Is the Customer Always Right? How It Impacts Business Model, Employee Relations, and Customer Satisfaction

Customers are always right, right?

But when and why did this rise, and what are its implications?

The phrase 'the customer is always right' is attributed to retailers Harry Gordon Selfridge and Marshall Field, who popularized it in the early 20th century.

The concept aimed to prioritize customer satisfaction to increase sales and patronage.

Back then, it was a strategy to set businesses apart during an era where customer service was becoming a competitive advantage.

Customer Retention and Loyalty:

Despite its controversial nature, the 'customer is always right' model is still utilized due to its potential to instill customer satisfaction and loyalty.

Businesses emphasize the value of customers feeling heard and important, as it can lead to repeat business and positive word-of-mouth.

Moreover, in the age of social media, a satisfied customer can serve as a powerful brand evangelist, effectively boosting the company's image and sales.

Employee Relations and Business Repercussions:

However, the implementation of this model has its drawbacks.

When faced with unreasonable or abusive customer complaints, companies often opt to side with the customer to maintain their business's reputation.

This can result in employee dissatisfaction, reduced morale, and higher turnover rates.

Additionally, succumbing to the demands of unreasonable customers can lead to a loss of revenue, as well as setting precedents for future behavior.

Impact on Resources and Operations:

From a practical standpoint, maintaining the 'customer is always right' philosophy can have costly repercussions.

It often takes more time, energy, and resources to hire, train, and replace employees than to address and potentially ban problematic customers.

Moreover, accommodations made for unreasonable customers, such as free items or discounts, can lead to financial losses and perpetuate a cycle of entitlement and poor behavior.

Ethical Dilemmas and Alternatives:

Confronted with the complexities of this model, businesses are starting to question entrenched philosophies and explore alternatives that balance customer satisfaction with employee well-being and operational efficiency.

Some companies are adopting a 'no BS' policy, advocating for respectful, fair treatment of both customers and employees, and swiftly addressing unreasonable behavior.

Moving Forward:

In today's competitive landscape, businesses face the challenge of adapting to shifting consumer expectations and demands, while also prioritizing employee well-being and operational efficiency.

Reconciling these priorities necessitates a nuanced approach that goes beyond the black-and-white proclamation that 'the customer is always right.'