to Wal-Mart1 regarding employee satisfaction, Costco proves an employee-focused retailer can succeed:
Costco offers significantly higher wages than comparable positions at Walmart
Costco offers health insurance, and pays most of the employees’ premium
Resulting in:
The average Costco employee generating nearly triple the revenue produced by the average Walmart and Target employee
If employee satisfaction is important, does that mean we can neglect the customer and still run a good business?
No—the individual customer may not be correct, but the Customer2 is always right
But The Customer Is Always Right
The story begins and ends with your customer.3 If you’re unable to sell a product someone wants—at a price they can afford—you’re out of luck.
You need a desirable offering.
“The Customer is always right” should mean that a business should sell what the customer base wants.
You’re the clothing orderer at the New York City Ralph Lauren. You’re a trendsetter. People come to your store to be shown what’s in style.
But you’re not insulated from customer preferences, even as popular as you are.
You think black raincoats are the bees knees4 and match everything. So you order 150 black coats and 10 assorted other colors for the next few weeks.
If customers get into no-holds-barred fights over the few yellow jackets, you need to stock more yellow jackets.
You can ignore a single customer, but you can’t afford to ignore what your customer base wants5.
If you continue to order black raincoats—because of the your fashion beliefs—despite the clear customer preference for yellow coats, you will eventually fail.
Your personal preference isn’t right. The Customer is always right
What the saying should mean isn’t how managers understand it.
Each individual customer can be wrong, but your business needs to serve customers—not expect them to grovel and pick whatever you serve them.
How To Use The Difference to Guide Your Business
Customer satisfaction matters.
But employee experience may matter just as much. If you’re throwing your employees under the bus for your customers, you’re not setting yourself up for success.
Instead, you should look at the trends6, fears, and wishes of your customers.
You need to be empathizing and understanding your customers to the highest level possible so that you can win their loyalty.
You may know your business area extremely well—you may know what product is the best value for the money, or the one with the most features, but it doesn’t matter unless the customer base agrees.
Customers vote with their feet.
Because of that—in the long run—the Customer is always right.
Or any customer-over-employee business model
Capital “C” customer
True for any non-governmental entity. But even for governmental entities, someone is still the “customer”
Good and trendy
Important Note: This does not mean that you should only aim for mass appeal. You can make a great company catering to an extremely specific niche. However, ignore your specific customer base at your own peril
Don’t let the word “trends” keep you from doing focus groups or other interviews with individuals. Those stories are important, especially when aggregated.