Creating a Smart Warranty Solution for Consumer Goods OEMs

Introduction

The evolution of technology is helping the original equipment manufacturers in developing intelligent consumer goods and other devices. But it’s also one of the biggest challenges for OEMs, including maintaining and extending relationships with customers while creating additional revenue and profits for their businesses.

They are facing difficulties in catering to the demands of Transparency, Seamless Experience, and Enhanced Services from the customer’s end. Out of all the segments, Warranty management is the most evident segment, where this challenge is quite evident. Thankfully, the advent of digitalization has unlocked the brilliant opportunity for OEMs to transform the whole ecosystem of Warranty Management into a proactive and customer-centric one.

But what does a connected and proactive Warranty Ecosystem look like? And, why should the OEMS invest in it?

An intelligent and well-connected Warranty Ecosystem is one, that not only integrates data systems but also helps stakeholders in achieving streamlined processes, and improved customer satisfaction. Thus, building a competitive advantage for OEMs in the consumer goods industry.

What is the Need for a Connected Warranty Ecosystem?

Earlier, there have been many instances recorded in the past where the occurrence of systematic problems in product, design, or quality issues.

● According to data collected in a 2021 study, approximately 79% of manufacturers have experienced issues due to inefficient warranty claims.

● A total of 36% warranty fraud has been reported as a significant issue. This led to the increment in poor customer management and retention, and increased warranty costs.

The OEMs must understand that the consumer goods industry products, be it electronics, automobiles, appliances, and industrial machinery, come with complex warranties. These warranties may vary as per the product type, region, and service provider. They further require efficiency, real-time data tracking, and seamless communication between the service providers, dealers, manufacturers, and end-users.

That’s where a connected and customer-centric warranty ecosystem can help OEMs. By adopting such a smart ecosystem, you can address all the discussed challenges as it will cater to the multiple pain areas and provide,

· Real-time visibility

· Automation

· Seamless flow of information

After the adoption of these smart and proactive warranty ecosystems, OEMs can see a reduction in warranty costs by up to 30% with faster claim processing, proactive maintenance, and decreased number of frauds reported.

The Major Components of the Connected Warranty Ecosystem

There are several components of a proactive and smart Warranty Ecosystem. Here, we’ve listed the major ones that are going to have a big impact on the OEMs overall efficiency.

1. Connectivity and Data Integration

Integrating data from several sources, including manufacturing, sales, customer service, and maintenance, is essential to a connected warranty ecosystem. OEMs may monitor a product's lifespan, from assembly to installation, use, and any potential problems that may occur during operation, by utilizing Internet of Things (IoT) devices.

The number of IoT devices within the manufacturing industry is expected to surpass approximately 75 billion. With real-time data collection, OEMs can fetch valuable data related to warranty claims, product performance, and user behavior. This will result in enhanced product performance and warranty management. Thus, lowering the unplanned downtime and improving operational efficiency. Furthermore, you can foresee potential failures by employing predictive analytics.

2. Cloud-Based Platforms for Real-Time Access

A connected warranty system makes the latest information available to everyone involved in the process, from the internal team to third-party service providers. It provides OEMs with centralized access to warranty data. To help reduce delays and enhance efficiency, a warranty management system can automate claim approvals, monitor repair statuses, and handle spare parts inventory.

As per Gartner's report, 75% of companies have already moved some of their corporate apps to the cloud, which has significantly helped in gaining real-time insights from cloud technologies, speeding up decision-making, and cutting down on operational inefficiencies.

3. Predictive Analytics and Artificial Intelligence (AI)

An integrated warranty system can evaluate warranty data to spot the trends and anticipate possible errors to make the warranty claims procedure better. This can be done easily by utilizing AI and predictive analytics. This enables manufacturers to address the problems before they result in expensive claims.

OEMs can cut down the warranty costs, boost product design, and enhance customer satisfaction by anticipating possible product defects before they arise. Accenture says that predictive analytics can drastically cut expenses by reducing warranty-related claims by 10% to 15%.

4. Seamless Communication Channels

Communication between OEMs, clients, and service providers becomes seamless in a connected warranty system. The first warranty registration to the final settlement of a claim can be easily done with the help of Chatbots, email notifications, and self-service portals. This will result in a speed up the settlement process, better transparency, and reduced customer annoyance.

According to a Zendesk survey, approximately 67% of consumers agree that prompt and effective customer service is crucial to brand loyalty. The Original Equipment Manufacturers may significantly improve customer satisfaction and response times with self-service alternatives and automated communication.

5. Enhanced Customer Experience

A well-connected and smart Warranty Ecosystem brings out a significant boost in the customer experience, by enabling them to quickly file claims, monitor progress, and get notified with easy access to their warranty details. Other than this, what makes a connected Warranty system more demanding is its ability to provide customer self-service online portals or through mobile apps, adding convenience, it feels less like a hassle.

7. Supply Chain and Inventory Management

Poor warranty management affects both customer service and supply chain operations. However, with a smart, connected warranty ecosystem, OEMs can offer valuable insights about spare parts usage with their availability, which further will help them optimize inventory levels. They can additionally ensure that the necessary parts are available predicting the demand based on warranty claims using these insights. It will help them reduce downtime and boost customer satisfaction.

Key Benefits of a Connected Warranty Ecosystem for OEMs

To emphasize how a connected warranty ecosystem can help OEMs in the consumer goods industry, here’s a list of key benefits:

1. Cost Reduction

The top benefit of the connected warranty system is that it helps OEMs reduce the manual process, errors, and operational costs by automating claim approvals, reporting leads to greater efficiency, parts, and resource management. Predictive maintenance can also reduce the number of warranty claims, further lowering costs.

2. Improved Product Quality

OEMs can identify recurring issues or patterns that may lead to errors in product design or development by collecting and analyzing the warranty data. This approach can help OEMs in improving the quality of their products. Also, it helps reduce the potential warranty claims issues in the future. Moreover, it can help enhance both product quality and reliability.

3. Customer Satisfaction and Retention

Original equipment manufacturers can build trust in their user base by implementing an efficient and proactive warranty ecosystem. This will certainly lead to improved overall experience; as when customers feel supported from purchase to warranty claim resolution, they are more likely to stay loyal to the brand and ultimately the word-of-mouth marketing automatically takes place.

4. Data-Driven Decision Making

OEMs can make better business decisions by analyzing the data captured in the streamlined warranty system. According to a Forbes survey, data-driven businesses that leverage insights into user demands, warranty trends, and product performance are more likely to attract and keep customers.

Additionally, OEMs can set themselves apart in the market by implementing smart warranty systems that offer easier access to warranty information, predictive help, and speedier claim settlements.

How to Create a Connected Warranty Ecosystem?

OEMs can build an effective connected warranty ecosystem by,

1. Determining the Customer-Centricity

Ensure that customer convenience and transparency are prioritized in every aspect of the warranty experience.

2. Investing in Technology

Create a unified, automated warranty management system by investing in technologies like IoT, ML, AI, data analytics, and cloud-based platforms, and leveraging their power.

3. Incorporating Data Security

Build and maintain trust along with complying with privacy regulations to protect customer and product data.

4. Working together with Stakeholders

Make sure that all of the processes are integrated seamlessly by collaborating closely with service providers, retailers, and stakeholders.

In Conclusion

It takes more than just reducing costs and optimizing internal processes to build a proactive, intelligent, and networked warranty ecosystem. It's also a way to create long-term value and raise customer satisfaction. By embracing digital transformation and bringing together various warranty management players, OEMs can create a seamless and efficient system that benefits both the business and the customers. OEMs are more likely to be successful in an increasingly interconnected world if they embrace this shift.

OEMs can start with market-ready Warranty management systems like Intelli Warranty. It is an advanced warranty claims and supplier recovery management system that is efficient at streamlining the overall warranty process from dealer filing to OEM deciding supplier recovery in one single integrated system. It further helps eliminate warranty fraud, operational costs, and human errors. So, give such solutions a try and see the wonders in your business advancement.