Is the customer always right?

I was giving a lecture about customer service recently, when one of my students asked me a question that I have not come across before. And the question got me completely stumped as I just didn’t know how to answer it.
The student asked me if there were any circumstances in which a company should completely ignore the views of its customers and do something that is clearly against their wishes.
The only obvious answer I could think of at the time was putting up prices. Sometimes you have to increase your prices, even though any price increase will always be disliked by your customers!
But aside from that, I couldn't think of any other example of where it made good business sense to go completely against the wishes of your customers.
But after I got home that evening, I began to think about the question more deeply, and I realised that there actually is one other circumstance (apart from price rises) where it makes good business sense to completely ignore your customers’ wishes.
It is when there is overwhelming evidence that your customers don't know what is in their own best interests!
Now, I actually found that last sentence quite difficult to write, because it sounds quite patronising and arrogant. In fact, it goes completely against the very purpose of running a business, which is to satisfy the needs and desires of your customers, and hence to make a profit!

It’s all linked to Marketing
According to the Chartered Institute of Marketing the official definition of marketing is: “The management process which identifies, anticipates, and satisfies customer requirements efficiently and profitably.”
And the bit that is most relevant here is 'anticipating and satisfying' your customers' needs. Surely if you go completely against your customer’s wishes, then that equates to bad marketing and bad business practice generally?
Well, not necessarily. Although it sounds counter-intuitive, I would argue that sometimes customers aren't the best people to know what is best for them. The customer thinks that they know best - but sometimes they don’t!
This is because sometimes you, as the business owner, are privy to information that your customers are not privy to. And sometimes you have a greater degree of expertise than the person buying your product. For example, you might have a deeper understanding of the wider marketplace and your competition. Or you might be in a better position than the customer to anticipate future developments and external (know as 'macro' or 'PESTLE') factors.
At the risk of sounding condescending, sometimes the business owner knows better than their customers about what is in the customer's best interests.

And so on to football…
Regular readers of this blog will know that I often mention my favourite football club within this website. For around 50 years I have been an avid supporter of Lincoln City FC, a small but growing football club based in the East Midlands of England.
As mentioned in a previous article, over the last few years Lincoln City have gone through a massive transformation that has taken them from non-league status (watched by average attendances of around 3,000 people) to playing football in League 1, with attendances averaging 9,000 people. To put this in business terms, the customer-base of the football club has increased roughly three-fold in the space of just a few years.
In my forthcoming book 'The Loyalty Gap' I use the football club as one of my case studies in order to ask how a business should deal with a rapid and unexpected increase in customers, and more importantly, how to ensure that the influx of new customers remain loyal in the longer term.
But for the purposes of this article, let's assume that Lincoln City will retain the vast majority of their new customers. And let's also assume that their new-found success continues in the future.
If this is the case, then the football club are soon going to come up against a massive stumbling block. Their stadium since 1895 has been 'Sincil Bank', which only has a capacity of 10,000 people, meaning that most games come close to selling out. In fact many of the bigger games actually do sell out, leaving some fans feeling disappointed and angry.
Promotion up to the Championship, would mean that Lincoln City would be playing much bigger clubs like Nottingham Forest, Derby County, Sheffield United, and numerous other football clubs that could be expected to have an away support that would fill well over half of the stadium.
To put it bluntly, if/when the football club get promoted again, the stadium will be at full capacity almost every week, and on many occasions the Club will have to turn away many thousands of people who would happily pay to attend games if they were able to get tickets.
Some fans will be left feeling disillusioned and potentially millions of pounds will be lost by turning away eager supporters that can’t get tickets. In addition a vast amount of money will be lost by being unable to capitalise on all the commercial opportunities such as extra programme sales, car parking, food, drinks, merchandising, advertising, corporate entertaining, sponsorship, etc.

The football club has two choices…
So the football club are faced with a stark choice. They need to either expand their current stadium capacity, or build a new stadium to meet the increased demand.
Obviously the former option would be cheaper, but it presents major practical difficulties. Firstly, the water supply to the stadium is only just sufficient at the moment to meet with requirements on a match day. Many supporters already complain about the lack of hand washing facilities in the toilets, and the very low water pressure means that the taps only give out a weak trickle of water when you're trying to wash your hands. If the stadium was expanded, it would be very difficult to provide the required number of toilets and wash hand basins demanded by health and safety legislation.
And there are several other important health and safety issues that the club would need to address. For a start, the stadium is located in a very built-up residential area. One side of the stadium is very close to high density terraced housing. On the other side there is a Fire and Ambulance Station and new council offices. And running right along the side of the ground next to the main stand is a very narrow road and a water outlet called the Sincil Drain, from which the ground takes its name.
The Club’s Chief Executive also stated publicly, at a shareholders AGM, that it would be very difficult to increase the capacity of the stadium by a significant amount, due to regulations relating to evacuating the area in the event of an emergency (for example a major fire, a public order disturbance, or a terrorist incident). Obviously, this type of incident is very rare, but in designing a sports stadium, risk assessment planning procedures always have to take account of worse case scenarios, no matter how unlikely they are.
So to put it simply, if the club were to choose the option of staying in their current stadium, they would only be able to increase the ground capacity by a few thousand people at most.
In addition, if they ‘stay put’ in the long term, then there would be no room to add extra commercial facilities such as bars, restaurants, events rooms, retail outlets, car parking, or any other associated facilities that could generate extra income for the Club.
At best, an expansion of the current stadium would only allow for a small increase in ground capacity, with no other commercial benefits. And in addition, the club would have to spend a fortune in replacing the poor quality customer facilities that are currently provided, such as cramped and uncomfortable seats with little leg room; stanchions that obscure the view of many supporters; toilet facilities that wouldn’t look out of place at Glastonbury Festival; bar facilities that are always overcrowded with long queues to get served; poor entrance and exit facilities, leading to overcrowding and long queues. The list of problems goes on and on. To put it crudely, ‘you can’t polish a turd’.

So what about the other option of moving to a new stadium?
The football club has already conducted a feasibility study regarding a piece of land a few miles from the existing stadium. The land is currently open fields that have been designated for development by the local council for new houses and leisure facilities.
It is fairly certain that the football club would get planning permission from the Council to build a new stadium on the land if they wanted to, and there is plenty of room to develop numerous revenue-generating facilities such as new bars, food and merchandise outlets, a gym, a health club, lots of extra car parking, training facilities, function rooms for weddings, parties, corporate events, etc. There would even be enough room for a new hotel, which could double-up as executive boxes to be used for corporate entertaining on match days, similar to the Headingley Lodge Hotel which is built alongside Yorkshire County Cricket Ground.
At the moment, the club's current stadium doesn't get used very much apart from on match days (less than 30 times per year) but a new purpose-built stadium would enable the football club to generate income 7 days a week, 365 days a year.

It sounds like a no-brainer, doesn't it?
But unfortunately this is where the problems start. Many of the Clubs' fans are opposed to moving to a new stadium. Some of them cite the reason as being the inconvenience of moving to a location that is slightly further away from the train station and transport facilities. But in reality, there is really not much difference between the distance of their current stadium, and the proposed new site. It would only amount to perhaps an extra 15 minutes’ walk from the town centre, compared to the current location. And for the fans that drive to games, it would be a lot easier to get to the stadium, as they would be able to park right outside the ground in a vast new car park, rather than having a wild goose chase around narrow terraced streets, trying to find a parking spot within a densely populated residential area.
Some fans are a bit more forthright in their views, and they simply say that their opposition to a new stadium is for reasons of sentimentality and tradition. And I do totally understand this argument myself. I remember going to football matches at Sincil Bank with my late father from the age of five. I remember spending much of my childhood at the stadium, involved in the Club from a young age in all sorts of supporter’s initiatives, in addition to actually going there on a match day to cheer on the lads.
At the age of 19 I moved away from home to go off to University, and I never returned back to Lincoln to live. But despite moving a long way away, I would always travel back almost every week to support my team. And my support wasn't just during the good times. I remember plenty of long late-night train journeys to go to games in the middle of a freezing winter. Games that were attended by only a few thousand people, played in the depressing ‘bargain basement’ of English football.
After the match I'd get back home well after midnight, having watched a heavy defeat in an almost empty stadium. These bitter-sweet memories from five decades of loyal support will stay with me for the rest of my life. Unlike many of the Club's newer fans, I have got a very deep emotional attachment to this decrepit old stadium. These are memories that are ingrained into 50 years of my life.
So I do totally 'get it' when the fans say they don’t want the club to move to a new stadium several miles away. It just feels like abandoning your lifelong home. I completely understand these profound emotions.
But I am quite certain that the owners of the Club have enough business nouse to know that the move to a new stadium is essential for the long-term success of the football club.
Even more so, because the main owners of the football club are foreign investors who have only been involved for a few years, and therefore don’t have the same emotional attachment as the fans. The owners are very astute and successful businessmen who possess great commercial acumen, but without the ‘baggage’ of sentimentality that myself and other fans hold for the current stadium.
In other words, the people running the company are in a much better position to understand what is in the best interests of the football club and its fans. To put it bluntly, they know better than the customers what is in their own best interests.
At the moment the proposed ground move is on hold and the official position of the football club is that both options are open. In fact it seems that the new stadium proposals have been 'kicked into the long grass' for the time being (apologies for the cheesy pun).
But at some point soon, big decisions are going to have to be made. At the time of writing the football club are mid-table in League 1 and promotion is unlikely this season. But with a few astute signings, the club could be competing for promotion to the Championship next season, or within the next few years.
If the club want to compete effectively at Championship level, it's going to take a massive increase in income. But where does that money come from?
There is some scope for an increase in the fan base. The city has an official population of 98,000 people, and the wider urban area has a population of 130,000 (Source: Central Lincolnshire Local Plan Core Strategy, 2016). So there is the potential to increase the number of supporters by several thousand in the future. And the actual match attendance figures would increase substantially if the club were promoted, simply on the basis of the thousands of extra away supporters.
If they were playing in the Championship, it's not unreasonable to expect the club’s attendances to reach 15,000 people for the local 'derbies' and games played against the big city clubs. So even if the current stadium was expanded by a couple of thousand, it would still not be large enough to cope with the demand. And hence a vast amount of money would be lost by turning away potential customers.

What’s in a name?
The great irony is that the football club has just announced a new three-year commercial deal with a railway company which means the stadium will be renamed for the first time in over 100 years. The stadium will change from being called 'Sincil Bank Stadium' to being called 'The LNER Stadium'. But surprisingly, it seems that most of the fans aren't too bothered about this. In a recent survey of fans in the Lincolnshire Echo only 16% of respondents said they were against the stadium being renamed. Another 28% said they “weren’t keen” on the idea but understood the commercial reasons behind it. A massive 56% of respondents said they were “all for it” when asked about the ground being renamed.
But the interesting thing is that the club's board did not consult the fans over the change of stadium name. They just went ahead with it, and then sought to justify the decision afterwards on the basis of commercial considerations.
And although there has been a small amount of opposition from supporters, most fans understand the importance of putting money first when it comes to the longer term objective of having a successful team. In other words, the customers have reluctantly understood that a decision made without their consultation or approval, is in their own best interests.
And I believe that this is what the board of directors need to do in relation to a new stadium. If they try to conduct any type of consultation exercise about whether to move stadium or not, it will just end up in a 'Brexit style’ slanging match, with people becoming more and more entrenched in their views, and culminating in one side feeling they are the ‘winners’ and the other side feeling they are the ‘losers’.
The result will be dividing the fans and creating a negative atmosphere. Or even worse, if a large majority of the fans oppose the stadium move in a ham-fisted consultation exercise, then it will make it incredibly difficult for the football club to move stadiums at all, without losing the goodwill of the supporters.
So if the football club were to ask my professional advice, I would suggest that they should take a deep breath and make the decision to move to a new stadium, without consulting the fans at all. It sounds brutal, but sometimes you have to ‘do the right thing’, even when the majority of people disagree with you.
But that doesn’t mean the supporters can’t be involved AFTER the decision has been made. There are numerous possibilities for involving the supporters in decision making about the new stadium. For example, they could be consulted about the design of the new stadium and the facilities that it contains.
In fact, customer consultation and research should be an essential ingredient in any new business initiative. It’s vitally important to consult your customers on the development of any new product or service. But be very careful in asking your customers a binary ‘yes/no’ question, especially if emotions are running high and your customers are likely to strongly disagree with each other. Therein lies chaos.
Business history is littered with numerous highly successful products that would never have been introduced if the customers had been consulted first. The car. The home computer. The internet. The bagless vacuum cleaner. The iphone, ipad and ipod (and its forerunner the Sony Walkman from the 1980s). We would still be living in caves if it hadn’t been for brave innovators who were prepared to stick their necks out and invent something new that everyone else said they didn’t really want!
In the words of the late Steve Jobs: “It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.”
In the case of Lincoln City FC, the actual choice of whether to move stadiums should be taken by the football club without any attempt to consult the supporters. They need to decide to move to a new stadium first and THEN consult the fans afterwards about what the new stadium will look like.
Although it has not been said publicly, I’m quite certain that the owners of the football club can see the complete sense in moving to a new stadium for commercial reasons. But when the day comes to turn this decision into a reality, any attempt to conduct market research with the supporters would create considerable arguments and division. Worse still, it might look like a tokenistic ‘tick box exercise’ where the decision had already been made. And customers absolutely hate to think they are being used as part of a ‘fake consultation’ for tokenistic reasons. Consultation exercises with customers need to be honest and sincere - or not done at all.
So, to return to the question at the start of this article. If you already know with certainty what is the best course of action, then sometimes it makes sense to ignore the wishes of your customers. If you know you are right, then be brave and do what you know to be in your customers’ best interests. They might disagree, but they will thank you for it in the long term.
Or to put it another way: the customer thinks they are always right. But sometimes they’re not.

© Darren Bugg 2019 (updated 2021)

Darren’s new book 'The Loyalty Gap' will be published in Autumn 2021.

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