Churn rate at this company is 1.5% per MONTH. That translates to 18% a year. One in every 5 customers switches to competitors. Question is who are those people. How many of them had minor or major problems but never had a chance/time/patience/phone number to call and get help. Instead of giving them few minutes of help CSRs have to spend hours and hours with customers-who-are-always-right but in a sense customers-abusing-the-system.
There must be a set limit to how much customer is right. If there is no limit bottom line will suffer tremendously. You paying close attention to a select group of active customers while there is a huge number of regular folks fleeing the company and taking their subscriber fees to the competitor.
First off... there are alot of other factors involved in churn. Sure, some portion of the "churners" will leave because they had a bad customer service experience.
Churn numbers are pretty consistent across all the different providers (roughly in that 1.5 - 2.5% range). That, to me, suggests that there is a portion of the population that is going to switch every few years to take advantage of whatever the latest, greatest deal is.
As far as a SET limit to how much the customer is right. We'll have to agree to disagree on that one. Is there a limit? Yes.... somewhere. I've run my own business for 9 years now, and I've only reached that limit once and asked a customer to leave and not come back. There comes a point when you've done everything you possibly can and you know the customer will never be satisfied. I reached that with this woman. She wasn't seeking satisfaction as much as she just wanted things given to her. There are some who would seek to "abuse the system" (as you pointed out). Those people though are A) the ones likely to jump at a better offer and not really looking for "satisfaction". They just want concessions. There should be a set limit on concessions (that's a discussion for another thread, I think). There should NOT be a set limit on how long you treat the customer with respect.
And, finally.... Frankly, I don't think that having the "customer is always right" ATTITUDE (or, perhaps, better stated, the customer is most important attitude) is going to hurt the bottom line as much as it will help it. Will it result in spending more time on a customer? Probably. Will you lose some customers who are aggravated with long wait lines on the phone lines? Possibly, yes. But, IMHO, you'll keep more customers than you lose, which is good for the bottom line.