By Lisa Johnston
New products on display at the American International Toy Fair, held in N
The Importance of After-Sales Service for Home Appliance Manufacturers
A great brand name is among the most powerful forces in business, yielding happy, satisfied (aka loyal, repeat) customers who can serve as brand advocates, and who can also attract others to purchase.
This is particularly true for home appliance manufacturers, whose natural inclination is to focus on activities like pursuing next-generation products, innovative features, styles and functions. Indeed, these efforts help drive profitability since they reduce competitor threats, justify premium prices and set the stage for product launches.
Yet the long life cycles of major appliances, not to mention the monetary investment made by consumers at purchase, make the case for continuing the brand/customer relationship well beyond the sale.
Studies have shown that the most profitable period in a home appliance customer’s life cycle begins in the third and fourth years post-purchase. Customer loyalty accrues over time with each successive brand interaction - for example, the homeowner who purchases a dishwasher, then has it serviced every two or three years.
As such, brand loyalty is only as strong as a customer’s last encounter. Thus, the war for customer allegiance - the Holy Grail for brands - is won one battle at a time, and across the product lifecycle.
On the other hand, every time a brand loses a long-tenured customer, the cycle begins anew.
Fortunately, there are ways to retain customers’ allegiance in order to move them up the value chain.
One strategy is to plan for a product’s inevitable obsolescence by outsourcing parts repair. Some independent remanufacturers (CoreCentric Solutions is one) can repair parts for older, legacy appliances that are discontinued or no longer available, and in as little as 48 hours. Such outsourcing allows appliance manufacturers to reduce costs and sharpen the focus on core competencies.
Indeed, it’s frequently the relatively small fix, along with a manufacturer’s ability to validate the trust placed in its brand that can positively influence a customer’s brand fidelity.
We heard about a Boston attorney whose $3,000 wall oven stopped working two months after the unit’s warranty expired. When contacted by an appliance repair person, the manufacturer logically explained that the model had been discontinued and parts for the electronic panel were no longer available. Luckily, the repair person knew about our return-for-repair service, and for less than $250, the customer had his faith renewed in the brand.
Since it costs five to ten times more to acquire a new customer than it does to retain one, investments to ensure customer satisfaction are more than justified. Those manufacturers lacking the facilities, staff or internal support to adequately service their legacy appliance lines may find that it’s worth investing in a strategy that will improve customer relationships and ensure satisfaction with the brand.
By implementing such a strategy, the point of purchase can be a start, not an end, to retaining and growing a brand’s base.
Donna Barbic is Vice President of Sales and Marketing at CoreCentric Solutions, Inc. (www.CoreCentricSolutions.com), provider of customized product and part lifecycle management and remanufacturing solutions to retailers, appliance manufacturers, and servicers worldwide. She can be reached at 630-216-5050 or email@example.com.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.