The customer is always right. Always, always, always. Right?

Ok, maybe not. In fact, sometimes the customer is so wrong, it hurts. Many CEOs have psycho-customer-from-hell horror stories. CEO Dean Allison of the Harwood Group, which runs three Wendy's franchises in Niagara, Ontario, is one. He once received a complaint letter from a customer who claimed that something had been missing from her food order. Allison recognized her as someone who had complained before. Even so, he instructed his cashier to give the woman a complimentary meal, whatever she wanted. She ordered just under $70 worth of food - enough for more than 15 people. Then she called later to say that a mistake had been made again. "I nearly lost it," says Allison.

Instead, he said, "Ma'am, it looks like we'll never keep you happy. Maybe you'd better try someplace else." And after hearing that the woman had pulled similar ploys with other local merchants, Allison sent her a registered letter barring her from the premises.

Ralf Mandt-Rauch, CEO of, in Los Angeles, actually looks forward to encounters with angry customers. "Especially where the customer is a pain, we find that if we can turn them around by accommodating their needs whenever possible, we end up with tremendously loyal repeat customers," he says. "This obviously doesn't always work, but it certainly works most of the time."

But how about when a company's average sale is a bit higher than that for a wristwatch or a burger? Christian Hammarskjold, CEO of the USSC Group, in West Conshohocken, Pa., which manufactures and distributes train and bus seats, is a firm believer in a generous warranty policy - with some flexibility built in. "Regardless of your policy, your product has to live up to your customers' expectations," he says. "That cannot be put onto a piece of paper. It varies from one customer to another. We have never said no to a customer who is adamant."

In the USSC Group's third year, Hammarskjold's largest customer suddenly made a warranty claim on product shipments from the previous two years. "Much of our product was failing in the field," he says. "It was a disaster!"

Both companies were at fault, so Hammarskjold provided all the labor for a complete retrofit of all the sold units, while the customer paid for the materials. "It almost killed us," Hammarskjold says, but today that customer is still one of USSC's largest. "And more important, we have become the benchmark for service," he says.

For Adam Goldberg, CEO of BouClair, a chain of 62 fabric-and-window-covering stores based in Dorval, Quebec, the people cost involved in make-goods for customers is more important than the overhead involved. Good retail help is hard to find, so Goldberg knows he needs to maintain a delicate balance between pleasing his customers and protecting his staff. A couple of times he has even gone so far as to "fire" customers because they were verbally abusing his employees. "My associates know that if the customer starts to abuse them, they are not obliged to take it," he says. "Sure, the customer is always right, but we don't feel it's right for the customer to curse at them."