That's not correct... you can, in fact, polish a turd.<p><a href="http://dsc.discovery.com/videos/mythbusters-polishing-a-turd.html" rel="nofollow">http://dsc.discovery.com/videos/mythbusters-polishing-a-turd...</a><p>:P
It's too tempting to ignore the customer problems for as long as possible because effect is not immediately apparent, and once that resource is exhausted there is a huge pile of debt to be paid down before you get back to zero. At this point shunning customers is no longer a choice but a necessity - not only there is a huge backlog requiring huge temporary increase in manpower, the product itself ends up designed with sharp corners sticking out in places where customer complains have been routinely ignored for a long time.<p>It's a lovely trap for any large business to fall into, so that they can fail and give way to smaller, nimbler guys, who will in turn grow, repeating the circle of life.
>Rule 2: Customer service is understanding<p>No, if you read this section, rule 2 should be that if you accept credit cards, you have a very liberal refund policy, like it or not.<p>You can choose to be an asshole about giving the money back, and make the customer go through the credit card dispute process, or you can be friendly and give the money back upon request. But the point is, you are going to be giving the money either way, so you might as well make it a less painful experience.
Another good rule: Read what your customer is saying.<p>I'm not one to often get cross with companies; but my last host really hacked me off by replying to a serious issue (serious to me anyway) with a one line dismissal.<p>Bad.
There are benefits to the business from good customer service, beyond word of mouth: I mostly buy things from newegg, amazon, zappos, and jcrew when given a choice, and don't even bother to comparison shop, because my time has value and it's not worth dealing with crap customer service unless I'm going to save at least 20%.