Dethroning “The Customer is King”

by in Marketing

pexels-photo-59197-largeEvery sales person has heard – and probably recited – the age-old sales mantra, “the customer is king,” or its common variant, “the customer is always right.”

Although these sayings underscore the importance of the customer and are regurgitated with the intent to motivate sales people to prioritize customer service, they shouldn’t be taken at face value. Sales people should exercise caution before immediately bowing down to the customer. They should feel empowered to use judgment to assess how “right” the customer should really be. There are times when power ought to be usurped from the customer.

Of the most obvious pitfalls of strict adherence to a “customer is always king” mentality is that doing so takes a toll on resources. Catering to customers’ every need, request, and complaint is not in a sales person’s best interest. If you can’t realistically or efficiently satisfy a customer, you should move on. Nagging, unsatisfied customers who are “blowing smoke” can be impossible to please and can easily soak up time and resources. It can take twelve positive experiences to recoup from one unresolved negative one. Sales reps should use their best judgement to determine when it’s time to abandon efforts aimed at pleasing a customer and focus on more productive pursuits such as catering to more satisfied customers. After all, satisfied customers reportedly spend an average of 140% more as compared to their disgruntled counterparts.

Another less obvious offshoot of a “customer is king” mindset is the degradation of employee satisfaction. There are times when customer demands verge on ludicrousness (for example, when a customer demands countless bells and whistles, steep discounts, or full refunds). It’s mentally taxing to cater to a customer’s every need and desire, especially when they are ill-founded. Doing so leads to declines in employee satisfaction and, ultimately, performance. If a customer is abusive, unrealistic, or too demanding, research suggests that employees should shy away from catering to them. Homburg (2011) found that the relationship between customer orientation (i.e., a “customer is king” mentality) and sales performance is curvilinear, according to an inverted U-shape. That is, customer orientation is associated with increased sales performance only up to a certain threshold. Too strong a bias towards customer orientation (such that sales people feel victimized or unnecessarily expended) leads to performance declines.

Best-in-class sales organizations put their sales people first by empowering them to determine appropriate levels of customer orientation. Not only does this lead to heightened employee satisfaction levels, it can also benefit an organization’s bottom line. Multiple studies have found corporate culture and employee satisfaction levels to be predictive of organizational performance.

The pitfalls of “a customer is king” mindset can be even more epidemic such that they infect product innovation. When all customer complaints, demands, and feedback are considered “right,” product development will likely be ill-informed. On the other hand, when sales people entertain the possibility that customers could be wrong, they are able to “push back” and assess whether the customer is justifiable. Recurring complaints and requests that are well founded can then be communicated to product development teams to optimally inform product advancements and iterations. Phil Libin, CEO of Evernote, loves his angriest customers because they offer insight that can inform future development of the product. Though not necessarily intuitive, angry and/or dissatisfied customers can offer the most informative feedback to advance product development. Don’t shun opportunities to learn from dissatisfied customers by immediately appeasing them.  Indeed, these opportunities are few and far between: an organization typically hears from only 4% of its dissatisfied customers.

It can be challenging for sales professionals to pinpoint the level of customer orientation that is optimal for each particular customer encounter. Fortunately, there are some informative guidelines. Specifically, when assessing how “right” the customer should be, sales people should first consider three factors related to the product or service they are tasked to sell: degree of standardization, price, and competitive positioning. Homburg (2011) found that higher levels of customer orientation are optimal for sales people selling individualized products, for firms pursuing a premium price strategy, and in markets with a high degree of competitive intensity. When products are more individualized and prices more premium, sales people can afford to devote more time to satisfying each customer because each individual customer has a larger relative effect on a firm’s bottom line. As well, when environments are more competitive, a higher level of customer orientation can prove an important differentiator in enhancing customer service quality.

A commonly recounted story in the world of sales involves a man who took advantage of Nordstrom’s “no questions asked” return policy to successful return a set of tires, unfazed by the reality that the upscale retailer doesn’t even sell tires. While we’re certainly living in the era of the empowered customer, we shouldn’t allow sales person to be treated as second-class citizens. It’s time we change tradition – from “the customer is king” to “the profitable customer is king.” There are situation when the customer should be dethroned and the sales people should don the crown.

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About The Author

Rebecca Hinds
Rebecca Hinds - View more articles

Rebecca Hinds graduated from Stanford University in 2014 with a M.S. in Management Science and Engineering. In 2013, Rebecca co-founded Stratio, a semi-conductor company developing infrared sensors. The company was selected by the Kairos Society as one of the 50 most innovative student-run businesses in the world.