Understanding the relationship between cost reduction and customer satisfaction within a warranty context

Abstract

This study contributes to understanding observed patterns between cost efficiency initiatives and customer experience in after-sales service contexts. The aim was to examine whether customer satisfaction changed during the period in which cost reduction initiatives were implemented within the warranty department at Volvo Cars, and to identify factors associated with satisfaction and dissatisfaction in war- ranty handling by analysing customer pain points. A case study at Volvo Cars was conducted using a mixed-method approach with an exploratory sequential design, combining qualitative analysis of survey data with subsequent quantification. The findings indicate that the share of positive comments in the analysed sample showed a slight increase from 41% to 44% between 2024 and 2025. Since no statistical sig- nificance analysis was conducted, this change should be interpreted as an observed pattern rather than evidence of a statistically confirmed increase. Five pain points were identified, primarily related to compensation coverage, warranty process han- dling, and communication. Two of these were particularly prominent, one of which accounted for nearly 50% of all comments in both years, while another showed a decrease by 30 percentage points in negative sentiment. The study does not identify a short-term decline in customer satisfaction during the period in which cost reduc- tion initiatives were implemented. However, the results highlight the importance of continuously monitoring all identified pain points, as lagged effects may appear be- yond the timeframe of the study and new risks may emerge if further cost reduction initiatives are considered in the future.