Warranty management matters because money matters. Organizations lose thousands of dollars in revenue every year due to warranty claims processing issues. Manufacturers across the globe spend anywhere between 2 to 5% of sales, per year on warranty claims. Considering that warranty is a direct cost component, all savings gleaned out of warranty would add directly to the bottom-line. Therefore, manufacturers and dealers have to balance profitability against costs along with complying with industry and government standards and guidelines. However, none of this should be at the cost of customer satisfaction.
So, what exactly is leading to high cost of running warranty management?
Technological inefficiencies and incompatibilities are one of the leading factors of rising costs. Manufacturers and dealers work with warranty processes which involve extensive manual work and are often carried out in an inefficient ad-hoc manner. This leads to a lack of visibility across the value chain and insufficient organizational learning from warranty claims.
Most warranty systems today work in their own silos as they are unrelated in nature. In order to achieve organizational efficiency and resultant savings this approach has to change. There is an immense scope for improvement which companies need to identify to reduce costs.
The need of the hour: Efficient Warranty Management Solution
Customer loyalty and enhanced revenues can be achieved by streamlining the warranty process. The changing economic conditions, which are highly competitive, demand a new approach to warranty management.
Warranty management solutions that combine process, technology, and analytics to improve customer satisfaction while ensuring a reduction in warranty costs, is currently the pertinent requirement. The process should be able to track warranties throughout their lifecycle. Such an efficient system would bring out the desired results - customer satisfaction, increased product quality, and reduced service costs.
An efficient claims management platform linked to a sophisticated analytic framework is pivotal to improving warranty management performance. Monitoring of internal and external deviations is essential and an early warning system enables a timely response to deviations and events. A centralized documentation leads to efficient management of claims by enabling easy and quick retrieval of relevant information.
A good warranty solution removes isolated approach and uses best practices to create, administer, process and track warranties, claims and assets through their lifecycles.
The benefits include:
Reduction in claims errors
Streamlined recovery of supplier costs
Improved accuracy and transparency of claim process
Fewer invalid or poorly documented claims
Faster claim turnaround time
Increase in customer satisfaction
Support for multiple warranty types including OEM, product and third party
Increase revenues with extended warranty and asset-based contracts
Improve service billing accuracy and customer intelligence
Correctly allocate costs for servicing products and assets under warranty
Fully integrated warranty processing resulting in greater productivity.
Inefficient and manual management of warranty leads to disconnected processes, which results in rising costs and loss in profits. An efficient warranty solution can do away with issues like slow customer resolution times, poor visibility into a product’s performance, unpredictable and unprofitable warranty and service contracts.
Ashley j. is a business architect worked in marketing department with top notch companies and has over 8 years of experience in content management solution, Advertising Technology, ad server software. She has also worked in several process improvement projects involving multi-national teams for global customers in warranty management and mortgage.