Even after echoed commitments from vendors on strengthening warranty, the issue continues to remain in a state of neglect. And complaints pour in regularly from harried resellers on the warranty policies of their business vendors.
p____p A look into this issue reveals that there’s a lot more to warranty management than one might think.
p____p Warranties initially came on the scene when manufacturers used it as a facility to support the distribution channel in the event of a product failure. The manufacturers then felt that with the attachment of ‘warranty’ the product would be perceived as good, while the dealer, on the other hand, believed a warranty-supported product signified a reliable manufacturer – thus end of problems. Even if something should go wrong, it could be fixed, as long as the consumer took the responsibility.
p____p As we all know, it didn’t turn out to be so simple. The warranty issue was simply not perceived as strategic.
p____p Today warranty concerns have reached complex levels. Though a critical business function it receives little attention and surfaces only when significant problems come to the fore. The warranty space in some way is still a relatively uncontested niche, as vendors divert their energies into cash flows or partner relationship management.
p____p Very few realize that the business involved in warranty presents a wide opportunity to achieve better performance and generate significant value through improved revenue streams and superior product quality. However, as the interest in improving the product warranty increases, vendors should begin to realize the potential in warranty management.
p____p The best part in the warranty issue is the revenue potential held in extended warranties. It has long been assumed that resellers sell without identifying the customer to the manufacturer, and end-users often fail to fill out warranty registrations. Therefore extended warranties is the best way to gain customer information for up-selling or cross-selling products and services.
p____p It is time the warranty issue is given top priority by the vendors, as warranty management is all about faster and better consumer response, recovering costs, improving channel relationships, and building a service business with much higher margins.