An extended warranty program is crucial to the success of a company within the mobility space. Not only do returns, damage repairs, and other warranty claims offer an opportunity to provide exceptional customer service, they also improve the profitability of your company. Through improved operational efficiencies, recurring revenue, and a loyal customer base you can move your warranty program from a hassle (and lost profits), to one of the most secure revenue streams for your business.
If you’re not already seeing the return-on-investment (ROI) of your extended warranty program, here are four spot-checks and tips for improving it going forward.
4 Ways to Improve the ROI of Your Extended Warranty Program
1. Utilize a warranty management software (WMS) tool
A WMS tool enables you to file, update, manage and track all warranty related claims. Through a database of all warranty sales and service related information, you will be able to track:
- Customer information
- Contract details
- Historical sales vs. claims of a single customer
- A real-time summary of all claim histories for your program on specific products
With access to all of the data within the tool, it will be much easier for you to find where your biggest pitfalls are, and how to fix them. This is such an important component to improving your ROI, that W3 Solutions has our own patented software that is included with every warranty program. It includes self-service online claim management, automated and real-time tracking of service and claim incidents, and automated dispatch and tracking of technicians. You can request to experience the software yourself here.
2. Track and analyze the data of warranty claims
Once you’re working with the right WMS tool, you should start taking note of the kind of analytics you should be tracking for your company.
Ideas for reports that you should create include:
- Daily warranty claims made per product
- Merchandising and sell-through reporting
- Claim forecasting for next day, week, month, etc.
- End-of-month reporting broken down by customers, claims, products, etc.
By forecasting and creating daily reports, you will be able to keep track of future expenses that could affect your profitability. You can ramp up the sales of warranty programs as needed to offset any costs you are predicting
3. Streamline your shipping operations for returns
Shipping is an important component of improving the ROI of your warranty program. Leveraging multiple carriers and tracking visibility can reduce inefficiencies and improve your overall profitability. Make sure to monitor the shipping costs of incoming claims as well. Logistically, this can be a challenge though. Make sure that you also consider outsourcing to a warranty company that would have these systems currently in place to help lighten your load.
4. Train and incentivize your sales team
Much of the success of a warranty program is attributed to your sales team. When a warranty program launches the team goes through a training session, but additional sessions are few and far between. Arm your sales team with the information they need to sell your warranty program effectively. Educate them on product launches, and how the warranty benefits new phones. Quiz them on the details of the warranty program, and award those with the most knowledge. Encourage sales success by incentivizing with rewards. Your sales team has direct contact with your customers and are the gateway to greater revenue, so utilize them as much as you possibly can.
With the right tools, data, operational tactics, and sales training, your warranty program can be a successful and strong revenue stream for your mobility company.
What other tactics are you using to keep your warranty program profitable?