Companies let go of troublesome employees. Is it ever a good idea to apply the same practice to troublesome customers?
You mean, is the customer really always right?
The obvious answer is yes. You can’t build a business without trying to satisfy every customer, even cranky, annoying, or unreasonable ones. Customers are like relatives. You can’t pick them, so you better learn to love them.
But—and this is not an insubstantial but—there are some circumstances where that old adage about customer supremacy can actually be destructive, and it makes sense to say no or even good-bye.
The first is easy: It’s when a customer’s demand for price destroys your profitability, or worse, creates industry pricing chaos. That’s when you have to hold the line and dump the customer even if it drives your salespeople crazy.
The second circumstance is similarly unsustainable: It’s when a customer demands a one-off product that sends your R&D group in the wrong direction, away from your own strategy and financial goals. Again, this is a case where your salespeople might be hollering for support but where the long-term diversion of resources is a killer. Unless it is an exceedingly profitable customer, you have to just say no.
The third circumstance is more nuanced. It’s when a customer disrespects your people. Now, sometimes your big customers—the market-share monsters—can act a little obnoxious. They own you, and they know it. So with them, you may need to endure some rudeness or outrageous demands as part of the cost of doing business. It’s different when the customer doing the berating is not your meal ticket but just a jerk. Then, your first line of defense is to switch the salesperson on the account, putting in someone with tougher skin and the mettle to say: “Hey, this has to stop.” If that fails after a good try, it’s time to walk.
Bottom line, we’re not recommending that anyone ditch their “The Customer Is Always Right” plaque. We’d just add a little asterisk.
This question and answer originally appeared in Business Week magazine on February 19, 2007.
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