Warranty Cost Management: Guarantee Satisfaction & Profitability

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Warranty Cost Management: Guarantee Satisfaction & Profitability

Product warranty management has become an area of focus for many manufacturers. When a product breaks or does not function properly, the OEM is typically liable for the repair, replacement, or refund of that item according to the terms of the warranty. Aside from the high direct costs involved, warranty claims incur significant indirect costs such as:

  • reduction of market share
  • decrease in customer satisfaction
  • lower levels of brand loyalty

The High Costs of Warranty Claim Management

When dealers are responsible for the warranty management services, the manufacturers are required to reimburse their dealers for repairs performed on equipment under warranty.  However, lack of insight into the warranty and repair process results in incorrect diagnoses, over repairs, fraud, and overcharges.

Warranty Week identified seven industries whose long-term average warranty claims rates over the last 16 years are above the overall industry average of 1.5%.

These industries are:

  • computer OEMs
  • cars and small vehicle OEMs
  • trucks and large vehicle OEMs
  • semi manufacturing equipment
  • medical equipment
  • telecom equipment
  • appliances

These services, as well as other industries that are negatively affected by high numbers of warranty claims,  need better warranty management solutions. They need a faster way to  verify that the equipment is under warranty, and better insight into the repair process to keep costs down and work quality up. In addition, all businesses can benefit from improving the dealer experience by creating an effective warranty cost management process.

One innovative way that has already been proven to drive efficiency and cut warranty costs is visual assistance.

Warranty Management Solution: How Visual Assistance Can Cut Costs

Visual assistance can help industries establish effective warranty cost management processes, using the following methods.

Assisted Service

Using Visual Assistance in product warranty management, dealers can transmit images and videos of the equipment needing repair to the OEM’s contact center agents for immediate warranty verification, issue diagnosis, and visual confirmation of the steps needed to resolve the issue.

Once the repairs are completed, Visual Assistance allows the job to be verified, resulting in transfer of payment to the dealer from a satisfied manufacturer.

For example, in the case of a customer-claimed malfunction to a vehicle’s electrical system, the OEM can use the power of visual assistance to verify warranty validity, examine the electrical system, and authorize the dealer to provide a specific repair.

Self-service

If self-service is preferred, customers or dealers can upload images of the equipment, serial number, and proof of purchase, and the OEM can take it from there, validating the warranty and providing information on the next steps.

For example, a dealer can upload images of a coffee machine that has been submitted for repair. Using visual assistance, the OEM can auto-verify the customer’s warranty and authorize the dealer to either repair or replace the machine.

B2B Warranty Cost Management Using Vision

Most manufacturers consider their product warranty management process to be a resource-draining, administrative task that is a necessary cost of doing business. But with innovations such as Visual Assistance, warranty claim management can present an opportunity to reduce costs and strengthen relationships with dealers.

If you would like to see how TechSee’s visual assistance solution can help improve your warranty cost management  process, please click here for a demo.

Daniela Levi, Director of Product Marketing

Daniela Levi, Director of Product Marketing

With years of product marketing experience in the high tech world, Daniela Levi brings enthusiasm for new product GTM strategy, content strategy and the lead nurture process. She is currently leading TechSee's product marketing team.

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