Warranty: An Overlooked Key to Service Business Success
“A customer is never out of warranty even if [their] product is.” – Seth Godin, best-selling author of This is Marketing
What defines service business success? For many, it is achieving superior levels of customer satisfaction while managing operating costs and profitable growth, which are often considered adversarial in nature – an operating methodology the Service Council™ has termed Smarter Services™.
In a previous benchmark survey conducted by the Service Council on service revenue, nearly 3 out of 4 (73%) service executive respondents indicated:
- Warranties were not included in service revenue calculations.
- Warranties represented less than 10% of service revenue generated.
- Company didn’t offer warranties altogether.
Are warranties being overlooked in terms of their potential contribution to revenue and profit?
According to Warranty Week, customers spend $2 trillion (with a “T”) in warranted product sales on owned assets. Beyond the potential revenue contribution, warranties are also a critical opportunity to enrich channel and customer experience while reducing operational costs. If not managed and administered correctly the result can include:
- Inefficient and manual claims processing driving up operating expense.
- Weakened collaboration amongst extended service network (dealers, channel, etc…).
- Supplier cost recovery challenges (entitlement challenges).
- Delayed warranty claims processing resulting in poor customer satisfaction (CSAT).
- Fraudulent claims (a rising concern amongst extended service networks).
- A diminished perceptive for the original equipment manufacturer.
Watch this On-Demand webinar with CNH Industries and Syncron to examine the role warranties (new and/or extended) can play in contributing to superior levels of business and customer success.