In a recent benchmark survey results from Strategies for Growth published by Warranty Week, 58% of Warranty professionals identified improving post-sales customer satisfaction as the main driver for higher levels of warranty performance.
Connected Customer Experience
Although technology - connectivity, analytics, sensors - has changed a lot and enabled OEMs to implement much tighter controls and detect fraudulent behavior, the general picture looks quite unchanged and warranty fraud continues to be a challenge.
The strategic importance of warranty management has increased and the general maturity of the warranty profession in the industry has improved during the past 15 years. However, the battle against warranty fraud continues to be a challenge for many warranty professionals.
Is warranty fraud an issue for us or not?
In our earlier blogs (“The Dark Side of Warranty Management”, “What is needed to control warranty costs and prevent fraud?”) we have referred to multiple client cases and several research studies, estimating fraudulent warranty claims to occupy up to 15 percent of the average company's warranty costs. However, averages are averages. Do you know the real situation in your company? In many cases we hear, that “warranty fraud is a major issue, but not for our company” or with slightly more awareness “we have a feeling there may be something wrong, but we don’t know the scale of the problem”. In any company with a large number (tens, hundreds or even thousands) of customers or service agents, a certain proportion of them will try fraud and some of them will do it in an excessive manner. Analytics, if done right, can be very impactful in getting the picture of the situation, either by uncovering anomalies, suspicious behavior and direct malpractice or giving confidence, that the situation is under control.
When processing warranty claims, Warranty Processors and Service Providers resort to Emails, Phone calls, and even Fax to exchange information about the Claims. Streamlining the communications and data exchange benefits all stakeholders:
Service Contract renewals are vital for a steady stream of service revenues. Renewal Rate is also a key performance indicator for service revenues, customer satisfaction, and customer loyalty.
Warranty obligations represent both an expense and a liability to Original Equipment Manufacturers (OEMs). As a result, anything that an OEM can do to minimize warranty expenses and liabilities will have a significant impact on the balance sheet and bottom line. In the high-tech industry, warranty coverage often includes repairing defective products as opposed to crediting or replacing them.
Warranties of this nature involve three (3) cost components: 1) Warranty Terms & Conditions, 2) Service Delivery, and 3) Product Reliability and Maintainability.