The phrase “The customer is always right” was originally coined in 1909 by Harry Gordon Selfridge, the founder of Selfridge’s department store in London.
Typically the phrase is used in business to convince employees to give good service.
The problem is, following this advice can ironically lead to worse customer service and if you are attracting poor quality enquiries, that is a recipe for disaster…
Recently Greg, one of our Certified Professional Builders experienced a problem client while they were still in the Prelim stage for a $2.7m contract.
Every second week the receptionist was fielding calls from the client who was known internally as ‘Mr Angry’.
He didn’t like the fact that the company sent information by email instead of by post, didn't like the fact the estimate wasn’t broken down into costs by item, didn’t like the soil classification, didn’t want to pay extra to upgrade the bath to a spa, he didn’t like the rock clause in the contract and the fact that a builder’s margin would be added to variations.
In his phone call, he didn’t accept the amount of time allowed for construction in the building contract and demanded it be reduced by 8 weeks.
The salesperson asked Greg, the company owner, to intervene directly and compromise to show goodwill.
Greg picked up the contract and tossed it in the bin and said, "We don’t need this contract."
Greg is a straight talking builder who started out as an apprentice carpenter before becoming a builder and specialising in high-end, architecturally designed, custom built homes.
He wanted to make sure that both clients and employees enjoyed the building experience, so he made it very clear that the maxim 'the customer is always right' didn’t hold any weight in his building company.
Here’s what he said:
When we run into clients that we can’t reel back in, our loyalty is with our employees. They have to put up with this stuff everyday.
Just because you sign a contract with us does not give you the right to abuse our staff…
Every year we complete between 12 and 20 homes for very successful and demanding clients who are used to getting their own way in life.
As a consequence, every couple of years we’ll end up with a client who is a completely unreasonable and demanding too. When it’s a choice between supporting your employees, who work with you every day and deliver some of the finest homes in the state, or some narcissist who screams insults at your supervisor, whose side are you going to be on?
You can’t take your employees for granted. You have to value them. If they think that you won’t support them when a customer is out of line, morale will drop and so will the quality.
So Greg trusted his team over abusive customers.
What’s good about this attitude is that it balances employees and customers. The 'always right' maxim squarely favours the customer which is a bad idea, because, as Greg says, it demoralises the team.
Declaring “The customer is always right,” in your building company sends a clear signal that abusive clients must be tolerated and can demand just about anything — because by definition they’re always right.
This makes the employees’ jobs that much harder when trying to pull them in.
Also, it means that abusive clients get way better treatment and better deals than decent people.
That’s mad. If you want to attract more of the decent clients, they are ones to be focused on and kept happy as they are far more likely to become promoters at the end of the contract.
Some clients are bad for business.
Most builders think that “they need to take every job they can.” But some clients are quite simply bad for your business.
It’s the 80/20 principle. Twenty percent of your clients will consume 80% of your available time. Which means that you are only able to provide the vast majority of your clients with 20% of your time. How many opportunities are you missing to improve your margin on those jobs because Mr Angry is demanding all of your time, while refusing to pay for any variations?
It’s not a question of how much you could have made from that single contract, it’s the opportunity cost to your building company when your time is consumed by one lousy client.
And when you put your trust in your team and back them over your clients, they will put your customers first.
When they feel valued they will:
- Care more about other people, including clients
- Have more energy
- Be more motivated.
On the other hand, when you consistently side with clients instead of team members, it sends a clear message that:
- Employees are not valued
- Treating employees fairly is not important
- Employees have no right to respect from clients
- Employees have to put up with everything from clients
When this happens, employees stop caring about service. And at that point, a good client experience is almost impossible.
Greg made it clear that his team came first. Even if it meant turning down a $2.7m contract that he’d been working on for 18 months.
At a recent event he told other builders:
“We don’t take on problem clients. We deliberately sign up more preliminary agreements than we can take on contracts because it gives us options.
And if I don’t think we’ll be a good fit I tell them, 'you’ll need to find another builder, we’re booked out for 18 months'."
A good way to avoid taking on problem clients is by qualifying them hard at the start of the sales process.
If you don’t already have a Qualifying Checklist for your new enquiries, then download our proven and tested Qualifying Checklist for builders here.