Is the Customer Always Right?

I worked at IBM for a bunch of years. I loved that sign on the wall, “think”. I loved the sign that said “Respect for the individual.” IBM exhilarated me and trained me and hired me right off an NFL football field with nil tech experience. Others would not do this. But they trained and trained and I loved it.

One of my favorite jobs at IBM focused on customer value to a large manufacturer. The belief, standard to many companies,  that big revenue producing customers were king and were always right. The data we gathered exposed this myth. Data was gleaned from ERP for orders and accounts receivables, from support for all customer service touches, from the sales system for pricing of products and services. The results were clear. This customer, big revenues included, was killing the manufacturer.

Profitable Customer is Always Right

The cost of managing this customer stripped profit to bare bones. The assessment proved to management that the customer is not always right, instead the profitable customer is always right. Knowing the profitable from the company killers was hard and very expensive for this manufacturer. Now it is different.

A CRM can be deployed that talks to ERP. The CRM has Account management and order management and support modules. The data is already in the CRM and reportable. The only data needed is accounts receivable from ERP or from a financial system. Now reports can be built to show value of each customer. This is cool. Now any company, small or large, with 100 customers or 100000 can use CRM to know their customers. Knowing customers is key. I learned this the hard way.

When I started my first company I won an account that I did not need to win. The business needs were deep and not core to our tool. The staff at this company was rude and abusive. I remember talks with the President of this company about my support staff and how they were in tears after getting calls from his technical guy. The deal went on for 3 years and then I used an out in the contract to dissolve. The overhead from this customer was not worth the revenue. Good riddance.