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Small Business Mistake…Letting the Customer Run Your Business.

Rick Barber

Rick Barber

In preparation for our Top 12 Business Mistakes Workshop, we realized we had to also address the many other business mistakes small businesses make that keep them from reaching their full potential, or fail all together.  Truth is that their are a very long list of specific mistakes that business owners typically make and bowing to the pressure of customers when it is unwarranted is one of the common we find.  Naturally we all know that without customers, a business would not exist.  Furthermore, in order to keep and maintain happy customers, a business must provided a product, service and experience that pleases customers and causes them to return and/or refer someone they know.  However, the rub comes when businesses are so committed to pleasing customers that they in essence let the customer run their business for them.

What I mean by this is that too many businesses make knee jerk reactions to every criticism or complaint that is made by someone that does business with them.  These knee jerk reactions often lead to compromises in good corporate policy, reduction in prices, incurring of additional costs and overall frustration among employees.  Ultimately, the end result is a business that attracts customers that take advantage of them and is unprofitable.  I know, I can hear it now, “But Rick, the customer is always right!  Isn’t that the mantra of a honorable and successful business?”.

Business Mistake

Customer is not always right…

My answer is a clear and resounding, “NO!”.  When I consult businesses and ask employees and owners that question from their personal perspective, and not from some ideological level, the answer is always the same as mine.  NO, the customer is not always right.  In fact, many times they are clearly wrong.  However, companies struggle to deal with the perception the customer has about the situation at hand that has them unhappy.  It is the perception that they are right, based on the information that they have and their memory of the sequence of events that took place, that cause businesses to default approach of “The Customer is Always Right”.  For many businesses, it is easier to put out the fire and allow the customer to win the battle vs. putting in place solutions that ensure the situation never arises in the first place.

This leads to me the disclaimer that I also give when I tell clients that their customers are not always right…and that is, they are also not always wrong either. Many times, the customer may have caused their own problem or frustration with a situation by not reviewing details of a transaction or by not listening to details given by employees.  However, at the same time, many businesses don’t have good policies and procedures in place for setting good expectations and outlining mutual responsibilities in a given transaction.  Nor is proper training normally given to team members to properly respond to customer arguments and criticism that resolve the issue without conceding to the customer’s demand and giving away the farm.

Businesses need to invest in common problems that arise in their industry and/or with their offerings and outline a strategy to deal with them ahead of time.  They should get with staff and review issues that have come up in the past and identify ways they could have been prevented and then put forth effort to ensure they are.  Ultimately, this will most likely require some additional investment of money and time as material will most likely have to be created, products and services improved, and training provided.  However, the short term cost will equate to longer term gain for the business.

In closing, like most problems facing small businesses, this problem is serious, avoidable and one that just about every business faces at some level.  However, it still is not one of the Top 12 Business Mistakes affecting owners today.   Stay tuned as we outline more common small business mistakes, and make plans to attend our signature Top 12 Business Mistakes Workshop to see how you can identify, fix or avoid the biggest mistakes facing businesses today.

 

 

Top 12 Business Mistakes Workshop Sponsors: Honza CPA, Massengill Schanfish PC

Massengill Schanfish PC

Massengill Schanfish PC

Honza CPA

Honza CPA

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