Don't Punish Your Best Customers

Most companies create rules to solve problems.

They're usually solving problems caused by their worst customers - the ones who abuse policies, make unreasonable demands, and generally cause headaches.

Meanwhile, the majority of customers - the good ones who treat your business with respect - get punished with bureaucracy they don't need.

And even worse - no one pays attention to them!

Most hotel guests are good people who just want a clean room and a good night's sleep.

But because a few guests steal towels or trash rooms, hotels make everyone:

• Put down a security deposit

• Leave a credit card for "incidentals"

• Sign multiple forms at check-in

• Wait for housekeeping to verify the room condition at checkout

It's a perfect example of the 80/20 rule gone wrong.

The 80% of guests who would never dream of stealing a towel or damaging a room get treated like potential criminals, all because of rules designed for the 20% who cause problems.

In reality, it's like 90% of the rules are for 1% of the bad customers.

This reactive rule-making spreads through organizations.

Someone causes a problem, and boom - new policy!

Another issue pops up - another rule gets added.

Before you know it, you're drowning in procedures that make everyone's experience worse, all because you're trying to prevent bad behavior from people who probably shouldn't be your customers anyway.

Your best customers - the ones who generate most of your revenue and cause zero problems - get frustrated dealing with policies they never needed in the first place.

Smart companies flip this dynamic.

Instead of building systems around their worst customers, they optimize for their best ones.

They accept that some people might occasionally take advantage, but that's better than treating everyone like potential criminals.

Take Costco's famous return policy.

They could require receipts, original packaging, and limit returns to 30 days like most retailers.

Instead, they trust their members and accept nearly any return.

I'm sure in some edge cases, they'll refuse a return, but that is done by exception, not by policy.

The few who abuse this generosity are far outweighed by the loyalty and goodwill it creates with their core customer base.

The solution isn't to have no rules - it's to have fewer, better rules that respect your good customers' intelligence and dignity.

Start by examining your policies:

• How many exist solely because of edge cases?

• How many punish the majority for the sins of the minority?

Better yet, consider whether strict policies are really the answer.

Often, empowering your team to use good judgment works better than rigid rules.

Trust them to handle situations with wisdom rather than forcing them to follow procedures designed for the worst-case scenario.

Every policy has a cost.

Make sure you're not paying too high a price just to control your worst customers.

Yallah Habibi,

Jon

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