Warranty Wise

Programs for Bikes

I am at Interbike today and tomorrow.   www.intebike.com

Last year I did not notice a single extended warranty player there…..

If I was an IBD, (Independent Bike Dealer) it would make sense to offer an annual tune up or some kind of maintenance agreement for every bike I sold….Especially in the light that electric units are taking off….That would keep my bikes sold and get customers visiting more often for sure. Even if I was not an IBD and was a major retailer, this still holds true….

I’ll check today as to what I find out and report back in as to the state of the 15 million units per annum industry!

Guarantee = Commitment

In Warranty Week this week http://www.warrantyweek.com/  there is a discussion about the blurring of Warranty and Insurance.  Simply put, warranty is generally thought of as protections against defects or failures and insurance as protections against damages or accidents.  I think that is pretty universally understood though most customers will try and bend it to work in their favor which is also universally understood….that is why God made fine print!  Just kidding.

Here are a couple of words that should not be misinterpreted by those that use them….Guarantee and Commitment.  When one stands behind their word with a guarantee or a commitment, there better be no difference.

If a customer is told you will guarantee anything for any period of time, you are committed….End of story.  They have to be able to trust you….. If you start to put exceptions that “protect” you from standing behind your word, you have lost credibility and there is no fine print or incident that will let you regain that trust.

I guarantee it.

Safe and Secure

What makes an extended warranty  or warranty program secure?

Is it the size of the insurance company?

Is it the excess reserves?

Is it regulation of that state?

Is it the systems?

Yes….all the above matterm but what matters most is a complete understanding of, and devotion to, the needs of your customer, and how your company is nothing without that customer….

One customer at a time.

One policy at a time.

Safe and Secure.

What Happens When There is Unrest?

In a service industry such as warranty and extended warranty administration and insurance, what happens when one company buys another, when another company has its president and VP of sales fired, when others are looking to raise money and another launches?

Opportunity for some.

Unrest for others.

Those that have opportunity are the stable players and the ones that operate with integrity.

Those that suffer unrest are the people that have entrusted their customers to the companies in our industry….Our customers.  The retailers, associations and manufacturers that rely on us to deliver customer satisfaction.

Can you imagine if you just decided to do business with a TPA, did due diligence, signed an agreement, started integration, cancelled your current contract and suddenly heard that the people you dealt with in the company are gone and you are not sure who is at the helm?  Not really comfortable.  What would you do?

Our industry is not a product.  It is a service. It is relationships.  What does it mean when those relationships change companies or go away?

Unrest and Instability for the ones that have the most to lose….

Kind of Helter Skelter…..

Check out this You Tube video of U2 performing “Helter Skelter” by the Beatles back when the boys were long hairs….pretty cool.

http://www.youtube.com/watch?v=sLmqjcYtH3c

Wear and Tear Fear

I was asked last week by numerous potential customers about our ESP program we were introducing at a show I was at, “what happens if the drill just wears out”, or “are you just going to tell me that I wore it out and that it lasted beyond its intended use”?  I am dumbfounded by this question?  I would expect, “what if I drop it?” I would expect, “what if it is used for rental or commercially”?  I would expect, “what happens if it gets wet”?  I would not expect, “are you going to cover it if it wears out?”

Our industry better be careful.  If the reputation is that we are not even going to cover wear and tear we have a problem. Isn’t that a benefit of buying an Extended Plan?  Yes, sudden failure, and unexpected problems are a must, but how can we even think it is ok to say something like, “sorry that is not covered, you used it up”.

How can we continue to expand our dealer base if there is a Fear about Wear and Tear?  Come on Industry….

Listen to this as a reminder, Jimmy and Robert and the band performing "Wear and Tear".  Found it on You Tube….

http://www.youtube.com/watch?v=HJ3nLZ_J04c

Go Show or No Show

I am at a trade show this week in Boston.  Many in our business attend trade shows to expose themselves to dealers or retailers.  It amazes me that in 2011 we still find myriad people that still do not offer ESP programs.  As we ask them why they have never offered plans we usually hear three reasons….1) Consumer Reports says they are a rip off, or  2) they have heard it is too hard to get paid for service, and 3) that they are afraid of upsetting their customers if we act like a “typical insurance company and give them the run around”.

For this reason alone shows are worth attending….

The biggest challenge our industry faces is to repair these viewpoints.  Only we can do that The best way to do that is to do things right.

When given the opportunity to explain the advantages of offering Extended Plans, the show attendees learn the many benefits such as adding to revenue and bottom line, satisfying and retaining customers…..

However, with all that said, we still need to earn their trust and the only way of doing that is to do things right at all times….otherwise we are killing our industry.

Have a listen to these songs as a reminder to not let people walk on by your booth without engaging them….Repairing our industry reputation starts with one dealer at a time!

Here is Walk On by U2

http://www.youtube.com/watch?v=gwKEdFoUB0o&ob=av2e

and “Walk On By” sung by Dionne Warwick

http://www.youtube.com/watch?v=07cS50j46T0

The Headline Effect

Will bad news on the stock market affect your ability to sell Extended Service Plans?  Yes, in a positive way.  People want to feel secure that their investment will last.

Will a headline about the inability of our representatives affect your ability to deliver top notch customer service?  Yes, in a positive way.  Remember, you build your business one customer at a time. If you give people an experience that is great, you will set yourself apart from the headlines.

Don’t let the headlines get you down….Use the to lift your business up.

Check out this video of Joe Jackson doing “Sunday Papers” 

http://www.youtube.com/watch?v=GnaUL8OpBck

Picking your ESP Partner

Extended Service Plans are common.  Top Notch Service is Not.

What should you do before you pick a TPA, Insurance Company, or Software Provider?

Visit LALA land.  Look, Ask, Listen, Affirm

Look

• At the client list
• At the reporting
• At the service center agreement
• At the people working in their call center and offices to see if they look happy
• At their financial ratings
• At their software used by the Call Reps to see if it is easy to use

Ask

• What they think their job is
• What their best clients are
• Why they lost a particular client
• How they handle escalations
• What they expect from you
• The call reps what they would change about the applications they use?

Listen

• To the calls in the call center
• To the folks in the break rooms
• To their clients

Affirm

• Call Current Clients executives to get the picture of satisfaction
• Visit the stores where the plans are sold and ask the cashiers and employees if they are satisfied with the service and how much time it takes to handle claims
• Call service associations and centers to see what their opinion is of the company relative to authorizations, filing claims and remuneration.
• Check the internet to see if the company is generally liked or not.

I could go on but suffice it to say, you are better performing LALA inquisition before you make a bad decision and you team up with a company that will place your program and your company in lala land.

Take a listen to this song by Steam as a reminder…..it’s not La La but it is “Na Na Na Goodbye” which is what your custmers will be if  you don’t do your due diligence ahead of time…

http://www.youtube.com/watch?v=jsaTElBljOE

or you can listen to “Sha La La La Lee” by the Small Faces….

http://www.youtube.com/watch?v=EcosDZ5oAyM

The TPA’s job

I get too many calls lately about this subject.  What causes warranty providers to lose sight of their job?   Maybe they think their job is to make money.  That should be their end goal or a result of their job, but it is not their job.  Their job is to help the dealer or manufacturer make or save money and/or satisfy customers.  They can do this in a variety of ways while performing a variety of functions.  Clearly that is their job.  If they do not do this and make you or your customer miserable along the way, you owe it to them, to yourself and to your customer to get clarification and verification, or you need to make a change.  Don’t wait.  There are many TPA’s ready to serve you today or you can take it in house with the proper plans, software, reserves, captives and a host of options….

Our industry is based upon customer service and satisfaction and without that in the fore we put our industry at risk.  I cringe when I hear of TPA’s delivering bad service.  How does that happen?

Bad service can hurt and if you don’t make a change or make things right you run the risk of losing your customers, your profits and ultimately your business.

While this video and song are not specifically about the TPA industry they sure drive home the point…..Customers deserve the best you, your vendors and your TPA have to offer.  Never lose sight of that.  In this case United did. You can’t believe how often this video comes up in discussions……

This is called “United Breaks Guitars” by Dave Carroll and the band Sons of Maxwell and it has been playing on You Tube for quite some time now….

Enjoy and heed!

http://www.youtube.com/watch?v=5YGc4zOqozo

Dare to be Different—Hold on to What you Got

Square Trade made the extended warranty business about price….different in perceived value.

Harbor Freight made their extended warranty business about over the counter replacements on tools…different in convenience for people that need a tool to get the job done.

Hyundai made their purchases include IUI, (Involuntary Unemployment Insurance) where you can get relief of payments if you lose your job….different in Peace of Mind.

Assurion enables Verizon and others to put the mobile phone coverage right on the bills….difference in affordability and close rates.

Many companies now offer accidental damage on your tools, laptops or other products…different in your oops coverage….

What else can be done to make your program different?   Don’t let anybody tell you that you can’t offer what you think your customer needs.  It can be priced. It can be administrated.

Want to make a difference?  Always build your programs to the benefit of making a difference in your customers’ lives….that will enable you to get new customers, but as importantly hold on to the ones you got!

This may be a stretch, but I have always dug this video by Bon Jovi I found on You Tube.  Oldy but a goody.   

http://www.youtube.com/watch?v=lDK9QqIzhwk