Warranty Wise

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

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

Pastime Paradise, Living In The Past

• That was then.  This is now.

 

• That’s not how we, (or they), have always done it.

 

• You can’t change the past that’s why they call it history. You can’t predict the future that’s why they call it mystery.  Today is a gift, that’s why they call it the present.

 

At what point do you make a change even when change is not comfortable?

 

If you have a process that does not work or bogs your company down do you not eventually  change it?

 

If you have an employee, a manager, a vendor, who is not supporting your efforts to make money, and more importantly, satisfy customers, why would you not change them?  Each person or entity that touches a customer matters because each customer experience matters.

 

If your extended service plans do not give a positive customer experience at the time of sale and, more importantly, at the time they have a problem with their product, identify the issues and fix them.  Even if this means changing personnel, your call center, or your TPA.  If you wait, it will cost you dearly.

 

Here are a couple of great songs to remind you to focus on the present and not live in the past or wait for the future.

 

 

One of my favorite by Ian and his boys in Jethro Tull.  “Living in the Past”

 

http://www.youtube.com/watch?v=EsCyC1dZiN8

 

Then there is Stevie Wonders’s “Past Time Paradise”.  Tremendous Version.

 

http://www.youtube.com/watch?v=TRdLmBXi918

New Products-Old Products

other than they give us new ways to be entertained and whatever other benefits we glean, is that those of us in the Warranty Industry get something new to work on.  How often will these break?  Are there parts?  What type of extended warranty product or service will make sense and incite sales?

 

What about products that have been around for years?  Are there new approaches we can use for those?   Think about DYI stores type of stuff.  Should these be replace?  Should they include maintenance?  Should they include labor?  Should they be part or item only?  How do you reach the contractors?  How do you reach the consumers?

 

If you have any ideas, please submit them.  This could help a potential account big time. I am sure they would appreciate it.  I know I would enjoy it.

 

One of my favorite is the membership program add on.  Think of the Special Protection Membership. No I am not talking about a dating club where you get supplies of condoms and you are insured against contracting and expanding!  You simply pay $25.00 or so more per year with your normal membership.  This gives you double the warranty or an extra year on any applicable product you buy during the year of membership. In other words, you do not buy extended plans per product, you buy them per membership. This type of math can be applied to many other styles of “one price”.

 

Any ideas?

Who Owns the Obligation to the Customer?

This is a silly question.  If you have to ask, you probably do not deserve the customer’s money.  The bottom line is simple. If you took money for an Extended Service Plan, you owe it to the customer to go out of your way to make sure they get what they think they deserve.  Otherwise, you won’t have a bottom line.

 

Whether you are a retailer, a manufacturer, a distributor or a TPA/Insurance company, if you are in the pathway of the customer’s money you are accepting an obligation.  Everyone owns that relationship together.  Everyone succeeds together or loses together.

 

Take care of you customer.

The Warranty Concepts Annual Awards

The WCAA’s.  What do you think of the sound of that?  There are industry awards for advertising, best products, best apps, best movies, best shows, best plays, best music of many genres.  I could go on.

 

What about our industry?  I am going to start our awards today. I will bring them up at the CES show this week to many of my industry friends.  Haven’t decided on the criteria. Have not decided on the rewards.  Have not decided on the awards categories.

 

Here’s a few ideas to start:

 

• Best Publication
• Best New Program
• Best TPA
• Best Insurance Company
• Best In House Program
• Best Training Program
• Best Application
• Best Service Network
• Most Consumer Friendly
• Best Warranty Association
• Best State Agency

 

I am looking for input and sponsors and this project starts today.

 

I will give a monthly or quarterly update.

Every Service Opportunity is a Branding Opportunity

Zappos.  Tony Hseih.  The company.  The leader.  I wish all companies understood that one of the greatest ways to make fans out of your customers is to treat them right when something is wrong.  At Zappos, they are all on the same page.  If a customer gets some shoes they don’t like for any reason, they get to return them.  Seriously.  Simple.  My wife loves these guys.  Tony says, “Every phone call is a branding opportunity”.  Makes sense to me.

Translate that into our industry when products fail.  Are we doing everything we can to make sure the customer is made whole and happy if their covered product goes down?  If we are always looking at saving a buck instead of investing what we should to insure that their problem is turned into another future selling opportunity, then shame on us.

I have a client that is recently in the middle of a “fine print” battle.  What a waste of time.  The TPA is using a clause in the “What is not covered” section about custom installs to refuse removal and reinstallation charges for any installed items….This is upsetting the people that sell these.  How will they then continue to sell them with vigor?  They won’t.  I wish all companies would understand ahead of time that this is a bad idea.

Make the selling and servicing employees happy and you will make the customers happy.

Brand your warranties as phenomenal.

Servicers are our Backbone….PSOCA speaks out

For years I have worked alongside, and relied upon, service networks and independent service centers.  It is a fact that without people and organizations to repair consumer electronics, computer products, major appliances, lawn and garden products, tools, furniture, automobiles, rv’s, and a host of other consumer products manufacturers, retailers and consumers would have a far different relationship. It should also be noted that without the service side of things the entire extended service industry would not exist.  That is a fact.

I bring this up because recently I was contacted by a long time friend and acquaintance to see what I could do to help him and his industry put together an extended warranty program that will enable them to offer their own plans because many of the TPA’s are ruining his industry. Eloy is a member of the PSOC.  Here is the link to his group.  www.psoca.org.  Apparently it is now the norm to try and negotiate such low flat rates and pay such a small mark up for parts that the professional service centers can not afford to do the work.  I believe when it comes to service that you truly get what you pay for and that can have a plethora of meanings.  I will explore this subject for the next few blogs, but in the interim, if you are a TPA, please read this and think, is this what you want? Is there another way to be profitable?  It seems you are forcing your service network to consider starting their own warranty program, setting up marketing and sales and competing with you.  Careful.

I copied this from the latest PSOC newsletter.

EXTENDED WARRANTY  COMPANIES

Third Party Administrators or Extended Warranty Companies.

Recently I have heard a lot of Servicers complain that they are being "screwed" by TPA's. I want to address this issue in the best way I can. TPA's used to give Servicers a reasonable rate plus a parts markup. This changed several years ago when one company decided to cut their costs and increase their profit margin. (assumption on the latter) Many other TPA's followed that lead and started offering the same low labor rates and no parts markup, and either told you where to buy the parts, or sent the parts to you with no parts markup. The end result is poor quality customer service. Servicers who do not know their cost of doing business sign these contracts and slowly die on the vine.

Now are you being "screwed" ? The answer is no. You are only being "screwed" if you let yourself and your company be "screwed" by accepting this kind of business. Simply and nicely just say no to these companies. In most cases it's below your cost of doing business or right at it.

What can we do to try and better the industry and bring back business relationships that we once had?

We need to educate our competitors and members in KNOWING WHAT THEIR COST OF DOING BUSINESS IS. I encourage all members to try and recruit our competitors to the association so that they can learn how to run a business and to know what their cost of doing business is. By doing this we will have far fewer companies accepting contracts from TPA's with substandard rates.

A simple equation for me is Fair labor rates + a reasonable parts markup ='s quality work at an affordable price, making a fair profit and my company staying in business.

Learn to say NO thank you!

I hope this helps.

Tim Ory

Paul's Certified Appliance

TPA or In-House for my Warranty Program? Scalability

This is the last of this series on weighing whether or not you should keep your program in house or entrust it to a TPA/Underwriter.  I really want you to consider this.  Scalability.  If your Extended Service Plan or Product sales take off, are you ready?  Can you grow with your growth?  Remember, the warranty and extended warranty business is a risk and customer service business.  One can have an effect on your credit rating and all that that means, the other will affect everything you do.  Everything.  For without satisfied customers and customers who know and trust you, you are out of business.

Everything from Reserves to Systems must stay up with your growth.  No exceptions.  This important part of your business can become a burden instead of an advantage if you do not Strategize and Execute for your growth and your ability to handle on this will spin out of Control.

Look at your own company.

Look at the TPA-Underwriter business partner you are considering.

How does that Scalability look?