Six Pixels of Separation - The Blog
October 25, 2011 8:50 AM

The Customer Is (Not) Always Right

There's an ongoing business axiom that defines customer service: "the customer is always right."

Publicly, this may be the proper posture. People like Tony Hsieh (CEO of Zappos and the author of the best-selling business book, Delivering Happiness) built his first business on making customers happy (the company was LinkExchange - which he sold to Microsoft for $265 million) and pushed the concept even further with Zappos (the online shoe store), which was also sold (but this time to Amazon was over one billion dollars). That being said, there are instances when the customer is not always right. In fact, let's be honest: sometimes the expectations of consumers is so far beyond the pale that anything the company does to try to please them will be met with grumbles and complaints.

The majority of customers simply want value.

They want their products or services to do what it says it will do - reliably. In this day and age, the challenge is that brands are being held to task in the online channels. Any individuals can complain in text, images, audio and video, instantly and for free online for the world to see. If you're in line at your favorite retailer and you're wondering why they don't open up a second cash register, you're just a tweet away from holding that company responsible for their store policies. The other day, I was reviewing the Facebook page for a major airline and there was one complaint that stood out: "I'll never fly with you again! I was stuck at the security line for over two hours!" What does security have to do with the airline? (Answer: nothing). Have you ever been on TripAdvisor (the popular online destination that rates hotels)? You'll see a constant stream of one and two-star reviews where individuals complain about things like a lack of chocolate on their pillows or not enough channels available on their TV (while at the same time commending the hotel for having a nice staff, clean rooms and a cheap rate - the main reasons the majority of people would chose a hotel).

Are we quickly devolving to the sad state of: "you can only please a few of the people some of the time"?

The evolution of customer service and brand loyalty is a topic that has captured the imagination of Fred Reichheld for over twenty years. In 1996, the Bain Fellow published his first book, The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value. Recently, Reichheld (along with co-author, Rob Markey) published a newly updated version of his 2006 seminal book, The Ultimate Question (now titled, The Ultimate Question 2.0). So, just what is the ultimate question that every business should be asking...

"How likely is it that you would recommend this company to a friend or colleague?"

If your company is doing well (and this doesn't mean you have to be perfect), your customers become your brand champions. They become the evangelists. They become the marketers. They are the ones who get your ideas to spread. "It turns out that people won't enthusiastically recommend your business to a loved one unless you have treated them in a very special way," says Reichheld via Skype. "It goes beyond the brand and loyalty. Social Media has made the model more apparent to businesses, but the roots of this concept go all the way back to the bible. It goes back to the idea that a name and a reputation are worth more than silver and gold. We created the Net Promoter Score system around the ultimate question to help businesses know - day by day - whether they are building their reputation or diminishing it."

Big or great?

While the simple and immediate feedback loop of deploying the Net Promoter Score (a system that allows customers to grade a brand on a scale from one to ten with a few, short questions) has been adopted by many businesses, the final results also empower a brand to think differently about the types of customers that they can be successful with. "There is no brand that is right for everyone," continues Reichheld. "A brand should be working very hard to make sure that the people who are buying their product or service are the people who it was intended to be sold to. They need to have a very clear focus. This means that when they get a Net Promoter Score of a nine or a ten from a customer, it's because they picked the right customer and they are appreciated for what they have to offer. Sadly, what we see historically is metrics around 'bigness,' meaning how many customers or how many units sold? What we should be looking at is a metric around greatness, not bigness."

So, is the customer always right?

"I don't think that the customer is always right any more than I think that the employees are always right or that a shareholder is always right," conceded Reichheld. "You do owe it to your business to understand the root cause of the feedback and what implications it has on your decision making, prioritization and your actions. But, there are criminals out there that are your customers. You want to keep those customers away. Not just from your cash registers but from your employees too, because they are abusive and they make life hell for everyone in your business. The Net Promoter Score is based on the golden rule that we should treat others the way we would want to be treated in their shoes, but it takes a lot of deep thinking to do this right. It's not superficial. Think about what actions a business takes when it gets a zero or a one score? The business should dig in to figure out what's wrong, try to fix it and understand how it feels to be in the customer's shoes, but it doesn't always mean that they are the right customers for your business."

The complete audio conversation between Reichheld and myself will be published this coming Sunday (October 30th, 2011) as episode #277 of Six Pixels of Separation - The Twist Image Podcast.

The above post is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business - Six Pixels of Separation. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original versions online here:

By Mitch Joel