Eric Arnum is the editor of Warranty Week, an online newsletter for warranty management professionals. Since 2003, Eric Arnum has been publishing reports on product warranties, extended warranties, and claims rates in various industries. Warranty Week has gained a broad following among manufacturers, retailers, servicers, and insurance professionals.
Connected Customer Experience
Benchmarking warranty performance can be a very valuable exercise to gain an independent perspective on how well you are doing compared to other companies. Bill Pollock, President & Principal Consulting Analyst, Strategies for Growth (SFG), has been doing a Warranty benchmark survey for few years and currently conducting a Benchmark Update Survey for 2019. Mize Warranty Insights caught up with Bill to learn more about the Benchmarking survey and process.
Replacement Parts cost represents 60% or more of the warranty claim expense. Studies indicate that up to 15% of the parts cost is excessive resulting from:
- replacing good parts leading to NTF (No Trouble Found) issues
- replacing parts when they can be repaired at a lower cost
WSJ article on annual logistics report finds:
- Costs for freight have risen steeply since the middle of last year because of rising interest rates, higher price of fuel, and driver capacity constraints
- Average freight rate per mile have risen between 20% and 30% so far this year
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.
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.