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We are spending too much on free customer- Rate Please [#permalink]
13 May 2012, 19:26
"We are spending too much on free customer service after a sale has been made; we need to limit our warranty to two years in order to improve our profit margins. The current lifetime warranty can lead to costs decades into a product's life cycle. Also, we pay our customer service employees a premium because they must possess expert skills across the entirety of our very diverse product line, including products we no longer sell."
The argument claims that limiting the warranty provided on the products would be a cost effective solution and would turn profitable for the company. However, I cannot agree with the author for the following reasons.
Firstly, the argument states that warranty should be limited. What if the customers purchasing the products now are purchasing them because of the warranty provided on them?. If the warranty on the products is decreased there is all chance that the sales of the company would get impacted.
Secondly, the argument also states that customer service employees are paid a premium because they must possess expert skills across the entirety of diverse product line, including products that are not currently sold. Having knowledge of complete product line is very essential to a customer service employee because this gives an edge for the company in planning it's future products.
In summary, the argument is based on unsubstantiated premises and unproven assumptions. To evaluate an argument, it is important to evaluate the contribution of all factors which can affect the conclusion. The argument fails to consider the effect of several key factors such as positive customer response to free customer service, a suitable substitute to lifetime warranty, if any, and an alternative to higher paid customer service employees. Though the argument may have some merit, unless the argument succeeds in explicating these factors, it represents more of a wishful thinking than logical reasoning.