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Extended-Warranty Providers Improving Service, Programs To Counter Cool Economy


Extended-service plan (ESP) providers
are rolling out new programs and services to help retailers
offset choppy demand and contracting price points on CE
and appliance products.

Chief among those barreling into the New Year with a
barrage of innovations is


. The nation’s largest service-
plan provider is leveraging the latest technologies —
including in-store shopping tools and point-of-sale (POS)
assortment searches — to help retailers increase attachment
rates and build positive customer relationships.

“We live in a connected world, and it is important that
we leverage technology to reach the consumer along their
path to purchase,” said NEW CEO Tony Nader. “Whether
it’s an entry in our blog [

], an
article about the benefits of protecting purchases on our
website, tips and tricks posted on our Facebook page or
Twitter, a video on YouTube, or an SMS text dialogue with
a consumer, we are dedicated to using technology to help
consumers make informed purchase decisions.”

In recent years, NEW has used a variety of online and
social-media tools to educate consumers about the benefits
of extended-service plans and to counter what the
company described as “confusion and misinformation”
stemming from some consumer media reports. This year
NEW has extended that digital relationship with quick response
(QR) code and SMS programs. The former allows
in-store consumers to conveniently access key service
plan details through their mobile devices, including pricing,
promotions, features, and benefits, by taking a snapshot
of the 2D barcodes displayed on targeted in-store
signage and marketing materials.

Similarly, the texting initiative allows consumers to access
additional service plan information through their mobile
device by entering a key word displayed on in-store
signage and texting it to a specific five-digit code.

“With these technologies, we have increased our accessibility
to consumers during the most crucial step of
the buying cycle,” said sales, marketing and product development
VP Rob DiRocco. Coupled with the company’s
around-the-clock online and over-the-phone customer
service, “We continue to be able to provide consumers
with outstanding customer service and product protection
‘Anytime, Anyplace, Anywhere.’ ”

NEW has also introduced a proprietary audit application,
or “spider,” for retailers’ POS systems that recognizes
products that qualify for service plans when they are
scanned at the point of sale. The “spider” also performs
an ongoing audit of dealers’ product catalogs in order to
keep current with inventory changes and fluctuating price

“Using this tool, we have been able to identify up to 790
percent more SKUs that qualify for service plans,” said
Brian David, VP and general manager of Internet services
for NEW. “If neither the cashier nor the customer knows
that a service plan is an option, the consumer isn’t going
to buy it. This program allows us to catch those missed
opportunities and ultimately increase sales.”

NEW said the audit technology has been implemented
against the product catalog databases of many of online
clients, and recently has been implemented with in-store
register systems at several additional partners.

Service Net

is similarly leveraging innovation to drive
further growth this year following an already heady 2010,
when revenue rose 20 percent, the company earned an
industry-leading A+ rating by the Better Business Bureau
for a fifth year, and 39 new clients came aboard.

Service Net president Chris Smith attributed the
achievements and historically high attachment rates to
a sustained focus on the lifetime value of the customer
relationship, the differentiation of clients’ programs to fit
their unique needs, and the ability to engage the customer
through marketing and provide a positive experience.

“It’s critical to develop a client’s program around their
unique needs,” Smith noted. “It’s not just about providing
a unique offer, but the flexibility to provide a customized
structure and process that supports the offer.”

Also driving growth was consumer demand for accidental
damage coverage on mobile electronics; new products
covering mobile phones, e-readers and tablet PCs; innovative
services such as subscriptions, theft/loss and data
back-up that add a new dimension to service contracts;
and more frequent price optimizations to meet dynamic
price changes in the marketplace.

Service Net also forged a new partnership with underwriter
Chartis Warranty, and continues to improve
the customer service experience as demonstrated by its
customer portal,, a branded website
where customers can, among other tasks, access or renew
their service plans, update their personal information
and make a claim.

Added Smith, “This past year marked a major milestone
of growth and provides a foundation as the
service contract industry is redefined in the upcoming
years. Retailers, service providers and
OEMs will continue to change at a more rapid
pace and demand more from warranty providers
to customize their services and focus on the
enhancing the lifetime value of the customer



’ U.S. warranty division is
also starting off the New Year with a head of
steam, beginning with a new president. Service
Net veteran James Mostofi took the reins of the
insurer’s U.S. warranty and extended warranty
insurance group in November following 10
years with the service plan administrator, where
he variously served as general counsel, chief
financial officer and most recently chief operating

“We are thrilled to welcome Jim to Chartis,”
said Charles Williamson, president of Chartis’
U.S. Consumer Lines segment. “He brings the
distinctive blend of a seasoned warranty professional
and experienced business executive
to lead our organization.”

In his new role, Mostofi will have numerous
tools at his disposal, including innovative new
products such as customer loyalty warranties,
product refresh coverage and a product buyback
program introduced last month by Best

Mostofi will also have momentum in his favor,
following the addition of more than 40 new and
indirect clients in 2010. To date, Chartis has
more than 75 million active service contracts in
the U.S., and plans to up its worldwide operations
from 50 to 60 countries this year.

Also coming off “a great year of growth” is online
service plan provider SquareTrade, whose
roster of e-commerce clients includes Abt
Electronics,,, Crutchfield
and Vann’s. The 12-year-old company has
also added its first OEM customer, launched
with Citibank, Discover and, and is
working with educational institutions including
Seton Hall University to provide coverage for
iPads and other tablet PCs that are given to all

SquareTrade was also the top “What’s Hot”
utility on the iPhone App Store, and now has
specialized solutions for the iPad and Android
platforms as well.

What’s more, “Many of our online retailers
are starting to have attach rates close to those
that traditionally have only been achieved via a
sales-person driven culture in a store environment,”
president/CEO Steve Abernathy said,
and data shows that SquareTrade increases
warranty sales for direct and online retailers by
over 500 percent.

The main driver behind the high attach rates is the SquareTrade brand, which was
built upon a five-day service guarantee
and has been garnering tens of thousands
of positive online reviews by endusers.
“Our consumer brand is based
on amazing service,” Abernathy said,
“and we have actually decreased the
average time to handle a claim by 40
percent in the last year.”

As a result, the company has earned
consumer ratings of 4.5 to 5 stars on

, Epinions, Google, the
iPhone App Store, NexTag and Reseller
Ratings, has won the Bizrate Circle of
Excellence award, was named a Top
100 website by PC Magazine, and has
amassed more than 74,000 “fans” on

More recently, SquareTrade was selected
as a finalist in the e-Commerce
Customer Service category in the 2010
Stevie Awards for sales and customer
service, a sister awards program to the
American Business Awards.

Last year also brought big changes


, which was acquired by
AmTrust Financial Services subsidiary

AMT Warranty

. Warrantech, which administers
and markets service contracts
and after-market warranties on CE and
appliances for retailers, distributors and
manufacturers, recently completed the
consolidation of AMT’s operations into
its extended warranty and service contract
administration business, including
a 400-person, 24/7 call center, at its
headquarters in Bedford, Texas.

As part of the AmTrust family of companies,
Warrantech also has in-house
access now to the AmTrust Group of insurance
carriers for underwriting, which
are all rated “A” (Excellent), Financial
Size IX by A.M. Best.

AmTrust said it will maintain the AMT
Warranty brand for its existing consumer
products segment clients, but all new
marketing and sales activity will be done
under the Warrantech brand. Indeed,
since the acquisition in August, Warrantech
has signed its first Top 20 CE
retailer, citing AmTrust’s and Warrantech’s
combined financial stability and
security, and decades-long third-party
administration expertise as the deciding
factors in bringing in the new business.

“The acquisition of Warrantech further
diversified our business and allowed
us to instantly become one of the
larger warranty administrators in this
highly competitive space,” said AMT
Warranty president Bruce Saulnier.

“Together, we’re able to identify and
implement best practices in order to become
one of the most viable, efficient
and innovative players in this market,
and many consumer electronics retailers
are already taking note,” added
Sean Hicks, president of Warrantech’s
consumer products sector.


Global Warranty Group

(GWG), which this year celebrates its
10th anniversary, has begun offering coverage for Apple iPad and Samsung
Galaxy tablets as part of its signature
Wireless Protection Program. The company,
which lays claim to being North
America’s largest dealer-based, thirdparty
provider of insurance-backed
handset-replacement programs to more
than 7,000 independent wireless retail
locations, said the program’s fully insurance-
backed and compliant coverage
lost, stolen,
and liquid
protection. The
cover all
iPad and Galaxy models and will be
available in two-year prepaid and monthly
plans, can generate “substantial additional
revenue and profits for the dealer
base,” president Charles Pipia said.

“We understand and recognize the
explosive salability, appeal and growth
of this dynamic new product segment,”
Pipia noted, and introduced the comprehensive
tablet coverage in response
to dealers requests.

The company also recently launched
a turnkey extended service program for
CE dealers and manufacturers called
RepairGuardian, which provides a comprehensive
solution that’s easy to implement
and affords superior customer
service for increased attachment rates,
GWG said.

The program is backed by an A.M.
Best-rated insurer and is supported by
an around-the-clock claims-and-customer
support center and a network of over
25,000 independent service providers.
The company also provides extensive
sales training through a dealer services
team, plus
art IT
integration and
interactive web
tools for
claims adjudication, tracking, dispatch
and administration GWG said.

“We drew on our decade-long success
and experience in the ESP and
OEM business and consolidated the
most successful components to create
RepairGuardian,” Pipia said. “We
incorporated and optimized our proprietary
back-end systems and processes
into the program, allowing retailers and
OEMs to offer a comprehensive ESP as
an attractive addition to their customer’s
product purchase,” resulting in additional
sales revenue, increased profit margins
and enhanced customer retention and satisfaction, he noted.

Recent developments at extended
service contract provider


include a new e-gift card
replacement program that speeds reimbursement
for gifts that become broken
or damaged. Assurant is the first to
offer this service to its CE and wireless
retail clients and their customers, the
company said. Under the program, participating
retailers can issue electronic
gift cards to customers who protect
their purchases with an extended service
plan. If a purchased item should
become broken or damaged, the customer
can redeem their e-card instantly
online or in-store at their convenience,
rather than waiting several days to receive
a refund in order to purchase a

“Extended protection plans offer protection
for popular holiday gifts, such as
smart phones, laptops and flat-screen
TVs,” said Joe Erdeman, president of
Assurant Solutions extended service
protection business. “Nothing is quicker
than an e-gift card to replace a broken
gift, providing the customer with the
funds needed to replace the item in
hours instead of days.”

Unlike some gift cards, Assurant Solutions’
product won’t expire, and there
are no hidden fees or usage charges
that will erode the value over time, the
company said. The cards are also easy
to replace if lost.

Separately, Assurant received two
finalist nominations in the fifth annual
Stevie Awards for sales and customer
service. The company was nominated
in the “Innovation in Customer Service”
category for the analytics-based
contact routing technology known as
RAMP (real time analytics matching
platform), whose development was led
by VP Cameron Hurst. Contact center
operations VP Mark Davis was also
selected as a finalist in the “Customer
Service Leader of the Year” category
for implanting the “SHOE” program
(successfully helping others engage),
which partners new employees with
experienced ones. Winners will be
announced at a gala event in Miami
Beach on Feb. 21.