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Home >> Retailing >> Retailing >> Warranty Providers Kick New Year Innovative Programs >> Warranty Providers Kick Off New Year With Innovative Programs
Against the backdrop of a weak economy, slowing CE sales and falling product prices, extended-service-plan providers are beefing up their staffs, adding new infrastructure, and introducing fresh programs and services to support their retail clients and attract and assist consumers. Here's a look at some of the latest doings across the extended-warranty field.
Sterling, Va. — No grass is growing beneath NEW Customer Service Companies. In addition to last month's acquisition of ServiceBench, the Web-based service management solutions provider (see TWICE, Jan. 28, p. 5), NEW has introduced two new efforts: its Service 360 platform and ecoNEW, a trade-in and recycling service.
The former is a seamless service solution designed to guarantee the customer "an outstanding service experience from beginning to end," the company said. Service 360 begins with over-the-phone troubleshooting, which can often eliminate the need for a service call and can reduce product returns. For situations that do require in-home service, Service 360 gives customer care representatives a fully integrated view of servicer schedules, allowing them to schedule most in-home service calls during the first call. Service 360 then provides NEW's service management team with real-time updates of service events, which promotes faster resolution and allows customers to be alerted to any unexpected delays.
Finally, external customer satisfaction surveys are employed to measure customer satisfaction and service delivery, and the results are used to continuously improve the service experience.
Separately, ecoNEW was launched to help consumers get rid of their older, unwanted CE products while providing an easy-to-use, environmental solution for e-waste recycling. "Given our involvement in the service plan industry, it was a natural fit to bring a solution to market that would safely reduce e-waste and open up channels for parts," said Tony Nader, president/CEO of NEW
Here's how it works: After consumers enter information about their electronic item, ecoNEW places a trade-in value on the product and provides the consumer with a prepaid shipping return label to ship the item in for verification. Once NEW confirms receipt and audits the item, a retail-branded gift card for the trade-in value is sent to the consumer. Items with no trade-in value can be processed as recycled items, and all equipment will either be reconditioned or recycled.
The upshot, said Nader, is that ecoNEW enhances the retailer's image as an environmentally friendly corporate citizen, generates additional revenue for retailers with virtually no effort or cost, gives customers trade-in value for their CE products, drives customers back to the retailer to purchase more products with retail-branded gift cards, and safely recycles unwanted CE products.
Cleveland — AMT Service has launched its Protect-it card program, making extended-service plans (ESPs) more readily accessible to retailers and convenient for consumers.
Designed to draw consumer attention on the checkout line, the cards are packaged much like standard plastic gift cards in eye-catching colors. The bottom portion snaps off to fit in the customer's purse or wallet for future reference, and the hangtag contains all of the information needed to register a purchase or file a claim.
Protect-it requires little involvement from retailers, as AMT fully administers the program and provides dealers with guidance, program evaluation and sales-training support, the company said. Moreover, since the cards carry only the generic Protect-it brand, retailers can promote them as their own.
"Retailers that aren't familiar with how ESPs are implemented may view them as cumbersome, so we wanted to bring a very practical program to the market for new and current customers," said AMT president Bruce Saulnier.
The cards come in three general varieties — replacement programs, repair plans and coverage for accidental damage from handling — and are available for various term lengths and product price tiers. Cards also cover specific product categories including consumer electronics, appliances, desktop and notebook PCs, digital cameras and camcorders, lamps and bulbs, and plasma and microdisplay TVs.
AIG Warranty is providing retailers with the tools they need to goose attachment rates during the current sluggish sales environment.
"Retail has not really been the greatest and the first quarter is going to be real tough," said division president Matt Frankel, citing the weak economy, stock market volatility and the uncertainty that comes with a close presidential race.
To help retailers sell more contracts during a challenging cycle, AIG is "going back to basics," Frankel said. "We're focusing on communication, training and promoting value to the consumer."
Another tool in AIG's arsenal is price banding, which compensates for price erosion in categories like computers, MP3 players, gaming, digital cameras and camcorders, and flat-panel TV by providing service plans in multiple price tiers. "This ensures that there's always a price-value relationship to talk to the consumer about," Frankel said.
Despite the soft economy, Frankel sees some positive trends, including the coming analog shutoff next February and the tendency for cash-strapped consumers to divert their discretionary dollars to home entertainment in lieu of vacations or dining out.
Iselin, N.J. — In a major addition to its management team, industry veteran Michael Green has joined RepairTech as business development senior VP.
Green is well-suited to RepairTech's service-oriented culture, the company said, and brings more than 30 years' experience in the imaging and consumer electronics industries and a background in sales and marketing, import/export, and wholesale and retail.
"We know Michael's reputation and we are confident that his leadership and know-how will round out the service-oriented personnel we already have on board," said RepairTech CEO Joseph Saieda. "I am certain that Michael will be a significant contributor to our goal of bringing RepairTech to a new level of service with emphasis on the consumer."
RepairTech described Green's background as a "natural complement" to its own corporate credo of delivering personalized and professional service. Among its innovations, RepairTech introduced the industry's first digital camera loaner program, helped transform the market by implementing no-charge shipping terms, and helped make free annual camera cleaning and inspection a new service contract standard, the company said. More recently, it introduced an instant replacement card that allows consumers to circumvent repair centers.
Middletown, N.Y. — Bankers Warranty Group (BWG) is moving ahead with plans to open a new state-of-the-art call center facility in St. Petersburg, Fla.
The new call center is part of Bankers' strategic plan to increase its customer-servicing capabilities in line with its planned sales growth. The company has enjoyed double-digit sales growth over the past two consecutive years, it reported, and recently returned from one of its busiest International Consumer Electronics Shows in years.
"We have had an unprecedented level of interest in our programs and services, resulting in many positive discussions with some of the country's top retailers," said Kevin Rupkey, president and CEO.
In other news, BWG of Canada has appointed Carmen Sirianni to the position of sales director. Sirianni brings more than 25 years of experience working with Canada's leading CE retailers, and will be instrumental in executing BWG's aggressive growth plans for the Canadian marketplace, the company said.
Chicago — The Warranty Group has introduced two new ancillary products to help generate additional gross revenue for its retailer, vendor and affinity program clients.
The first is an identity-theft product for notebook computers that serves as an enhancement to traditional break/fix coverage. The program provides compensation for compromised data, and can also be bundled with unlimited data backup service and remote location tracking. Michael Frosch, president of the company's North America consumer products division, said the identity-theft product responds to consumer concerns over data integrity, and addresses falling price points on notebook computers. The product can sell for $79 to $99/year, and provides gross margins comparable to those of traditional extended-service plans while delivering an added benefit to consumers, he said.
The second introduction provides monthly repair and replacement coverage on currently owned major appliances. The plan covers embedded washers, dryers, ranges, refrigerators, dishwashers and microwave ovens, estimated to be in the hundreds of millions, and can create additional monthly residual income stream for dealers. "We cover the repairs, and if it needs to be replaced, the sale goes to the retailer," Frosch said.
With locations in 33 countries, The Warranty Group is the world's largest single-source provider with some $5.4 billion in assets. The company enjoyed significant growth last year following its spin-off from AON, and is benefiting from a "flight to quality" as retailers, manufacturers and third-party administrators seek underwriters with the infrastructure, analytical skills and financial wherewithal to back their programs for the long haul, Frosch said.
Norcross, Ga. — Warranty Corp. of America (WaCA) anticipates the changing economic conditions to spur sales of extended-service plans.
According to the company, consumers are thinking more carefully about purchasing high-end appliances and electronics and are drawn to service plans and their peace-of-mind benefits to protect their product investments.
The trend would drive further retail sales of WaCA service-plan programs, which enjoyed significant growth last year, the company reported. WaCA attributed the gains to its "channel expertise, field training and innovative merchandising solutions," which are driving higher attachment rates, and the company's commitment to consumer service and technical support.
In addition, WaCA expanded its coverage of digital cameras, MP3 players, gaming systems and high-end majaps with major retail clients during the fourth quarter of 2007.
WaCA said it is investing in expanded client services, new product development and advanced technical support capabilities to support growing demand.
Fairfax, Va. — There is more to be reaped from extended-service plans (ESPs) than just an incremental revenue stream.
According to ServiceBench, a provider of Web-based service management solutions, extended-warranty programs can also serve as a valuable business intelligence tool that can help improve products, enhance brand loyalty, build better relationships with customers and provide buyers with product reliability data.
One way for companies to fully leverage their ESPs is to share warranty-service data with their product development teams. "Sharing critical product intelligence enables organizations to identify issues early in a product's lifecycle and make improvements in a timely manner," explained Michael Bailey, ServiceBench's extended-warranty solutions director.
Service-repair logs also represent a valuable resource that's ripe for mining, as they can often reveal a solution for a failed component or a product performance issue based on past experience.
Automated service management solutions can also help streamline the repair process itself and reduce operating costs by revealing critical patterns that are often hidden within the service supply-chain, Bailey said. Similarly, data mining can provide sales new opportunities by identifying customers who did not purchase service contracts or those whose contracts are expiring, and can companies develop marketing campaigns based on customers' demographics, geography and buying habits.
Bedford, Texas — Warrantech Consumer Product Services announced several new partnerships that will allow it to bring more services to medium-sized and smaller retailers as they compete with big-box retailers.
New client additions include Support.com for computer support services, CEI for home theater installations, and MyStar for cellphones, with additional partnerships to become effective in the second quarter.
In other news, Neal Bobrick, a veteran of Monster Cable and Ultimate Electronics, will join Warrantech this month as retail and manufacturing sales senior VP.
Looking ahead, the company, now in its 25th year, expects to maintain the sales momentum it has enjoyed over the past two years as it continues to invest in its claims center and boosts its customer satisfaction ratings. "The fourth quarter was good for us," said president Sean Hicks. "We're still seeing very high penetration rates on LCD TV units, which are offsetting some softness in the appliance category."
Atlanta — Assurant Solutions continues to build out the organization with new products, clients, facilities and personnel amid growing market share gains.
On the product front, Assurant has partnered with Absolute Software to bundle Computrace LoJack for Laptops with extended-warranty programs for notebook computers. LoJack for Laptops is a software-based theft recovery service that tracks, locates and recovers stolen notebook or desktop computers.
Meanwhile, the company's international footprint recently expanded with the additions of Best Buy Mexico and Wal-Mart Puerto Rico and Canada, and Assurant is presently working through implementations of two new clients that have joined the roster.
To support its growth and create superior customer experiences, the company's Dallas Solutions Center recently relocated to an upgraded facility in Addison, Texas, that features a state-of-the-art wide area network (WAN) and space for 176 customer service agents.
On the personnel side, Sofia Shosh has been promoted to point-of-sale marketing VP, reflecting the success of the Strategic Performance Management training program, which has enabled retail clients to grow their attachment rates year-over-year.
In addition, Assurant continued to grow its product development capability by appointing 15-year industry veteran Samantha Jones VP, by hiring certified product development experts to lead the effort, and by "significantly" increasing investment in new product research, the company said.
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.