Customers are always in the right

There is an old adage in business that the customer is always right and it is particularly prevalent in retail. Many a successful burger chain was built on the foundations of this mantra.

The true test of any retailer is how complaints are received and managed. Far from being a negative event these are an opportunity to learn and to improve service.

This week I encountered a local business where a product we had purchased was not up to standard and when the message was delivered they handled it in exactly the right way. A credit was given to us as compensation and the business owner explained the cause of the substandard product. It was also interesting in that we purchased two items at the same time and the other one was outstandingly good. So to that particular retailer, thank you and well handled.

On the other hand, what do you do if the customer is wrong when a complaint is lodged? This will happen sometimes and may be due to a misunderstanding leading to an expectation gap or, alternately, said customer might be 'taking the Micky'.

An expectation gap generally arises from an impediment to communication between a supplier and a customer or where the product does not match up to what was anticipated. It is incumbent on those selling the goods to explain clearly what is being purchased.

If a customer has the wrong end of the stick, many theorists espouse that you allow them leave thinking they were right all along. The rationale being is that they will be back for more later. What this doesn't consider, however, is the time and effort that is invested in dealing with a customer who just doesn't understand. In many cases it may be more beneficial for you to politely direct them to your opposition!

It is important to understand the real cost of doing business with particular customers. Sometimes, the level of work required to secure a sale and keep them happy is a cost which exceeds the benefit of their return.

I have heard stories of businesses being rorted by customers using complaints to eke out more than they have paid for . A great example of this was cited on National Radio recently where a pair was arrested in the Coromandel extracting refunds from restaurants for fake bouts of food poisoning. A clever, but illegal, ploy.

The key, like it is with many things, is finding a balance and it will always be a positive if your business becomes renowned for going the extra mile. My advice is not to get caught in situations where your investment in the sale exceeds the margin returned to you.

To close, thank you for all the feedback on last week's article. It seems that there is a groundswell starting of people who want to see more positive reporting of our city.

Zenith Solutions is a Wanganui-based management consulting practice. It specialises in providing strategic planning, business process improvement and financial management services. Contact russell@manageable.co.nz or phone 021-244-2421.