Can Good Customer Service Reduce Lawsuits?


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Studies have shown that a consistently good, branded customer service experience can improve sales and profitability. Did you know the same is true for customer service and a reduction in lawsuits? A study by Hickson and Levinson, published in 2002 in the Journal of the American Medical Association, showed that doctors who gave good customer service and did so – especially when something went wrong, were far less likely to get sued than doctors who tried to avoid the issue.

A good customer service strategy doesn’t only reduce lawsuits for doctors, however. Read a few examples of people and or cities who sued, when poor service occurred.

  • When an individual bought her laptop at Best Buy in 2006, was informed a repair would take two to six weeks, and then after much follow up on her part, came to realize after four months, that the computer was missing. She was offered a $900 Best Buy gift card as compensation, which was less than what she originally had paid for the computer and warranty. So she sued them for $54 million dollars instead.

  • The city of Los Angeles sued Time Warner Cable after TWC made an acquisition that added more than 1.6 million subscribers to TWC’s 360,000-member Los Angeles base. In the midst of the transfer, the company allegedly failed to meet service level agreements.

  • Pat Dori, a disgruntled Dell customer who found no resolution to the issue of a broken laptop after five months and 19 phone calls, decided to go legal and sue the company for failing to adequately address the problem.

A consistent, proactive and branded service experience can improve sales, increase profitability, and yes … even reduce lawsuits. Review your firm’s lawsuits and ask yourself if any of them could have been avoided if a good customer service strategy was in place. In most cases, the amount it would cost to develop the service strategy and implement it would have been less than the lawsuit itself. Go figure.

Republished with author's permission from original post.


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