I was recently alerted to an article in the Detroit Free Press about a woman who is suing car maker Honda in small claims court instead of via a class action suit because certain of their hybrids allegedly do not get the gas mileage claimed because of technical problems.
Now, the idea of averting class action suits is an interesting subject of discussion, but that’s not what caught my attention in this story. My bigger takeaway is “Why would Honda let it come to this?”
As a business, large or small, your customers are your lifeblood. Plus, with so much competition abound, customers have myriad choices for virtually every product and service. So, if you have made a mistake- or if your customers perceive that you have made a mistake- here’s a novel idea: fix it and make them happy.
For Honda, a class action lawsuit wastes tremendous money in legal fees and is a time distraction (and probably a PR distraction) for the company. Most importantly, it doesn’t make the customer happy and risks losing that customer, not to mention the friends, family and network of that customer. The lifetime value of a customer for any company, particularly a car company, is very high and valuable. Think about how much money Honda spends advertising to get new customers that could instead be spent saving their relationships with existing customers upset about this problem.
99% of customers are reasonable. If Honda would have reached out to them and worked with them, they would have been able to find reasonable solutions, create happy customers and stay out of court.
If you have an issue that’s making customers unhappy, the best business decision is to bend over backwards to keep them raving fans. As a business, the goodwill you generate from doing that will more than compensate for any costs involved in doing so in the long run.