Recently a popular fast food chain stopped offering a number menu items, including nachos supreme, seven-layer burritos, Mexican pizza, and others — not because they were not popular with customers but, in a way, because they are popular: The coronavirus pandemic has revealed to Taco Bell that it can reconfigure its restaurants to function with fewer employees, mainly filling takeout and drive-through orders, and that means that certain menu items must be eliminated to maintain order and efficiency. That saves operating costs, and cutting certain items also reduces packaging costs – which not incidentally will support some “sustainability” objectives that the business has promised investors it will reach. So, if you like the seven-layer burrito you’ll simply have to accept this decision or locate a different supplier.
“The customer is always right” is a retailing maxim attributed to Harry Selfridge, but it’s surprising how untrue it has become.
Cable TV customers for years have wondered why they must pay steadily escalating monthly charges for bundles of programs they do not want. But again, the customers are “wrong.” An á la carte menu of channels is unthinkable to the providers, who cannot or will not turn down the fees they accept from individual broadcasters to “deliver” customers, so basic cable packages are now priced over $100/month – and the customer is welcome to pay surcharges for the items that he or she “wants.”
Fast food and cable TV are comparatively small-scale matters and customers do not have to stick around if they’re not satisfied with the products or service they receive. In some more essential matters the calculation is less clear. Later this month Siemens AG will spin-off its power technologies business, which manufactures industrial gas and steam turbines and power-transmission systems. Almost immediately, it seems, the new Siemens Energy will begin scaling down its organization, and not just because it has more employees than the current operations require but because its customers are all wrong and it will be Siemens Energy’s task to make them understand this.
“Around 40% of … electricity generation is still based on coal and so it is a tremendous element which we have to resolve,” CEO Christian Bruch told CNBC, alluding to the external factors which are making coal-fired power generation unacceptable. Never mind that customers buy turbines to generate electricity in ways that are effective and affordable. This new market entry will find ways to avoid serving that part of the market.
Generally, we understand that businesses succeed by finding ways to provide something that customers lack. If the provider and the customer agree on the need and the cost of addressing that need, a transaction can take place. Business proceeds, and everyone is satisfied. The Selfridge motto adds “service” to the formula, so that the customer may feel especially pleased with his outcome and may return again. Waiters and clerks remind of this when they explain it is “my pleasure” to complete essential tasks.
But transactions demand an agreement, a coalition of wills that indicates what need should be addressed, what service will be done, and what fee shall be paid. The concession that customers are wrong but still should patronize the provider threatens the transparency to which we give nominal tribute. Without clarity and honesty, everything becomes increasingly tense, our agreements are gradually more strained, and each of us becomes more suspicious of the other.
None of the businesses mentioned here are uniquely or even especially “suspicious”, but we live in unusually tense times. Everyone is welcome to conclude what is the source of the tension, the cause of the suspicion, but I return to my frequent concern that the transaction is the sole basis for our civilization. We can still find some agreement on fees, but those too are under increasing pressure. We demand “value” according to increasingly singular and personal terms. We care less and less if our transactions are equitable.
The examples here show that it’s becoming more difficult to agree on the types of product or service to be provided. And as for agreement on what needs should be addressed I am afraid we are a long way from the goodwill that should win out whenever a transaction is possible – or a connection is required. We may need to reconsider what we need before anyone or anything is right again.