Most durable goods manufacturers are mired in manual service contract administration – from initial offering to servicing, through to renewals. While being a strain on operations, it’s a drain on revenue stream maximization: most OEMs realize less than 15% of potential service contract revenue.
The typical cause of this is an environment of multiple systems and databases housing relevant information, each requiring repetitive information keying. This also creates a lack of each contract’s status, touchpoints, customer engagement, and P&L visibility. Operational costs rise while income opportunities fall.
For OEMs selling through distribution or reseller channels, there are even more complications. Manufacturers struggle with attach rates with a degree of customer separation. Also, when service programs are offered, initial Service Contract sales rates remain low, mainly because the channel partner’s focus is on initial product sales and a lack of offerings beyond standardized warranties. This causes customers to either miss the first opportunity to buy a contract or not value a stock contract versus one tailored to their needs and expectations. Considering contract servicing, whether an OEM has their service team, outsources, or utilizes a hybrid of both, lack of knowledge and parts access further complicates operations and customer’s confidence in the product brand.
Going back to the root of these problems, a single source of information management provides the solution for contract operations and revenue optimization.
Here’s a workable answer: automating the entire Service Contracts Management (SCM) lifecycle, from the initial sale, all service touchpoints, and renewals/upsells of Extended Warranty, Maintenance, Subscription, and Service Programs. This engages OEMs, Third Party Administrators, Resellers, and Service Partners uniformly to create, sell, administer, track, and analyze service programs, with every step visible and controlled by the OEM to simplify operations, reduce costs and maximize revenue for all parties involved.
Choosing an automated SCM platform provides manufacturers the ideal opportunity to revaluate their processes. As they configure their configured, integrated single-source system, they’ll uncover many legacy practices that they’ll want to update, aligning with their current and upcoming marketplace conditions.
Here are components and functionality to review:
Policy Management – Service Plan offers, terms and conditions, priced according to demand.
Sales and Marketing – Data hygiene for customer’s current contact information, automated marketing/email campaigning, and content management with invitation control for new solicitations, reminders, and renewals, flexible email trigger configuration maintenance, and direct mail file generation and export or API to 3rd party mail house vendors.
Contract Sales – Website links and landing page development, customer self-service plan inquiry, selection, and purchase, telemarketing desktop app, plan pricing availability query by product model and purchase/registration date, and provision to input promotion code and present offers for specific resellers and their customers.
PCI Compliant Plan Payment Process – Payment gateway integration, including credit/debit card process, pay in full or monthly installments options, expired/credit limit issues management, with email notifications and link to update and verify card details.
Service Administration – My Customer Portal for self-service, consumer validation of service plan terms and conditions, consumer online service request for self-service, consumer validation of service plan terms and conditions, consumer online service request, and appointment booking with a qualified authorized service provider. This is a strong trend – customers expect this capability.
Also encompassed are customer telephony system integration, complete jobs dispatch management, with job authorization process from technician mobile app, and Service Parts Management – addressing needs for parts ordering via an app with supply partner integrations.
Claims Administration – Service provider claims submission and rules validation, and embedded logic for product replacement or buyout-versus-repair designation.
Analytics – Track revenue generation, including Attachment Rates, Renewals, Non-Renewal, Claims Severity, and Plan Profitability, with dashboards and user-defined custom report generation.
OEM’s considering automating their Service Contracts Management can have a real-world look at how this is accomplished. Contact Mize and request a demo today.