The phrase "the customer is always right" is a slogan that was popularized by retailers Marshall Field and Harry Gordon Selfridge in the early 20th century. César Ritz—a Swiss hotelier whose name the word "ritzy" is derived from—popularized a similar phrase, "the customer is never wrong." The problem with these phrases is that sometimes the customer IS wrong. Many workers, especially in retail, are encouraged to have the mindset that the customer is always right, which often leads to all kinds of issues.
It gives abrasive customers an unfair advantage
Using the slogan “The customer is always right” abusive customers can demand just about anything – they’re right by definition, aren’t they? This makes the employees’ job that much harder, when trying to rein them in. Also, it means that abusive people get better treatment and conditions than nice people. That is just asinine, and it makes much more sense to be nice to the nice customers to keep THEM coming back.
Some customers are bad for business
Most businesses think that “the more customers the better”. But some customers are quite simply bad for business. Danish IT service provider ServiceGruppen proudly tell this story:
“One of our service technicians arrived at a customer’s site for a maintenance task, and to his great shock was treated very rudely by the customer. When he’d finished the task and returned to the office, he told management about his experience. They promptly cancelled the customer’s contract.”
Note that it was not a matter of financial calculation – not a question of whether either company would make or lose money on that customer in the long run. It was a simple matter of respect and dignity and of treating their employees right.
It results in worse customer service
Simply put, when you put the employees first, they put the customers first. Put employees first, and they will be happy at work. Employees who are happy at work give better customer service because:
They care more about other people, including customers. They have more energy. They are happy, meaning they are more fun to talk to and interact with. They are more motivated
On the other hand, when the company and management consistently side with customers instead of with employees, it sends a clear message that:
Employees are not valued. That treating employees fairly is not important. That employees have no right to respect from customers. That employees have to put up with everything from customers
When this attitude prevails, employees stop caring about service. At that point, real good service is almost impossible – the best customers can hope for is fake good service. You know the kind: corteous on the surface only.
One of the consistent back up statements of The Customer is Always Right mindset is the amount of dollars it costs to replace a customer. Supposedly it costs more to replace a customer than to retain one most times. However, statistically speaking, this is just not true. It actually costs more to recruit, hire, and train a new employee than it does to replace a customer.