You’ve probably even used it wrong yourself
I was meeting with an entrepreneur who wanted my help dealing with a high-maintenance customer. The problem? The customer was always demanding new features. And I mean demanding.
The entrepreneur showed me a few of the emails the customer had sent her over the prior year. Each one described, in detail, a feature he wanted that another product had, and if she didn’t build it for him, he was going to cancel and go to the other company.
The feature requests were only loosely aligned with the kind of service the company was trying to provide. The entrepreneur was building an email marketing platform, but the customer was asking for CRM functionality, advertising functionality, design functionality, and a bunch of other things. He basically wanted Salesforce plus Hubspot plus Canva plus Google Ads all baked into one software that only cost a fraction of the price.
“Just tell him you won’t do it,” I told her. “The things he’s asking for aren’t what you’re trying to build.”
“But he’s a big portion of our revenue,” she replied. “Plus, isn’t the customer always right?”
“Definitely not,” I told her. “At least, not in the way you’re thinking. You sound like my mom.”
“Your mom?” she asked. “What do you mean by that?”
I began telling the entrepreneur about my mom’s love of coupons. I mean she seriously loves coupons. Possibly even more than her five children (or some of us, anyway). Growing up, I remember she had an old fishing tackle box filled with coupons that she kept in her car. Once a week she’d bring her box into the house and sit at the kitchen table until the early hours of the morning sorting and organizing so she always knew what she had and could pull out the perfect coupon at a moment’s notice.
During her weekly sorting sessions, my mom carefully removed all the expired coupons. But she didn’t necessarily throw them away. Instead, she divided them into three piles. The smallest pile was the garbage pile. The largest pile contained the coupons for businesses she’d had luck convincing to accept expired coupons. And the third pile contained coupons for businesses that hadn’t been so accommodating, but she wasn’t done trying to convince them.
Her strategy for convincing people to accept her expired coupons was blunt but effective. She’d just remind the person she was talking with — usually the manager, who she’d insisted on seeing — that “the customer is always right.”
You’ve surely heard someone say the same thing before. It’s one of the most common and often-cited phrases in consumerism. But it’s also completely wrong. Or rather, most people — including my mom and the entrepreneur I was meeting with — are interpreting it incorrectly. While misinterpreting the phrase is great for people like my mom, when entrepreneurs misinterpret the relationship between customer and company, it can end up costing them their entire businesses.
Up until the end of the 19th century, the relationships between buyers and sellers might best be described as adversarial. Sellers often did whatever they needed to convince people to buy (including gross misrepresentations of their products and services), while buyers approached every transaction with a healthy skepticism.
Because of this contentious relationship, a common maxim of the time was caveat emptor, which is a Latin proverb meaning “buyer beware.” In other words, as a consumer you knew every purchase you made was at your own risk. If you didn’t get what you thought you were paying for… well… that was on you.
However, in the early 20th century, the relationship between buyer and seller began changing alongside the emergence of modern department stores. Entrepreneurs like Harry Gordon Selfridge (of Selfridge’s in London), John Wanamaker (Wanamaker’s in Philadelphia), and Marshall Field (Marshall Field’s in Chicago) were pioneering a new, “one-stop shopping” retail model that relied on customer satisfaction in order to thrive. Since you couldn’t have satisfied customers if they were constantly worried about getting cheated, the owners of the new stores taught their employees to adhere to the policy we now know as “the customer is always right.” But it doesn’t necessarily mean what you think.
I can certainly understand why consumers cling to a phrase like “the customer is always right.” It seems great for them because it sounds like they should get whatever they want no matter how unreasonable.
However, despite how great the phrase may sound, consumers intuitively understand why businesses can’t actually operate like that. Heck, even when my coupon-loving mom fails to convince the overworked, underpaid manager of the local hole-in-the-wall Mexican restaurant he should accept a coupon that expired six years ago, she simply says, “oh well… it was worth a try,” and shrugs it off. Why? Because business isn’t about making customers happy. Business is about monetizing customers.
To be clear, I don’t mean that businesses shouldn’t try to make customers happy, but I also recognize that making customers happy isn’t why businesses exist. After all, if Apple really wanted to make me happy, they wouldn’t try selling me a $1,000 phone every year. They’d give me one for free.
Conversely, if Apple could convince me to give them $1,000 every year while driving me into a level of rage Bruce Banner would be proud of, I’m sure they’d be willing to do that, too. What this tells me is that, fundamentally, Apple doesn’t want me to be happy. Apple wants me to buy more products. If the best way to get me to buy Apple products is by making me happy, they’ll do it. But their business doesn’t exist to make me happy. My satisfaction — my “being right” — is in support of their business goals.
Now that we’ve more fully unpacked the primary incentives of businesses, we can return to a phrase like “the customer is always right” and figure out what it actually means.
As I’ve already written, it doesn’t mean “the customer should get whatever the customer wants” because, for businesses, that strategy doesn’t make financial sense. Instead, a better way of translating the phrase is: “Engage with customers in ways that make them most comfortable.”
I realize “engage with customers in ways that make them most comfortable” isn’t as catchy a phrase as “the customer is always right,” nor is it as appealing to consumers since it doesn’t mean they get whatever they want, but it makes better business sense.
Engaging customers in ways they’re comfortable with is a strategy that understands the fundamental challenge of customer acquisition: people are creatures of habit. This habit-forming nature of consumers is at the heart of what businesses need to grapple with in order to attract and retain customers.
Specifically, to attract new customers, businesses have to convince people to change the habits they already have. For example, if I’m opening a new Mexican restaurant, I need to attract people to eat at it by convincing them not to go to their current favorite Mexican restaurants. I might accomplish that with a coupon.
Once I’ve convinced people to change their habits enough to try my product or service, I need to keep them as a customer by helping them build new habits that involve buying from me. I’ll do this by trying to make them as comfortable as possible with my company. For example, returning, again, to my hypothetical Mexican restaurant, I might try to make people comfortable by agreeing to accept expired coupons.
Or I might not. I might decide the cost of making certain people comfortable (like my mom and her ridiculous coupon requests) outweighs the benefits I’ll obtain, at which point, I’ll tell them they’re wrong, and I’ll accept that doing so might cost me a customer.
“That’s where you’re at with this customer who’s making such absurd demands,” I told the entrepreneur I was meeting with once I finished talking about my mom and how some restaurants and stores simply refused to accept her extreme coupon requests. “Yes, your customer’s money is nice, but if getting his money is forcing you to completely change your business, then his money isn’t worth it.”
“Nobody ever talks about customers like that,” the entrepreneur replied. “Everyone just seems to talk about customers like they’re sacred. You’re supposed to do everything you can to get them, and, once you have them, you’re supposed to do everything you can to keep them. But, now that you’ve pointed all this out, I can see how bending over backwards for customers is actually a problem. The customer can’t always be right.”
It’s true — the customer isn’t always right. However, I’m also a realist, and I understand that this article isn’t going to change 100+ years of errant interpretation. So, rather than trying to convince anyone that the customer isn’t always right, I’ll tell you this instead:
Don’t be afraid to say “no” to customers who don’t create more value than they cost. Yes, the customer is always right, but that doesn’t mean every customer is the right customer for you and your business.
