In This Episode

No offense to Marshall Field, the retailer who is often credited with creating the slogan “The customer is always right,” but give me a break.  Following this piece of advice has probably put more small businesses out of business than anything else.  We have seen way too many small business owners justify keeping bad customers by quoting this phrase.

Part of our goal with this podcast is to help dispel some common myths about small business.  This one about the customer always being right is definitely in our top 10 of common myths.  Now, we aren’t saying to ignore the customer, because it’s important to listen to your customer.  But to give them the final say on everything?  What’s that say to your employees?  Customers are more important than you?

Does this mean you should continue to lose money with a customer or take their abuse?  Or in today’s 24/7 world that you need to respond to them at a moment’s notice?  Good luck with that!

So how do you know if you might have fallen prey to this terrible myth?  Here are some things to ponder:

  • Losing Money: this might seem like a simple one, but if you’re losing money with a customer, chances are they aren’t right.  Or if they don’t see it that way, then let one of your competitors lose money on them instead.  You might be amazed what happens if you truly understand your profitability and how that will embolden you to dig your heels in and push back to make sure you can make money with a customer.  You have rights as the business owner!
  • Abusive: again, to the outside observer this might seem like an easy one.  Why would a business owner subject themselves or their team to customers who are verbally or otherwise abusive?  One of the innate challenges with any small business owner is that we’re wired to say yes to service anyone who wants to purchase our products or services.  Especially if that customer is large in terms of sales to our business.  But you have to draw the line somewhere otherwise you’ll lose all your good people and all you’ll be left with is bad customers.
  • Overly Demanding: have you every heard of the pain-in-the-butt premium?  It’s when you increase the price or your product or service to a customer who is really a pain in the butt.  Many customers believe that you’ll live by the moniker that they are always right so they’ll tend to push the envelope and be demanding of your time or additional products or services.
  • Slow Pay: ever have a customer drag out payments?  Give you some story about how they’re waiting on payment from someone else or deflect in some other way?  They’re hoping you won’t push back to hard because you don’t want to lose the business.  We’ve seen way to many small business owners who turn into banks for their customers where they carry $100,000+ in accounts receivable with these customers who wind up paying slowly or sometimes never at all.

During the show today we shared several stories of our clients who decided to fire customers who were wrong for a variety of reasons.  Many of these resulted in those customers coming back later on because they realized our small business owners were right!

People, Companies and Resources We Mentioned in the Show