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Warranty Roundup: The Best-Laid Plans Of ESPs

Warrantech Bows TV Lamp Protection

Bedford, Texas — Warrantech Corp. has introduced a new lamp protection plan for rear-projection microdisplay TVs.

The program, which was launched Jan. 1 and formally announced during last month’s International CES in Las Vegas, will replace faulty LCD, LCoS, D-ILA or DLP lamps that could potentially fail in new television products, the company said. The new plan will be administered by Warrantech under its RepairMaster program, and will provide consumers with coverage of their advanced TVs for a total of three years.

“Televisions are an important purchase for most people, and we want our customers to get the most enjoyment out of their television purchases,” said Steve Williams, president of Warrantech’s consumer products services division. “First, we help our clients understand how to maintain these complex new television products through a published list of equipment maintenance guidelines. If the lamp fails, Warrantech customers know they can count on a quick replacement. Our goal is to provide stellar service while making Warrantech a ‘one-stop shop’ for all consumer electronic purchases.”

Guidelines include avoiding TV power line interruptions, plugging the set directly into a wall AC socket rather than a satellite or cable box, cleaning or replacing the TV filter, and resetting the unit’s timer whenever replacing the lamp.

WaCA Adds Miele To Client Roster

Norcross, Ga. — Warranty Corp. of America (WaCA) has been selected by high-end majap maker Miele as administrator for service contract plans sold through the vendor’s key channels across the United States.

“WaCA’s advanced products and services allow us to offer flexible and powerful extended service contract solutions,” said Roland Weingartner, Miele’s national service manager. “Through our partnership with WaCA, we look forward to continuing the exceptional care we provide our valued customers long after they take delivery of their Miele products.”

Under terms of the agreement, WaCA will administer the customized “MieleCare” program that extends product protection for four years beyond the manufacturer’s warranty period. Miele’s own field service representatives, supplemented by a national network of trained service partners, will perform any repairs necessary to an appliance during the coverage period.

MieleCare will be available on the manufacturer’s extensive line of premium dishwashers, wall ovens, cooktops, laundry pairs, ventilation hoods and other white goods.

“We are excited to grow our relationship with Miele because we have first-hand knowledge in this industry that supports Miele’s dedication to quality,” said Kharl Mena, VP/sales for WaCA. “Our commitment is to provide the highest standards of service to Miele and to their customers.”

NEW Reports Record Year

Sterling, Va. — New systems, new programs, solid retail execution and a growing manufacturer business helped NEW enjoy a record year in 2004, according to president/COO Tony Nader.

Business was up 56 percent in total, Nader told TWICE, which he regards as a dividend from the company’s heavy investment in technology and people. Among the former was the development of an adaptive program management model that allows NEW to “dive deep into our customer’s business with reporting tools in order to evaluate and better understand it.” NEW can then adopt, fine-tune and re-adjust its coverage, pricing and other service plan components to meet the unique needs of each dealer.

NEW has also implemented a proprietary SMARTSystem platform, powered by Oracle and four years in the making, which allows retailers to transmit data in any format, thus further extending the company’s client-centric approach.

On the people front, NEW has overhauled its training program for call center and retail personnel, and has introduced a returns reduction program. Nader said that consumer loyalty is now 38 percent higher for its dealers than the industry average, and positive word of mouth and customer referrals are 26 percent higher as a result of enhanced customer care. What’s more, returns are down as much as 75 percent for retail customers, he noted.

“We’re helping to create lifetime customer, which ensures profits on the front end and loyalty downstream,” Nader said.

Sears, ServiceBench Launch Automated Claims System

Hoffman Estates, Ill. — Sears and ServiceBench, a Fairfax, Va.-based provider of online service supply chain management applications, have launched a new site that automates warranty claims and the claims recovery process for Sears’ channel of over 10,000 repair technicians.

Sears expects to significantly streamline its processes and increase service related revenue from claims processing as a result of the change, the companies said. The new system allows efficient submission of claims from technicians to participating manufacturers, as well as instant review and timely payment to Sears. It also frees up administrative resources can be directed toward consumer-end operations.

The program supports a wide channel of technicians servicing both Sears and other nationwide partner retail stores, and will be linked to Sears’ wireless SST system and call center, as well as the back-end systems of participating manufacturers.

“ServiceBench is honored to have the opportunity to help Sears streamline its service supply chain,” said ServiceBench’s CEO Michael Dering. “The claims recovery solution is perfectly suited to help companies like Sears make the service channel less cumbersome, more efficient and profitable — leading to stronger customer relationships and reduced costs.”

“Whirlpool applauds the partnership between ServiceBench and Sears,” noted Tom Welke, Whirlpool’s VP/consumer and appliance care. “As a company that has been partnered with ServiceBench for many years, we look forward to the continued, expanded adoption of its leading service automation solutions throughout the industry.”

Extended Warranties Extend Big Box Profits

New York — Best Buy, Circuit City and their extended service partners are mum when it comes to the contribution that warranties make to the retailers’ bottom lines. But a recent article in BusinessWeek attempted to attach a dollar figure to the profits generated by their service-plan programs, which are largely underwritten by AIG and AON, respectively.

The piece pegged margins on extended-service contracts at between 50 percent and 60 percent, and quoted FTN Midwest Securities Corp.’s analyst Daryl Boehringer, who estimates that profits from warranties accounted for 45 percent, or $600 million, of Best Buy’s $1.3 billion in profits last year.

The percentage is even greater for Circuit City: All of the chain’s operating income came from warranties last year, Boehringer surmised, noting that without profits from contracts, the company would have posted an operating loss from continuing operations of $195 million instead of a $564,000 gain.