- 20
- JUN
- 2011
Procurement GPS: Demand Management - 'customer is king', long live the king
Author: Ian George - Categories: Procurement Strategy

In the 1980s I was an apprentice in the West Midlands. In the assembly shop was a huge poster of a majestic lion with the words "The Customer is King" emblazoned across it. In a similar vein, I have read and often heard the quote "the customer is always right". I wonder how much these two statements have cost both industry and society over the years?
Reframing these quotes from their more usual and blasé interpretation might just be worth a minute of our time:
"The customer is king" - our external (and internal) customers should drive decisions and be the focus of everything we do. This doesn't necessarily mean that they should dictate everything we do. Sometimes it's the suppliers that are actually the experts and therefore the ones that know how to add real value. Perhaps procurement's role shouldn't be simply to get the customer what they wanted. Perhaps in the complex environments which we inhabit today, the focus should be to bring the customer and supplier closer together so that they can explore what the best option might look like.
"The customer is always right" - the customer knows two things: what experience has taught them and what people have told them through various media. Anything else is beyond their visibility - you don't know what you don't know. As human beings we solve problems by pattern matching. We look for solutions from our knowledge and experience that fit the problem. Unfortunately, we don't tend to seek out the strongest match, often we accept the first match that we find acceptable.
Demand management does not assume that customers are stupid. What it assumes is that the more perspectives and help you can give, the better the chances of generating a good solution for all. Maybe 'good' procurement is more about facilitating the best possible solution than gratifying a perceived need.

Comments
Paul Perera
Tue 21 Jun 2011 22:42
Thinking of a customer interaction and how they drive value, leads one to imagine the alternate opportunity what can a supplier do to shed light on value, we survey our customers, how often do we spend time surveying our suppliers for their insights into value...great article Ian.
Hazel
Wed 22 Jun 2011 12:00
I have stopped buying Volvo cars.
There is nothing wrong with them I have had Volvos for 35 years my husband too.
But last time I went to buy a Volvo the salesman told me he and his sales staff were very busy so come back in the afternoon.
I was off to a wedding fairly obvious from my attire so I could not go back that day.
So I bought a Mercedes from a local garage. Their sales staff saw to me straight away.
I will probably have another Mercedes next time too as the Volvo garage in our town no longer exists. My husband now has Skoda cars their sales people are very attentive.
Andres via LinkedIn
Thu 23 Jun 2011 16:35
Well, as a customer I always want to be right, no one likes to heard you are wrong. As a business person, I have my doubts! Customers tent to live by this quote" customer is always right" until you prove that they did not provided the right information, that what they request is suitable to what they buying. for example if a customer buys a low cost car they cannot expect to have the same features of a luxury car, so if he demands that is that customer right?
Any how, I do not believe every customers must be serve with the best to our ability....
Victor via LinkedIn
Mon 27 Jun 2011 09:58
I However agree with Ian, this statement has been long overstated; the business has since moved from the time where there are fewer suppliers or fewer buyers. The advantage is not to the customer everyday nor is it a favor to the business but commerce is a combination of the two and the fair trade is each one speaks and the other listens. This way we will improve the market and explain some misunderstandings at a matriculated level than to just say the customer said'....' them we apologise.
Sasha
Wed 24 Aug 2011 19:52
This article is correct! The point about the customer being 'right' is not to do with them being factually right or being able to communicate clearly - that's where business start to lose the plot. Whether you as a business understood the customer correctly, does not make them wrong. This is about the customer being valued by a company for their ability to pay for 'the right thing'.
Of course the customer is never wrong. They are doing the paying - they are rewarding you, the company, for supplying the right thing. Therefore it's up to you, as a company, to establish what it is they will pay for and whether you can give it to them.
I think a lot here depends on whether a company's attitude to business assumes that a customer is a statistic on a spectrum between stupid and desperate.
The customer is king of how to satisfy their needs, not the company. Hence the company must focus on what those needs are, NOT what they want them to be because it suits their staff, their systems, their budgets, etc. Unfortunately this is what the case usually is with businesses. Rather than focusing on customer 'needs', businesses focus on the customer and forget the need - what are they saying, when did they say it, how did they say it, prove it, record it, etc. Set up so many rules about dealing with the erstwhile customer that you never actually understand what they need.
That's all wrong, and as a customers we know that too well.
Antonio
Thu 27 Sep 2012 04:42
Indeed, hell hath no fury like a customer scroend. If you keep your customers happy, then they’ll keep coming back to you. If not, then they’ll look for other options. Poor customer service is one surefire way to lose good clients.