'Customer is always right' may cost you dearly
The problem with that phrase is that it might be coined with good intentions in mind, but it can lead to a disastrous situations and we will show you how.
First, if you put "The customer is always right" on the wall, you are in fact saying "My dear employees, you opinion isn't worth a dime." Yes, it may sound rude and it is rude: You are saying that everything your customer do or say is worth more than anything your employees do.
And this is wrong because we all know there are all kinds of cutomers, from brilliant to absolutely annoying, and to put all of them above your own people is not right.
Your customer may be extremely rude or demanding, putting your employee in a position to run around, trying to meet those demands when a) other customers are waiting, b) those demand could be very unreasonable. Thus, your employee is wasting her valuable time on that customer and that leads us to the point No2.
And that point is an unfair advantage. If your customer is yelling "I'm not satisfied! I want a replacement! And an addition! And discount!" and you are willing to give all that, that customer has an unfair advantage over others. In other words, a pleasant and polite customer will get her product or service, and yelling and a rude one will get all those benefits. Doesn't seem right.
Third, losing customers is bad for business, but keeping bad ones is ever worse. While losing a customer may cost you money, jumping around a bad one is making your time and money slipping between your finger and you may end up with a greater loss in money and resources than the gain you got serving that customer.
So, it's not always about the money. Or, to put it differently, you should put it in perspective and see will you lose more than you'll get.
Fourth, if you want to follow "The customer is always right" mantra badly, your employees will not. Because, what's the point? There will always be an unsatisfied customer, there will always be some unreasonable demands, so what your people will do? They won't care any more. They will work like robots, do what you tell them and your customer experience will become terrible.
And for the end, think about this: Who is more important to you - your employees or demanding customer now and then?
Your people are working day in day out to make your company great and they don't deserve to be less worthy than "I saw a scratch under the microscope! I want new pair of shoes for free!" customer. Give them freedom to deal with customers, give them freedom to say "no" and you will have happy employees and a company that flourishes.