the P&G offices in Shanghai

Messing with Chinese customers - The WTO column

(later also at Chinabiz )
"The customer is always right." That is the notion developed by American marketeers. Of course, accepting your customer is right might be tougher when you think she is crazy, a hypergonder or - even worse - just looking for an excuse to sue the hell out of your beautiful company. But still, the rule is "the customer is always right".

This part of the marketing gospel has not reached all parts of the world. Americans who come to Europe are shocked to learn that they actually have to pay for usage credit cards and other banking services, in stead of being pampered with free goodies in exchange for their business. Some European mobile phone companies have started to give mobiles for free when you register for a plan, but they do it reluctantly and think it is not a way to gain business but to lose money. have talked to hotels where their sales representative is not available at five past five o'clock. The phone was answered by somebody who actually wondered why I had the guts to call after five o'clock.

The dramatic scenes last week at the SK-II counters of P&G, stormed by angry clientèle, and the occupation of the P&G office in Shanghai are certainly becoming a case study in crisis management. There has been at least a certain level of crisis management, since P&G decided to close down its counters to prevent new angry exchanges with their customers. When the infuriated mob turned to the Shanghai offices, staff had already left and only a cleaning lady was in the office. But otherwise, this American company had forgotten all the lessons from its headquarters.

The first riot start at the Park Hotel where hundreds of customers expected to get a refund for their often rather expensive cosmetics. P&G had decided to recall its product, not because it believed there was anything wrong with its SK-II products. When it would have sticked to the marketing principle "the consumer is always right", damage would have been limited.
But the customers got infuriated when they had to sign a waiver saying nothing was wrong with the product and they could only get their money after a month. Mostly the European consumers accept irrational behavior of companies like meek sheep, but this blatant lack of logic would even upset them. Why would a company ask you to waive your rights unless there is something very seriously wrong?

So, P&G tried to reverse the marketing gospel by a new rule: "The company is always right". Some companies feel they cannot just give in to every whimp of the Chinese consumer, because you will have an angry crowd asking their money back or more the next hour. My estimation is that they also did so because in China they could get away with it, because the consumers were not well organized. Well, those days are over, so better learn the first rule in marketing: the consumer is always right, also when they are crazy.