Tampa, FL April 13, 2020
An effective extended protection plan program should harness predictive analytics. Failing to optimize extended protection plans could mean leaving money and valuable data on the table.
Excerpt from column published in Warranty Week written by Jimmy Bynum, founder of Alexander & Preston.
Regardless of industry, product, or distribution model, extended protection plans offer value for each member of the value chain, including the original equipment manufacturer, dealers and repair shops, and the end-user or customer. Both auto and heavy equipment industries distribute their product through independent dealers that also provide parts and service associated with maintenance and repairs. For manufacturers, the analytics and data generated by administering an extended protection plan will provide valuable insight into quality improvements and parts consumption that can lead to improved products that better address use patterns over time. For dealers, extended protection plans lock in revenue and earnings from parts and service; increase the resale value of well-maintained products; and strengthen customer and brand loyalty.
Ashok Kartham, founder and CEO of Mize Inc., a leader in warranty service and contact management, summed up the benefits of the circular economy created by extended warranty best: "Global warranty and service contracts management software enables manufacturers to streamline processes, optimize claim costs, and improve product quality. Delivering good customer service experience during the standard warranty period will drive sales of long-term service contracts. The service contracts will then lead to higher profit margins for the manufacturers and their dealer networks. This cycle of effective warranty management, improved customer retention, and higher margins from the service contracts helps companies to maximize value."
A critical component of a successful warranty program is transparency. If a company does not understand the full picture of their warranty program and claims -- and, importantly, are not bought into the role of warranty in customer loyalty -- they cannot begin to realize the opportunity on the table.
Vance Thomas, a Consulting Partner with Mize has more than 25 years of experience in warranty. When he started his career with Louisiana-Pacific Corp. (LP), warranty was still widely considered an administrative service where you simply fix or replace what is broken. Since then, the industry has evolved to become a more integral part of a company's business with new services and systems entering the market.
My job is to look at the data and build a narrative because the data always tells a story," said Thomas. "The building products industry is different than the commercial equipment industry in a number of ways. Our industry is vertically integrated, so we don't have suppliers building a product like a backhoe. This means that a claim will be evaluated to determine whether it's a manufacturing or product issue or an issue with installation. As in the equipment industry, however, we need data to drive decisions and maintain product quality and reliability."
Earlier this year, LP implemented a new cloud-based global warranty software from Mize. Thomas stated, "LP was previously using multiple systems by region, each with a separate process and data silos. The consolidation of these systems into a single global warranty platform from Mize helped LP to improve the consistency of warranty processes and the quality of data. LP now has an integrated global process starting from the initial customer case until final payment including inspection, estimate, claim, and settlement."
Added Thomas, "The LP team is able to run the reports and analyze the data within the Mize application as well as feed the data to other analytics tools such as Power BI. With gained efficiency in warranty process and automation, LP can focus on delivering a better customer experience and improving product quality." New tools from companies like Mize provide a more sophisticated approach to analytics and a rich data set that improve the maturity of the warranty program.
Excerpt from Warranty Week article - https://www.warrantyweek.com/archive/ww20200402.html