There’s an old adage in business that says: The customer is always right.
After dealing with thousands of customers over the last two decades, both online and off, I believe it would be more accurate to say that the customer is always right — until they are not.
It all comes down to what I call, “The law of reasonable expectation” or simply, Knox’s Law.
What? You thought only Murphy could have a law?
Murphy’s Law states, “Anything that can wrong, will go wrong“.
Knox’s Law states, “If you meet a customer’s reasonable expectations, they should walk away happy“.
If you combine Knox and Murphy’s Law you get, “When it comes to customers, anything that can go wrong probably will because customers often demand more than they’re entitled to“.
Here’s the basis for Knox’s Law: if you, the product seller or service provider, are willing to take a customer’s money in exchange for providing said customer with goods or services, then said customer has what I call “the right of reasonable expectation”.
This means that the customer has the right to expect you to deliver what’s promised – exactly as promised – in exchange for their hard earned money.
And you have the right to expect proper payment in exchange for what’s delivered, nothing more, nothing less.
- If you own a restaurant, the customer has the right to expect that their meal will be prepared and served to their satisfaction.
- If you are a dry cleaner the customer has the right to expect that you will launder their clothes without returning them in shreds.
- If you are hired to perform a service the customer has the right to expect that the service will be provided to their satisfaction within the terms of the defined task.
As the business owner, it is your responsibility to meet the customer’s expectations and provide good customer service.
Even if your business does not involve a formal contract that spells out to the letter what should be expected, there is generally a clear understanding of what the customer should expect and what you are willing to deliver.
If you fail to deliver on your end of the bargain, let’s say by serving a bad meal or losing a customer’s laundry, then you are guilty of not meeting the reasonable expectations of your customer and thereby guilty of providing bad customer service.
Now let’s look at the flip side of Knox’s Law.
Just as the customer has the right to expect that he will get his money’s worth when doing business with you, you have the right to expect that your customer will not make demands that are beyond the scope of realistic expectations.
- If a customer orders hamburger, he shouldn’t expect it to taste like steak.
- If a customer brings you a cotton shirt to launder he should not expect a silk shirt in return.
- If a customer hires you to mow his lawn he should not expect you to trim the hedges and clean out the gutters.
It’s when the customer’s expectations go beyond what’s promised or what should be realistically expected that you will start to have problems.
We have all had customers who expected far more than was their due: customers who were unreasonable, overly-demanding, condescending, hard to please and sometimes even dishonest in their dealings with you.
When a customer’s reasonable expectations become unreasonable demands, you must decide whether or not that customer is doing more harm to your business than good.
So here is the line in the sand between the “customer is always right” and “sometimes it’s better to give a customer the boot” – if a customer crosses the line from being an asset to being a detriment to your business, you should consider giving that customer the boot, i.e. no longer do business with them.
This is easier said than done if that customer constitutes a large chunk of your revenue, but even then you have to consider what your business might be like if that problem customer was not in the picture.
- Would the time you spend dealing with the problem customer be better spent on sales calls that might expand your client base and grow your business (a business that is dependent on one client is a house of cards)?
- Would your employees be happier not having to deal with this customer?
- Would you sleep better nights knowing that you don’t have a dozen phone messages from him on your desk every morning?
The easiest way to decide how much trouble a customer is worth is to look at the amount of revenue this customer brings in versus the time and expense of meeting his unreasonable expectations.
If this customer pays you $1,000 a month, but costs you $2,000 in time spent trying to keep them happy, this customer is actually costing you money.
Just a handful of these kinds of customers will put you out of business fast.
I once had a client whose business was worth several thousand dollars a month to my software company’s bottom line.
However, this client proved to be problematic from the second the contract was signed.
He and his employees called our office ten times a day and dominated my tech support team’s time with problems that were not even related to the service we were contracted to provide.
It got so bad that my employees cringed every time the phone rang because they were afraid it was this client calling again.
When the time came to renew this client’s contract it wasn’t hard for me to decide to give him the boot. I simply did the math.
This client had added thousands of dollars to my company’s bottom line, but had cost me at least that much in hand-holding and support, not to mention the mental anguish he caused my employees.
I opted not to renew the contract and politely invited the client to take his business elsewhere.
The perfect customer relationship is win/win, meaning that your customer benefits from your product or service and your company prospers by delivering the product or service.
The relationship must be built on mutual respect and honest intention.
It is when the relationship becomes win/lose that you must be ready to take action.
If the customer thinks he can hold you over a barrel and get more out of you than he has paid for, the relationship and your business suffer for it.
Look, you don’t need me to hit you in the head with a stupid stick on this one.
You know who your problem customers are and you know that you will eventually have to deal with them.
You have to consider the value of every customer in the long run, not just their value today.
- Is the customer making demands that are beyond the scope of what should be reasonably expected?
- Is the customer demanding more than they are entitled to and do they get angry when you refuse to comply?
- Is the customer taking advantage of your good graces?
- Is the customer threatening to “ruin your reputation” if you don’t give them what they want?
Be nice, but don’t be a doormat.
Some customers may mistake your willingness to please for weakness, and try to wring more out of your relationship than they should.
If the customer has a record of trying to take advantage of you and plays every angle to get more from you than they deserve, consider giving them the boot.
Is this customer threatening your reputation?
Thanks to the internet age it’s never been easier for a disgruntled customer to slam your reputation, but you can’t let that fact drive your decision to keep doing business with a problem customer.
If you suspect a customer might be the sort to one day air dirty laundry in public, consider giving them the boot.
If you have the chance to explain your side of the issue (as in responding to a BBB report) do so professionally and thoroughly, if not take the hit and move on.
Don’t live in fear. It’s just not worth it.
Does the customer pay in a timely manner?
If you have a customer that is consistently 90 to 120 days late in paying even when your contract clearly outlines your payment terms to be otherwise, it may be indicative of other problems to come.
If you feel the client is a payment risk, consider giving them the boot.
What’s the best way to avoid a customer booting?
The best answer is to have a contract that clearly spells out the specifics of the relationship.
The contracts I use in my various businesses clearly define the services to be provided, the cost of those services, and the timeline and terms under which those services will be rendered.
If there is a deviation from the contract, we write an addendum that details any changes and their effect on the contract.
Do I still have to give some customers the boot?
You bet, but not very often.
It’s hard for a customer to cry foul when everything is there in black and white right above his signature.
What if your business doesn’t use contracts?
You’re not going to ask a customer to sign a contract to buy a t-shirt or a cup of coffee, but Knox’s Law still applies.
There is a reasonable expectation between the parties given the specific situation.
- When I pay Starbucks $5 for a cup of coffee, I expect it to be fresh and hot.
- When I pay Sports Authority $100 for a pair of running shoes, I expect them to fit properly, be comfortable, and last more than a week.
- When I pay $50 for a steak I expect it to taste amazing and melt in my mouth, not be as chewy as an old running shoe.
You get the idea.
The entrepreneur and the customer both have promises to keep and expectations to meet.
As the entrepreneur it’s up to you to deliver exactly what’s promised (a piping hot, fresh cup of Joe versus a cold cup of mud)
And the customer should not unrealistically expect you to include a cinnamon bun for free.
After saying all that, let me end with this: don’t ignore a customer’s compliant just because you think they’re being unreasonable.
When a customer complains, whether that compliant is valid or not, it should be a red flag to you that something may be wrong in your process.
- Is your offer not clear?
- Are your sales people not fully trained or making promises they shouldn’t make just to close a sale (been there, done that)
- Is your marketing attracting the wrong type of client
- Is there a breakdown in customer service? Remember, customer service doesn’t end when you take the money. You should focus on providing superior customer service before, during, and after the sale if you want to build repeat business.
If you find there is an issue on your end, correct it quickly, apologize to the customer, and get back to work.
Here’s to your success!