The 80/20 Rule of Customer Service

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As entrepreneurs many of us work with other startups and small companies. As time goes on some of these companies reach their dream and do in fact “make it big.” What happens, however, when this growth causes them to lose sight of what made them big in the first place?

I recently had this experience, and while I’m not entirely sure why it happens, I do know that this attitude can be a huge mistake for business.

Taking your best customers for granted is business malpractice…

In my case, it’s a restaurant that my family and I have frequented since the day they opened. We were there in the early days, when service was bad and they were ironing out the kinks, and we have been there after family celebrations and many times in between.

So you can imagine my surprise when, after getting not just bad, but rude service, two times in a row, and after pointing it out to the owner, he didn’t really care; didn’t care that his staff was discourteous, didn't care that a loyal customer was upset, didn't care enough to even respond to an email. Sure, I get that I am not some corporate client, and not some big catering customer, but what I am is a good and loyal customer, and those are gold.

Taking your best customers for granted is business malpractice.

Now, I am not one to say that “the customer is always right” because anyone who has been in business for any length of time knows that that certainly is not true. But what is true is the 80-20 Rule: 20% of your customers create in 80% of your income, buzz, etc. What is important then is that you not forget who got you to where you are, and that your best, most loyal 20% customers know that you appreciate their allegiance.

They are the one’s that keep you in business.

Sam Walton had it right when he said, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” When you forget who your 20% are, when you put policies before your people, when you say that your rules are your rules and the customer be damned, you are beginning to miss the point and are in danger of forgetting who got you here in the first place.

Recall that not long ago, Netflix decided to nearly double the cost of one of its most popular services, angering its most loyal customers in the process and causing many to leave the company in droves. It took some reversals of actions and admissions of error, but the almost-fatal error was fixed when the company realized that their bread-and-butter customers are in fact the ones that butter their bread. Angering one’s best customers and taking them for granted is not a smart business move.

There is a quote by Gandhi that fits:

A customer is the most important visitor on our premises.
He is not dependent on us. We are dependent on him.
He is not an interruption in our work – he is the purpose of it.
We are not doing him a favor by serving him.
He is doing us a favor by giving us the opportunity to serve him.

No, the restaurant probably won’t notice that I took my business elsewhere, but a savvy business, a great business, would — and would not let it happen.