What do you cover with your Extended Warranty and Extended Service Programs?
Blumberg Advisory Group and G35 Software partnered to conduct a study among professionals involved in selling Extended Warranty /Extended Service (EW/ES) programs and asked them about Processes Covered and Resources Provided by their programs. Here is what their responses indicated:
- Almost all Extended Warranty and Extended Service (EW/ES) programs cover Corrective Failure (e.g., Break-Fix)
- Half of the respondents indicate their EW/ES programs cover preventive failure
- Approximately one-third also cover planned inspections, recalls, calibration, remote support
- Resources provided as part of an EW/ES program typically include Remote Support, Onsite Service, Spare Parts
- Less than 60% of respondents have any type of performance guarantee as part of their EW/ES program; most frequently indicated guarantee:
- Response time for onsite
- Parts Shipment Time
- Response time for remote support
Results of this study that includes many other questions on Service Contracts are summarized in the Best Practices in Marketing and Selling Extended Warranties. You can download this white paper compliments of Mize, the leader in Service Contracts Management Software.
The study further found that the EW/ES program configuration plays a critical role in influencing attachment and renewal rates. The truth is that customers will purchase these programs if they feel that they will effectively meet their needs. That is why it is important to specify what is included in the program from the perspective of features, resources, and coverage.
The Configuration refers to the length of coverage, level of customization, processes engaged and resources employed in delivering the services, and entitlement levels offered. The survey results suggest that the more distinctions a company can make about its EW/ES program, the more likely customers will be to purchase it.
You can also join a Webinar hosted by Mize with presentations from Michael R Blumberg, president of Blumberg Advisory group and Eric Arnum, Editor of Warranty Week on “Best Practices to Grow Service Contract Sales.” Register Now.
When you offer different program configurations, it also very important that you have a flexible and robust Service Contracts Management software to configure, price, administer and analyze these programs. You cannot rely on spreadsheets or manually intensive processes.
In Summary, for you to grow service contract revenues, and increase attachment and renewal rates, you need to:
- Offer service program configurations that meet your customer needs
- Adapt Best practices to market and sell these service programs
- Implement software that enables you to Optimize Service Contracts Management