Warranties are a necessary part of life for a manufacturer. Manufacturers must offer a warranty in order to gain a customers confidence in making a buying decision.
Warranty Week (www.warrantyweek.com) estimates that publicly-traded American manufacturers paid out around $28.7 billion worldwide last year, up just a little less than one percent from the $28.5 billion total seen in 2007.
Handling warranty claims is a huge expense.
Smart OEM’s use this data to improve quality and reduce future claims while taking the opportunity to build customer relations in what might be deemed as a bad experience.
In my e-commerce business, customers rely on us to recommend products to meet their needs. We base our recommendations on customer needs first, but after that we look to reliability and support from manufacturers. We know products will fail and try to steer customers to manufacturers that provide good warranty/service support. This reduces our problems (customers always blame us) while keeping the experience a positive one for the customer.
In a recent incident, the manufacturer failed the customer resulting in our company having to take the lead for an issue the manufacturer should have dealt with. It resulted in 6 contacts of the customer to us, and our service people having to chase down the manufacturer each time. The customer was not happy with us and the manufacturer and in turn we were not happy with the manufacturer. If this is a continuous result, our business will have to make a decision on which brand we sell.
It’s expensive enough to entice a customer to buy a brand, but once acquired, that job should become easier if the product lives up to the expectations of the customer. Products fail, no question, but OEM’s should want customers to report and have defects repaired. Smart OEM’s will want to know anything and everything about a customer’s problem and keep them and their resellers happy.
Most OEM’s will look at warranty claims in a way to improve the engineering process, which is important. Equally if not more important, is how friendly that claim process is to the customer. OEM’s that understand that, have a bright future.