Page 24 - QUALITY Magazine (Volume 03 - Issue I)

Customer Attrition and automobiles or drugs, can topple the bottom line
Decreased Sales where the company could lose millions, or even

Sacrifices in quality cause customers to churn billions, overnight. Besides, cases of recalls might
and reduce sales because people will move to result in legal repercussions because consumers
competitors’ products when they are unhappy. can sue the firm responsible for the products that
This paper will also show that the market share have been recalled. For instance, the Takata airbag
is likely to reduce particularly in those with low is a good example of how recall can be costly and
switching costs as unhappy customers are likely can strain the firms’ financial ability to the tune of
to make the switch. Customers’ poor experiences billions of dollars. Economic effects assume not
not only would not buy the same product again only material damage as quantitative losses but
but also bad mouth it, convincing all those around also impact the quality aspect by reducing brand
them to avoid purchasing the product from the trust and eliminating sales from the subsequent
brand. Conflictingly, in a competitive industry, periods. To avoid these risks companies, need
customers always have other choices and could to implement and maintain quality assurance
shift to the other side and switch businesses if programs that involve regular product inspection.
they always experience quality problems. They Proper quality control reduces recall exposure and
have direct impacts on the level of turnover and saves the brand image from legal action and its
may be aggravated by adverse word-of-mouth financial consequences, which in turn guarantees
communication from customers. Customer better financial stability (Consumer Reports, 2023).
retention means that firms have to understand
customer needs and provide quality products Increased Cost of Customer
meeting these needs in addition to standard Support and Remediation
customer service. Also, any product or service This means that every time a firm experiences
provision feedback systems that are implemented quality issues, it ends up receiving more complaints
can assist organizations to solve problems that may from its customers, making the cost of repairing
cause customer dropout. But above all, it must be relations to be high. Consumers have expectations
remembered that high quality is proven not only to to seek service when they get the wrong product
keep clients satisfied but also to safeguard market or poor service delivery, which puts pressure
share and avoid a loss in revenues. Therefore, for on the customer service department. Such
firms to sustain themselves and be competitive, changes bring about an increase in the volume
they should focus on quality assurance to avoid of complaints, which in turn imposes greater
the nightmares that water customers with boasts costs on firms in terms of addressing customer’s
that will discourage brand loyalty and affect their grievances, accepting returns, and replacing
cash streams as well (Plaksij, 2019). defective goods. The literature also suggests that
high support costs are likely to reduce the profit
Financial Losses due to Product margins because more operational cost is incurred
Recalls and Liability to address quality problems. Also, a stressed

Recall due to product quality issues normally support team will compromise service quality
results in high costs associated with the recall hence increasing customer waiting times hence
process together with the effects on brand image. customer dissatisfaction. Organizations have the
When products are in some way defective or responsibility of putting down a good quality
unsafe, organizations must organize the logistics control to reduce those slips thus reducing the
of a recall process and then compensate their pressure on the customer support. The key tangible
customers, possibly having to replace the recalled benefits include Early detection of defects which
products. These expenses can add up very quickly controls future support costs, fast identification
and put enormous pressure on employees’ and resolution of issues, which boosts customer
wallets. Recall of large products, including those in satisfaction. By avoiding quality problems