Is The Customer Always Right?
I am pretty sure I have listened to and read at least 2,000 to
3,000 books and videos on selling, how to sell and customer
service and one theme that I have found has been - The Customer
Is Always Right?
This is the biggest load of rubbish I have ever heard. If you
take on this philosophy, from my experience, you will go broke
let me explain ...
One of the most common stories I hear bandied around the
customer service industry, is the case of a Manager at Wal-Mart
who had an irate customer who had bought a set of tires and
wasn't happy with them. She went to Wal-Mart and abused the
manager and told him the tires were no good and the Manager gave
her a full refund. The point to this example was that Wal-Mart
didn't sell tyres and the manager went above and beyond the call
of duty and gave her a full refund. But as far as I am
concerned, he didn't do the right thing, he should have politely
informed the customer they didn't sell tyres. Could you honestly
imagine giving a refund for a product in which you didn't sell.
As a small business owner, you would go broke but...
So, many of the customer service guru's use that story as the
shining light in the way that we should be serving our
customers. To me, that's crazy to be pushing such a philosophy.
I wrote this article because I felt it was important as a small
business owner to share with you a few things I have learnt
about balancing the needs of the customer to the needs of your
business as a small business owner. But also, as a small
business owner that believed in the philosophy of the Customer
Is Always Right and how it almost sent me broke.
For years, I have been in small business and I had bent over
backwards to accommodate my customers and I still do, but what I
realised about 6 months ago, is that by not setting clear
guidelines on how I was prepared to do business but also
sticking to those guidelines, my business in the end was being
dictated to by other companies. My company has done a lot of
work with Government agencies and big business and many people
who work in these organisations think they are high flyers and
can railroad small business and many of them do.
When I started picking up work from some of these organisations,
I would get a call saying, we want your training but this is how
we are going to do business. We only buy services on purchase
orders and that's the only way we do business and we will pay
you in 30 days or on the cheque cycle run (which might be 90
days). If you want our business you either accept our terms or
we will go somewhere else.
Now as a small business owner and somebody who wants to grow
their business, you think, excellent, okay, yes sir, no sir, we
accept your terms. Then you do a fantastic job, on time, within
budget, then it comes down to payment. On some of our work we
had to wait six months to be paid. Now like most small
businesses we work on credit and being so small we rely heavily
on credit cards. But its this reliance that almost destroyed my
business. We found that because some of our large clients didn't
pay us for six months, the interest from the credit card
payments actually cost us more than the business in the first
place.
One of the government agencies I worked for had a policy of
putting 10 people on a purchase order for training, but their
policy was that you didn't get paid for any of the training
until everybody on that purchase order had completed the
training. In this particular case we had 2 people over a 12
month period change their course dates at least four times and
in the end one person cancelled altogether. Now the training
manager of this government agency had the audacity to tell me
that they didn't have to pay for any of the training because
they hadn't finished the training. In the end, I realised for
the first time, why many of my larger competitors ended up going
broke. They simply weren't getting paid and being railroaded. It
was at this point I realised one important lesson, the Customer
Is Not Always Right!
I will say one thing, when you get to the point where you are
about to lose everything, your perspective changes and I think
personally its incredibly liberating. I decided it was time to
act and I learnt a very important lesson. This is my business
and I decide how I want to do business! Not my customers!
In the end, I wrote to everyone of the customers who owed me
money (we are talking tens of thousands of dollars) and I was
quite blunt to them and I said, your failure to pay has damaged
my business. The terms you wish to do business on are no longer
acceptable and as such we no longer are prepared to accept your
business. Pay now or else and then I set out the rules of how I
was going to do business.
I figured in the end I would lose all of my big customers but it
really didn't matter they weren't making me money, in fact they
were losing me money in a big way because of the interest owed
on my credit cards. So I didn't care. You know the funny thing,
I never lost a single customer and now every single business
pays upfront and with a credit card. It wasn't until I put my
terms on that table that things changed. In reality, I should
never have accepted their terms but I guess hindsight is a good
thing.
I did come to a really important realisation; I would rather
have a small business that makes a profit, than all the business
in the world but not make a single cent. If you are in business
or thinking about going into business let me share my strategies
I now use for surviving my customers ...
1. I set the rules on how I want to do business not my customer
2. Set very clear rules on how a customer must pay for your
services or products 3. If the customer doesn't pay cash up
front (this includes credit cards), require them to give you
authority to debit their bank account. 4. Be wary of any
business that only buys using purchase orders only (Very few
companies do this, many of them have credit cards so tell them
you only accept payment by credit cards) 5. Don't be frightened
to say No 6. Don't be frightened to say to a potential
Customers, "I am sorry, but your not the sort of customer I am
looking for" 7. Don't be bullied into doing any product or
service. Do only what you can handle and want to do. 8. Be
Assertive and Stand Firm on your decisions 9. Be upfront to a
customer if they are hurting your business 10. Always treat the
customer fairly and equitably
The world is a big place, there is lots of business out there
for you to go after, no customer is that important that they
should be in a position to bankrupt you.
I keep getting told by my business mentor that business is
supposed to be fun. I think it should be too, but its only fun
if you have the money to enjoy it.