You don’t have to be in business to know the importance of a product or service warranty. If you are a consumer that spends your hard earned money, you know that there is a huge benefit to having a guarantee on your purchases.
As an organization that has designed and managed warranty programs for other companies for over 30 years, we recognize the benefit for both business and consumer. Warranties build trust, relationships and confidence between buyer and seller. Warranties give buyers peace of mind and the power to feel confident in their purchase. This confidence comes from knowing that if something goes wrong, their money doesn’t go to waste. This is great news for the consumer, but what about the business offering the warranty? How do businesses benefit from offering warranties on their products?
The obvious benefits are…
- Added Revenue – With each warranty program sold, companies can count on additional revenue for the sale of each product. This is money in the bank, if they have a quality product.
- An Edge on Competition – A 10-year warranty offered on a well-made product is very likely a nightmare for a cheaper, competing brand. Lower quality competitors can’t offer warranty programs because they lack the product lifespan.
- Customer Loyalty – Most importantly is customer loyalty. A warranty program tells the customer that a business believes in the quality of their product. A warranty program also says that a company is willing to stand behind the customer in case something should go wrong. Responding to customer’s needs by protecting their investment leads to a higher level of satisfaction. This builds trust. This builds relationships. Eventually, this builds repeat business and a loyal customer base.
So, make money and take good care of your customers. That is the name of the game in business, right? Actually, as they say, “this is just the tip of the iceberg (or it should be).” Warranty programs don’t have to just be about selling a guarantee to a consumer and filing away their information, in the case that something goes wrong. A warranty program, if designed and managed correctly should offer insight and information about customers, products, service and feedback that is priceless.
Here are just a few examples of how a warranty program can enhance business…
- Consumer Insight – At the time of warranty registration, valuable data is collected. This data offers insight into a company’s customer base that can be used strategically for targeted marketing initiatives and business planning.
- Product/Service Improvement – When a company has a product or service with a warranty program attached to it, they know when things go wrong and why things go wrong. This is an opportunity for improving process and product.
- Customer Response – A warranty program ensures an alert when something goes wrong with a product or service. Reaction time, response and attention to customers can add to customer service satisfaction and a motivation to remain loyal to a brand.
- New Product Development – Warranty customers offer customer feedback, product rating and overall satisfaction survey results that arm businesses with not only the opportunity for product improvement, but also ideas for new product development.
Are you getting the most out of your warranty program? Do you have a properly designed and well-managed warranty program in place? You should…and you can.
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