Comment by PaulHoule | Hacker News Reader

Comment by PaulHoule | Hacker News Reader

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The first time I read the phrase "the customer is always right" was a book about aluminum produced by the Alcoa company when I was a kid.

When I parrot this phrase to most people today they tell me the opposite is true, that any customer who isn't satisfied is an asshole and is doing you a favor if they switch to the competition.

I remember reading a business book in the early 2000s that said as much and that you should be trying to fire your worst customers. Around that time my stockbroker fired me as a customer because I didn't trade enough and because when they invited me to a presentation on annuities I asked why I shouldn't buy I bonds from Treasury Direct.

My reply to that is that there's a fine line between getting rid of your worst customers and getting rid of all your customers and it strikes me as another demented example of wishful hinking in "business as usual" like Best Buy's decision to stock a single Sony mirrorless camera body but not stock a selection of lenses to use with it.

"The customer is always right" refers to the product design. If you sell shoes that you think are the best on the market, but customers think they're bad, the customer is always right. It helps direct attention toward selling what people want, not what you think they should want.

Notably it does not mean that individual customers (or would-bes) are always justified in their complaints.

I believe the original phrase was, “The customer is always right in matters of taste.” It’s a shame that party got dropped.

It's just an SNR problem with the phrase. The LTV of the customer needs to exceed the CAC plus COGS for that customer. And if you can't see that being the case, firing the customer is necessary.

In many businesses this is hard to account for, but we can do this now. Hence AWS charging a premium for proper support.

The interesting part of "the customer is always right" is that it moves one from the "this customer is idiot" default to the "what is this complaint telling me" and the notion that LTV isn't apparent at single interactions. So you optimize the marginal COGS down (including support, if necessary) using this as your bellwether, and try to keep in mind that LTV can be much higher than single support case cost.

But if you use "customer is always right" to increase COGS and still leave LTV same you're making a mistake because you're conforming to the phrase over the function it has.

"The customer is always right" is better read as, "Sell the customer what they want to buy (if you can)".

That doesn't mean the customer gets to mistreat or assault your employees over the proximity of pickles to their hamburger patty when it was being cooked, but that if enough customers ask for more meat on their burger then you should offer a double or triple patty option.

Thanks. That's a useful interpretation to me.

The trouble with that is that the music in most people’s heads plays at too high a volume.

If you're always firing your worst customers, then sooner or later you won't have any customers left.

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