This article was published in the January 2016 issue of Dealerscope magazine.
Written by: Chris Smith, Vice President of the Customer Experience at AIG Warranty 

It’s critical that everything about a warranty service contract program is organized to better serve customers.

Many service contract programs seem pro-consumer when sold, but end up forcing consumers to continually call in for status and chase down parts orders, often leaving them wondering if service providers will ever show up. The end result is consumers who are no longer loyal to or promoters of retailers, warranty service programs providers, or service companies.

In a market now dominated by online transactions, consumers are expecting proactive updates from retail partners and warranty service programs administrators. When products are purchased, it’s now common practice to utilize emails, texts, or calls to confirm orders (and notify of shipments and deliveries). Proactive communication throughout the purchase process also provides customers peace of mind.

There are simple strategies to employ to maintain a customer-centric service fulfillment process and build customer loyalty.

First, a consumer-first philosophy must always win out. Businesses, top to bottom, must adopt the principal that satisfied, well-informed consumers are crucial to maintaining retail longevity. In most successful organizations, consumers are free to speak to management when not totally satisfied with service. Each layer of the management team is there to serve as personnel interacting with consumers.  In many call centers, consumers instead get stuck in call center Interactive Voice Response loops, and issues never get escalated to management.

Secondly, organizations must measure the results of all business interactions with consumers. Remember—what is not measured will never improve, so it can be a huge advantage to take steps such as implementing dashboards, which allow businesses to visualize the customers’ phone and service experiences. Remember to share that information throughout the organization. It’s also important to create programs that survey consumer satisfaction. Organizations should also adopt Net Promoter Score (NPS) as a measure of how likely it is consumers will promote their brand to others and/or become return business.

Lastly, be proactive when service is dispatched. Using an Open Claims Management process, create routines or triggers that allow consumers to be contacted throughout service events. While most retailers now rely on third party service companies to perform repair work, it is essential for businesses not to entrust their brand reputation to those third parties. Consider contacting consumers the day of or day after scheduled repair events to confirm jobs were completed. If not completed, schedule follow-up calls to verify they were completed. If necessary, proactively find solutions. At AIG we find this approach will cause NPS scores to soar.

Adopting the suggestions above will help yield tremendous results. It is likely that (i) Customer escalations will be reduced and (i) Net Promoter Scores will increase. But there will probably be another benefit---the reduction of administrative costs per claim. The reason is there will likely be fewer product swaps and fewer cash concessions needed to keep customers happy. 

These suggestions seem very simple on the surface. They are---as long you establish a consumer-centric culture. If you don’t, like my former boss used to say, “It is easy to say and hard to do!” 

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