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Customers Are Not Always Right…

October 24, 2012 | Terri Mitchell AKA The Profit Frog

It’s a fact, and you’ll agree – your customers are not always right. They’ll dispute a price, or they’ll try to find a damaged product – or damage one instead – in order to claim a discount. Or, they’ll try to claim that your competitor has the exact same product for a cheaper price, yet rarely do they have evidence to support their arguments.

How you handle their ‘righteousness’ is up to you. But one thing is for sure; before you placate the customer and make “rash” decisions to keep the customer happy, stop and consider their inherent value, the customer’s true worth or lifetime spend value to ensure your solution doesn’t cost you, financially or otherwise.

It’s nigh on impossible to know how much a customer will spend with your business at any given moment in time. So, if a customer seems set on quarreling over your prices or service, make sure your customer service staff know your customer-relationship policies and consider the following factors:

1. Saying ‘No’ over low margin items.
   Are they bringing an ‘el-cheapo’ product to your register claiming a fault or price issue just to get a discount? Or is the product of a significant price? You may decide that keeping a customer happy for a low-margin sale doesn’t add up. It may make better sense to ensure the customer is ‘right’ on the bigger ticket items.
2. Is this person your ‘ideal’ customer, or one that doesn’t fit the mold no matter what?
   Knowing your ‘ideal customer’ helps when it comes to managing the relationships you form with them because you’ll know who to invest more time with, allowing some ‘customer righteousness’ for those you’ll be targeting as your perfect customer.
3. Could the ‘relationship-reach’ of the customer be important?
   Irrespective of the previous two factors, does this customer have a lot of connections that are likely to spend a lot, or be your ideal customers? If so, then you might want to humour this particular customer’s rightful claims in order to snare the potential word of mouth exposure to their connections.
4. Is the reputation of the customer one you want to risk associating with?
   You can’t be expected to know a customer’s reputation. However, there are some with more public notoriety than others. If they seek discounts or try to argue with you over your pricing or product range consider if this is a customer you want to associate with. Your willingness to keep these disreputable customers happy by making them right may besmirch your own hard-won business reputation. Conversely if your customer is something of a media personality or positively known in the community, tread carefully – if they claim to be right, be sure to properly evaluate the pros and cons of keeping them happy. That’s because it’s great to be associated with a popular or celebrity customer; customers like to be associated with celebrities, shopping where they shop – and if it is in your store, that could be a great outcome.

In essence, you and your customer service staff need to know how to say ‘no’, and how to hold firm in the face of any ill-intended or discount-seeking practices of customers, and when to let the customer know they really are wrong. By taking this stance, you’ll soon develop a reputation for being firm but fair as a business person who does not take any BS when establishing customer relationships. This in turn will lead to trust and respect, and these are precious in any business world.

Have you ever had a customer who tried to snake a discount out of your business? How did you handle it? Share your story below.