Mize was a proud sponsor of the 10th Annual Extended Warranty & Service Contract Innovations conference. The event was held in Nashville, TN from September 18th to September 20th, 2019. There were over 20 speakers from leading OEMs, Service companies, and Solution providers including but limited to AmTrust, Electrolux, Ford, GE, GM, Mize, OnPoint, Samsung, Stryker, and Stulz.
“Value” was a common theme that many of the speakers discussed during their presentations. We’ve taken the liberty of summarizing 5 of these key values in this blog post:
- Value of Demographic segmentation – Historically, Service Marketers have not placed a great deal of attention on demographic segmentation when it came to the design and promotion of extended warranties and service contracts. Instead, marketers relied on conventional wisdom which viewed that older consumer with more disposable income where the cohort group most likely to purchase these types of programs. However, a demographic research study conducted by Aleem Lakhani from AmTrust reveals that younger people and lower-income households are more likely to purchase extended warranties. Millennials also have a high willingness to look at options and they are not risk-averse as many may have thought.
- Value Drivers differ between B2C and B2B – A number of presenters discussed the value drivers for the customer when it came to purchasing extended warranties and service contracts. Within the B2C segment, the value driver for consumers is clearly the convenience and peace of mind that comes from having an extended warranty or service contract in place. However, the value drivers within the B2B space are much different, particularly in those industries where the consumer is not the original purchaser of the agreement. For example, in the Building Products Industry where the home builder may have purchased the extended warranty and included in the sale of the home. In the B2B segment, the value drivers are focused on the impact these programs have on increasing Customer Lifetime Value and improving the Service Experience.
- Value of options – Providing consumers with options was a recurring theme of many presenters. Within the extended warranty and service contract world, options often take the form of value-added services. For example, remote support, drop unit coverage, loaners, etc. Options can also take the form of subscription-based services or Products as a Service (PaaS) solution where the end-customer pays a “fee for use” as opposed to purchasing the product outright. These fees for use programs are often included with value-added services, insurance, and free upgrades to ensure continuous support and availability of the product, and continued loyalty to the brand.
- Value of IoT – Connected devices enabled by IoT solutions is proliferating at a rapid rate and GE is at the forefront of this growth. According to Eric Johnson from GE, IoT was originally implemented to obtain data on machine performance in order to build better products. Over time, GE understood the value of IoT to the brand in terms of providing a better customer experience, delivering better service, minimizing risk, and maximizing product uptime. From the consumer's perspective, the value of IoT is on convenience, peace of mind, and optimal performance. From the manufacturer’s perspective, the value of IoT is that it provides usage data, diagnostic data, and trend date which in term has benefit on improving diagnostics, reducing truck rolls, increasing consumable sales, lowering insurance liability and managing end of life replacements.
- Value of the Customer Journey - Chris Smith from OnPoint Warranty Solutions pointed out that sometimes consumers have a negative opinion of extended warranty programs. This can happen when the consumer learns that the program they purchased doesn’t cover a specific problem which in turn requires them to pay out of pocket for additional repair or replacement. As a result, the consumer may think they have been sold a bill of goods. To avoid this problem, Smith advised OEMs and Warranty providers to do a better job at aligning consumer expectations throughout the customer journey. In other words, they need to communicate to the consumer what’s covered and not covered within the program at every stage and touchpoint along the journey - from the purchase of the agreement, to request for service, to delivery of service, and to renewal.
OEMs and Warranty Providers can realize these five (5) values through the implementation of systems that manage service contracts and extended warranties. With the Mize Connected Customer Experience Platform and Service Contract Management (SCM) solution, companies can configure and sell service plans targeted to the needs are specific market segments and cohort groups. In addition, companies can offer options that include value-added and subscription-based services. By integrating SCM with Mize’s Warranty Management (WM) and Field Service Management (FSM), companies can ensure they meet both B2C and B2B expectations of value. In addition, Mize’s IoT Smart Blox enables companies to capture critical data from connected devices and perform necessary service transactions. Lastly, the Mize Connected Customer Experience platform enables companies to maximize Customer Lifetime value by engaging with customers during every step of the Customer Journey as they own and use their durable products for years after the sale.