The customer is the customer. Adapt or die.

I’ve had a variety of sales jobs in my career and have dealt with some great people … and some world-class jerks. Not just difficult and demanding people, but unethical, bullying, liars at Fortune 100 companies.

One time, a powerful VP demanded that my company buy-back $1.2 million of our material due to a cosmetic issue that did not affect the performance of their end product. In fact, the defect would not even be visible to their consumer. It was a dicey situation. Yes, we were “out of specification,” but this was also going to be a painful financial hit for my company.  It was like being ticketed for going 56 miles per hour in a 55 mph zone.

In the end, we paid an $850,000 claim for the products that were made from the defective material.

I later found out this VP secretly sold the defective products to his customer any way, simply adding our claim payment to his bottom line (and annual bonus payment) through some accounting jujitsu.  My customer loved bragging about his cleverness to demonstrate the power he could wield over my company.

The dude was eventually fired for this type of behavior, but that did little to comfort me when I still had to work with him every day. And yet, I really had no choice but to take it or quit.  This guy was personally responsible for the acquisition of $1.5 billion of my company’s products — at that time, 10 percent of my employer’s total revenue!  I had a one-line job description: Don’t lose the account.

I knew that I would only be in the sales position for a few years at the most, so I decided to weather the storm and approach the challenge patiently and calmly, as long as my own ethics or any laws were not compromised.

I realized that the customer is NOT always right. But the customer is always the customer.  I was the one who had to adapt to survive and compete.

Fortunately, this is an extreme example but the point is, we can’t always demand that a customer — even a really bad one — change to conform to our needs and processes. Only we can change to adopt to the customer’s needs … or, if it gets too bad, quit.

Understanding this wisdom is difficult but a key to success in a fiercely competitive world.

This story came to mind because last week we had a debate on {grow} about the customer demands for rapid online service, even from hotels, restaurants, and other providers who are on the “value” end of the product line. This is an unfortunate development but they really only have one choice: Figure out how to adapt to the customer service needs AND maintain a low cost structure. They’re not going to be able to dictate customer expectations and still compete in the long term.

I’m currently working with a supplier that is imposing new processes that will take up more of my time and dramatically hurt my cash flow.  As a business partner, I want to cooperate and make the whole “system” better, but when I point out that their service levels are declining and the value of these new processes seems to be flowing in only in their direction, their response is defensive instead of responsive.  And you know … they might be right and I might be wrong.  I’m not perfect.  But I’m still the customer.

They may get away with it for awhile if the switching costs are high, but in general the information flow of the web has dis-intermediated many traditional competitive hurdles. It’s easier than ever to find new suppliers for most goods.

In the end, all of us who have to compete for a living know we have just one true source of competitive advantage

LISTEN to our customers more intently than our competitors,

DISCOVER un-met and under-served needs, and

RESPOND more rapidly and effectively.

That’s it.  The customer is the customer. Adapt or die. Right?

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  • You’re absolutely right, customers are always customers! But sometimes, as business owners you need to identify when the customer isn’t right for your business. It can have a bad effect on your business if you always consider “customers are always right”.

  • Mark, well said. 

    I believe what is really challenging companies today is that our values are changing rapidly. The niche markets that companies served in the past (defined as markets whose values aligned with the tradeoffs companies chose to make, not a demo, region or similar) are changing and many once-profitable niche markets are no longer viable. 

    Yes, companies must adapt, but they cannot adapt by simply meeting the new broad market demands and trends. They must again find niche markets and make the tradeoffs [every company makes them] that align with these markets. Otherwise all of these companies are responding to the broad market and moving to the center with their offerings. In the process, they lose the ability to have a meaningfully differentiated value to niche markets they once served.

    I don’t believe you, me and everyone else are becoming so similar that companies need to move to center and lose the very meaningful differentiation that comes from serving these niche markets. Instead, they need to adapt their differentiated value proposition, ensure there is a viable market for that value proposition and stop believing that something is still differentiated and viable today just because it was before.

  • Even if the customer is not right objectively, he always is subjectively. And the problem is, other customers believe in subjectivity. So in the end, it is always better to look at the emotional aspect of a decision to be on the right track. To be on the wrong certainly will cost more money in the end
     
    Kind regards from Germany
     
    Hansjörg

  • Very true. About a year ago I wrote a post about “firing” an unethical customer. It’s always an option and sometimes the best thing you can do for your business!

  • This is really a brilliant point Eric. I would add two thoughts to this. The Internet explodes niches. It’s very difficult to “own” something any more when competition is so transparent.

    The other point is that at least for me, my competitive advantage is the sum of my experiences. And since there is only one me, I am my own niche. Another way to look at differentiation.

    I’m really enjoying the super-smart contributions you make each week. Eric! Thanks!

  • Well said. Your point brings up another idea on this subject. How often do we rely on electronic communications for our “truth” any way? Do we even send the time to really understand customers like we should? A real dilemma for many businesses.

    Thanks for the thought-provoking comment!

  • I love this point you make, Mark: “My competitive advantage is the sum of my experiences. And since there is only one me, I am my own niche.” I never thought of it this way. Brilliant. 🙂

  • I will pay you handsomely to write comments like that every day. It will be our little secret OK, Elaine? : ) 

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  • Though provoking as ever Mark! I wrote a peice not so long ago at my blog on the fact the customer is nearly always wrong! My take was that as a sales person, you either sell the customer or they sell you.
    The better you ar eat ‘selling’ and the more you sell the customer for their own good, the better off you are.
    If you can’t work with a customer for whatever reaon, long experience teaches me that you walk away. Sticking to your principles always works out to be the best solution (in my own experience at least)
    The litmus test for me is if I am absoutely sure I have done everything to get my postion over to the customer and they still wont listen, go find another customer (my pure sales orientation showing through maybe?)
    Great piece as ever, thanks

  • Well said Tony.  You can’t compromise values and sometimes it doesn’t work out. Dumping a customer is a legitimate strategy. In the first example that was not an option but it is something I have exercised in my own business. Thanks for the great comment Tony.

  • These are great points to really consider Mark, ponder and develop into a purpose for effectively being more… more than anyone else in the market; but few have the desire or the will to take the journey because it’s not well mapped. Until now…!
    ‘LISTEN to our customers more intently than our competitors,’
    Indeed, for in the listening is found the real want of our customers. I call this the ‘Want Bunny’ and it is found down the rabbit hole, and that is a journey few like to make. But, if you know how to make it, and I do, that becomes a very distint advantage.
    DISCOVER un-met and under-served needs, and’
    Indeed, down this hole hides all the wants and needs of a customer. But the thing is, often, the customer doesn’t know what he/she wants, but you can find and point it out to them, and the results are startling…
    ‘RESPOND more rapidly and effectively’
    Indeed, to respond more rapidly and effectively you have to have better channels. The online channels are proving to be so vital today that without a structure, strategy and tactics to monitor your customers you may never make it to the customer before a better listener comes in and…
    I too have sold most of my life, and I have seen some stuff I’d love to forget: from customers to businesses, and businesses and how they treated customers; but in my world of small business those three advantages are for the most part unknown and little bothered with. That in itself is a competitive advantage.
    The customer is still the customer; but how you find your customers and how you set up the engagement with those customers is just as vital as the actual exchange of goods, services and products for the price they cost. Billy

  • Tim O’Neill/Image Masters

    Great perspective, Mark.  We often make allowances to atone for a mistake that are unreasonably tilted toward the customer, because the customer in our opinion is being unreasonable.  But we do it because that is what is reasonable from THEIR perspective, which is the one that counts.  The relationship and lifetime value of that customer outweighs the loss on the current transaction.  There is a caveat, which some of your other commenters noted, which is that we always hold open the option to fire an unreasonable customer.  We do that when our assessment is that the lifetime value of that unreasonable customer is a negative number.  

  • I would love to see you in action with customers describing the Want Bunny. : )

    An excellent point — often customers don;t know what they want until you show it to them! It’s not always easy discovering those needs. Thanks Billy!

  • Hello Hansjörg, I’ve been finding customer behavior, and decisions are mostly emotional.  What have you been finding?

  • It is great to hear from you Tim!  Hope you are well. I value your voice of experience and thank you for bringing it to the blog today! 

  • One of the hallmarks of a well managed company is knowing when to say “no” to a customer.

    Show me a company that knows how and when to do that and I’m almost certain it would be a company I’d love to work with.

  • Yes, I knew I was in trouble when I asked a potential new customer who their customer is and they said every person on the planet. Next!

  • The other aspect to poor service, even if you are unable to switch companies, is the word of mouth that customer will now spread. There are services I still use-despite the fact that they are not ideal-because of a myriad of reasons, but the first chance I get I will warn anyone to stay away before they get stuck. If you can’t please a customer, it is almost better to simply say no than leave such a negative impression that it hurts your word of mouth marketing, referrals being the second largest source of purchasing decisions. Great article!

  • Hi Mark, I love the idea of the internet exploding niches because of transparency, in the competition as well as transparency of your actual offerings, without the glossy marketing cover. 

    Thank you for the kind words, you are consistently putting out content that challenges me or makes me stop and think. I love the fact you provide a forum for all of us to share our reactions and you take the time to respond, refuting, supporting, or generally setting us straight!

  • Fully agree Mark. Sadly (in a lot of cases) they are and you have to put up with a lot of idiots in positions of power (I use the term idiots only because I don’t want to get not posted for word abuse!).

    But eventually they will get found out, and if you can hold your head up while they flounder, then you will be all the better for it.

    And the good ones (they are out there) make up for the bad ten times over.

  • Superb point Samantha. You certainly don;t want to get on the bad side of buzz! : ) 

  • I would be great for even the worst customer. But I would go to the ends of the earth for the ones I respected and who treated me fairly and in a spirit of partnership. Thanks for the insight Jason!

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  • An excellent post I can use with several small biz I mentor.

    The dilemma when starting out (a company or small biz) and you have only a few customers is how far should one bend to accommodate your customers? Often it comes down to how much money are you losing by trying to make things work 🙂 This is sad but true and one biz owner was so enamored by the status of the “big” name customer that he had “hooked” that he went a very long time  (far too long) losing money to keep this customer.

     

  • Love the post – made me pause for a long bit of thought….

    Any chance you have ever felt right as a customer and or wronged by the person doing the selling. I think there is an interesting dynamic at play. When sales people sell to other sales people; each party feels/thinks they are heard and catered to. It’s when a sales person is selling to someone who does not practice the art of sales for a living that everything seems to go wrong. It seems there are two different ways of viewing the world. 

    That said, in the case of the ‘ass’ that demanded the large credit; would you have truly behaved differently if your [his egoist attitude aside] very expensive ordered showed up flawed [no matter nature of the imperfection]? Would I? Likely not. Would the demand for reparation be different? Maybe? But, maybe not. What is so different about the arrogant bonehead that dug you for refund? 

    Employee the law of diminishing returns and bag the customer when it economy flys out the window. 

  • This is an interesting point and I think a key here is that I would not want to encourage any behavior that lets anybody off the hook for bad quality. However, there are two other considerations here. I did not begrudge the customer asking for a credit and we paid one. However, that he sold the product anyway and reveled in it was cruel and unethical.

    Second, I never approach a business relationship as a “seller” or a “buyer.” I approach it as a partner. Taking an enlightened and progressive view of business will help everybody win in the end and create new value on many different levels.

    His behavior was not one of partnership. It was taking advantage of power in a stupid way that ultimately led to his professional demise.

    I think those are two important nuances of the case study.

    Thanks for your contribution to the discussion!

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  • Wow: dis-intermediated is a new one for me! Found this post from @adamtoporek’s blog and really appreciate your sharing your experiences. I’ve never been a believer in “the customer is always right,” but it hasn’t stopped me from maintaining customer relationships. Now I have your adage to repeat instead, and it’s a much more comfortable one when dealing with clients like the ones you mention.

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  • For an entrepreneur – the customer is always the customer? Perhaps not – customers can definitely be “fired” as much as  service provider can.

    For an employee – the customer is always the customer: you  couldn’t be more right. Which has raised some interesting issues for me. 

    I’ve been trained to define my ideal customer, attract them, and work with them exclusively.  Which is the advantage as you point out in your article of becoming your own niche.

    However, when a customer holds an employee to “ransom” over a technicality in a big deal, they’re not really in a position within the company to say “Right, I’m not working with you any more, goodbye”

    Thanks for the article, the timing is apt, as I’m working through a training programme for my sales team – and frankly, this is an issue that needs to be addressed.

    How do you empower employees to proactively manage customer relationships when they go sour, and what can you put in place to ensure that both the customer and the sales team win?

  • Type your reply…

  • Fantastic nuance to the discussion Kiera. I’ll go you one better … i was in a situation where somebody in my own company was holding one of my employees hostage. It was a political nightmare. Thanks for the superb comment.

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  • Listen, Discover, Respond.

    So very true!

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