The cliché that the customer is always right is so common that some companies build their entire business models off of it. However, it's not really a good business strategy. It's just a phrase coined by Harry Gordon Selfridge (founder of Selfridges in London) in the early 1900s.

To those businesses' credit, it's a common mistake. Knowing that bad customer service could kill their brands, they cling to what seems like a tried-and-true principle for delivering a great experience. However, adhering too closely to this mantra could be a disastrous mistake. While about 80 percent of companies think they succeed in offering superior service, only 8 percent of their customers agree.

The lesson is that even stellar attempts to provide customer service don't always hit the mark. In this case, that's because what customers need doesn't always match up with what they say they want.

At times, you may have to acknowledge that the customer is wrong and risk short-term dissatisfaction in order to provide a truly great overall experience. Such times include:

1. When customers are ill-informed

When customers have opinions that your expertise indicates are wrong, the greatest service you can provide is setting the record straight. As Bret Larson, CEO and co-founder of telehealth company eVisit, explained, deferring to customer expertise is "one of the most destructive business models."

Healthcare is an excellent example of this scenario. Patients often self-diagnose before they visit a doctor, leading them to make suggestions that are based on a fundamental lack of understanding about their ailments. A University of California, Davis study shows that, as a result, focusing on patient "satisfaction" leads to higher health costs and mortality rates compared to placing the emphasis on patient health.

2. When customer opinions discourage you from improving

When you have a well-loved product, some customers are going to respond to any attempts to improve it with an "If it ain't broke, don't fix it" mentality. This was the scenario cleaning products maker Jelmar faced when it began transforming its CLR brand of cleaning supplies to be more eco-friendly.

Alison Gutterman, Jelmar's CEO, says the company struggled with how customers would receive the change, but ultimately, it became a turning point in the brand's success. "The fact is your customers won't always make the right decisions about environmental issues," she explained. "We decided to introduce our new formulations quietly, replacing the products but making no changes to the packaging. All our hard work paid off when we got the outcome we'd been hoping for: sales continued to grow."

3. When customers create unnecessary stress on employees

One of the biggest factors in employee happiness is the connection to customers. Yet assuming the customer is always right can create friction and resentment. Putting faith in your employees' abilities to solve problems and trusting their judgment makes them more likely to put customers' needs first in their everyday interactions.

In his book "Happy Hour Is 9 to 5," Alexander Kjerulf says that "believing the customer is always right is a subconscious way of favoring the customer over the employee, which can lead to resentment among employees. When managers put the employees first, the employees will then put the customers first. Put employees first and they will be happy at work."

4. When customers drain more time and money than they're worth

Difficult customers are a fact of life for every company. Assuming they're always right could destroy your business. One of the more difficult truths to accept is that some customers aren't a good fit for your brand, and you can't realize that until you accept that they aren't always right. In Timothy Ferrriss's book, "The 4-Hour Workweek," he recounts how letting go of the difficult customers who ate up all of his mental bandwidth allowed his business to finally soar.

This doesn't mean that the customer is never right or that you can't learn anything from customer feedback. On the contrary, that feedback is still vital to any company's growth and success.

However, it's time for companies to let go of the myth that appeasement equals customer satisfaction and loyalty. Only then can they finally focus on providing customers with the products, services, and experiences they'll truly appreciate.

Published on: May 7, 2018