Is the customer always right? Certainly some entrepreneurs think so. Sukhpal Singh, founder
of Euro Car Parts, says:
"My philosophy is that the customer is always right, even when he is wrong." It has clearly paid off: Mr Singh, who arrived in Britain as a refugee from Uganda aged 13, has
just sold his vehicle spares company for £225m.
Other business owners disagree, however. The creator of PizzaExpress, Peter Boizot, told me after I took over from him as chairman, that when he opened his first restaurant in Wardour Street in London's Soho in 1965, diners would ask for chips with their pizza. He explained that authentic
pizza could not possibly be adulterated in such a way — the British had to learn how
to eat the Neapolitan way.
Innovation is one area
where firms should perhaps lead the public. The largest single customer of Apple told me that the Californian technology giant listened to
its customers less than any supplier he had ever known. This clearly reflected the views of its founder, the late Steve Jobs. "A lot of times, people don't know what
they want until you show it
to them," he said. And the ground-breaking success of the iPod, iPhone and iPad,
and Apple's $76bn cash pile show just how rewarding it can be to ignore all the experts and consumer surveys.
Customers now are much quicker to complain, and
have become more assertive thanks to email, Twitter, Trip Advisor and the like. This means managers know very quickly if operations are failing to deliver — but also means customers try it on from time
to time. From complaints I see at my various restaurant operations I would guess
that least 10 per cent are
an attempt to get something for nothing, based on a spurious grievance. I fear such ruses are a reflection of a tough economy, and a belief among all too many citizens that businesses are basically
all 'ripping off' the public. If they could see how for many industries profits and returns have fallen, while costs and risks have risen, they might
feel differently.
No one can possibly doubt that customers are the lifeblood of any business.
But there will always be a tension between providing
a satisfying experience to
users and making a sufficient margin. After all, companies that are overgenerous tend
to go bust — which is not good for anyone.
Luke Johnson is chairman of Risk Capital Partners, part owner of a number of restaurant chains, and author of Start it Up: Why Running Your Own Business is Easier Than You Think (Portfolio Penguin, £12.99)
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