At a time when customer retention drives sales and customer experience is the name of the game, brands look forward to providing an unparalleled warranty claims experience for their customers. However, warranty management is a complex field and can prove to become a burden on companies profit. Read this blog to know how you can reduce your warranty claims cost.
Warranty claims can cost brands between 1.5 - 4 percent of sales revenues, depending on the industry and product segment. And when handled improperly, warranties make companies lose business and revenue almost irretrievably.
Use data and analytics to reduce warranty claims cost -
Harnessing and utilizing warranty data is any manufacturer's best bet for reducing warranty costs. Warranty data can be utilized for two major objectives -
Improving your customer service -
Data can help you streamline your warranty claims service. Using reports from the analytics dashboards, brands can review the process at scale and figure out new easier processes. Analyzing the data will allow you to look into your post-sales customer service and find out which step the customer finds the most exhaustive and time-consuming.
Improving your product -
Track warranty data to find out what aspect of the product is triggering the most warranty claims. Warranty data not only allows you to save R&D costs but also allows you to use user-generated data to create an improved customer experience. Warranty data provides direct information about how and when your products fail. With this information, you can identify parts and systems that need improvement. Warranty data will even give you insight into what needs to be improved to reduce failure rates and improve customer satisfaction.
Automate your warranty process to reduce costs -
Traditional warranty management processes are manual and labour intensive, thus driving up costs. Automating the warranty process allows you to reduce your dependency on customer support executives and reduce customer support costs. Automating the process allows brands to manage a large number of warranty claims at once on a single screen, thus cutting down operational cost significantly.
Know how Syska reduced its warranty costs by automating its claims process - Download case study.
Identify fraud, repetitive claims to reduce warranty claims costs -
Warranty fraud can be difficult to detect, especially without skilled resources, processes and controls in place -- e.g. internal audit departments, anti-fraud policies, and formal fraud risk assessment. As brands look forward to providing the best customer experience, a lot of such repetitive and fraudulent claims are left on the suspicion stage.
Frauds can be classified into 2 categories:
Duplicate products:
If customers love your products, there is a high possibility that counterfeit/ look alike products of yours are floated in the market with your brand name. Your brand name is used by the counterfeit & sell substandard products in your name. This not only increases your warranty claims, but customers also lose trust towards your brand.
Customer Frauds:
A large chunk of fraudulent claims come from fraudsters who mix up with real customers who end up losing their warranty cards and bills. Also, customers at times intentionally provide an out of the warranty product under claims.
About 10-15 percent of warranty claims are classified as intentionally fraudulent (as against typos or accidental errors, which are easily detected during verification). Know more about how you can stop fraud warranty claims - Stop warranty frauds.
By eliminating fraudulent claims early in processing, you save not only money but precious time and resources as well.
The Solution?
Serialize your Products -
You should serialize your products so that every product can be uniquely identified and tracked at any point in the supply chain.
Benefits: When any product comes for warranty claims, you can track details like when the product was manufactured, who was the supplier/ OEM. This will help in tracking which supplier is using the wrong product.
Digitize the Warranty Process -
Digitizing the warranty claims process puts your warranty service into an auto-pilot mode resulting in reduced service costs and a hassle-free experience for your customers. Digitization allows you to convert your warranty expenses into a profit-making asset as it brings with it customer data. Heading forward, brands will need a warranty management solution that delivers more than just simplifying warranties. A digital warranty solution does that by bringing your customers online, providing data of end customers and allowing you to manage customer communications.
Investing in the right warranty management software can be daunting for companies with a limited budget and complex requirements.
NeuroWarranty is a one stop solution that automates your warranty process to reduce costs. The QR-based Warranty Management Software not just helps optimize and automate the warranty process but prepares you for the future of sales by allowing you to bring your offline customers online and access customer data to effectively remarket and resell.
