Retail Observer

RETAILOBSERVER.COM SEPTEMBER 2024 30 I n today's fast-paced world, why are appliance after-sales warranties still such a challenge? Inefficiencies, high costs, and slow resolutions have plagued the warranty process for decades. Compounding these issues, manufacturers often reject claims, request proof of purchase, or cite nonexistent serial numbers, further frustrating service providers and customers. Service providers face additional hurdles – in the wake of new Right-to- Repair legislation, they can no longer purchase repair parts directly from manufacturers like GE Appliances. Instead, they must go through parts distributors, which involves a cumbersome warranty parts credit process. This situation forces service companies to navigate a complex system to recover their costs on transactions that already offer zero margins, while distributors receive parts handling compensation from the manufacturers said to be more than 20%. The impact of this challenge is akin to dealers retailing appliances at zero or fixed margins, and it's exacerbated by UMRP pricing and luxury manufacturers attempting to control pricing and logistics post-sale. STANDARDIZE AND SIMPLIFY! Based on the results of AVB/ServiceSource's 2024 Manufacturer's Warranty Scorecard, a servicer survey co-sponsored by Service Company Solutions and SCS Communications and distributed to over 800 BrandSource appliance dealers, the time is now to standardize, simplify, and add margins to the warranty claims process. That's no longer just a suggestion; it's a necessity. On a scale of 1 to 5, the industry satisfaction score average across all questions and 28 appliance manufacturers was a mere 3, indicating a neutral satisfaction level. Not a single manufacturer scored a 5 on the survey, which would have signified "very satisfied." These results underscore the urgent need for reform in the current warranty claims process. The appliance repair industry lets the manufacturer bully servicers into a losing business model, while the parts distributors remain profitable. THE PATH FORWARD To address these issues, the appliance industry must embrace a simple, standardized digital transformation. Here's how a modern, efficient warranty claims process could look: 1. Automated Claim System: Implementing a single (not several) standardized digital platform for warranty claims can drastically reduce manual errors and processing times. Service providers can submit claims online, and an automated system (one platform) can validate and process them quickly. 2. Centralized Data Management: A unified digital platform can centralize all customer and warranty data, making it easily accessible for manufacturers (ownership registration), service providers (warranty validation and claims), and customers (appliance repair history). This improves transparency and speeds up the resolution process. 3. Enhanced Communication Channels: Modern omnichannel communication tools, such as chatbots, emails, and SMS notifications (think Zendesk) can keep servicers up to date on their claim status in real time. This reduces frustration and builds trust. 4. Simplified Claim Submission: Streamlining the claim submission process through a single intuitive online form and easy-to-follow instructions can make it less daunting for end-users. Features like photo uploads, pre-filled information, and repair history can further simplify the process. 5. Faster Resolutions: With automated workflows and real-time data access, service companies can resolve claims more quickly, reducing processing downtime, increasing cash flow, and reducing accounts receivables. This would also provide a one-pay for parts, with margin, and labor reimbursement. CONCLUSION Today's outdated, cumbersome warranty claims process is unten- able in the digital era. Manufacturers and service companies must modernize their systems to remain competitive and profitable and meet evolving customer expectations. By leveraging digital solutions, they can streamline operations, enhance customer satisfaction, and ensure long- term success. Modernizing the appliance warranty claims process is not merely a technological upgrade, but a strategic imperative for the industry's future. B U Y I N G G R O U P N E W S MODERNIZING THE WARRANTY CLAIMS PROCESS An urgent call to action for appliance servicers RO Paul MacDonald is senior lead of ServiceSource, the exclusive AVB BrandSource initiative that helps servicing members run their repair operations more efficiently and profitably. Paul ran his own 38-tech service business, served as president of the UASA, and currently operates The Expert Service Program. Reach him at Paul.m.Macdonald@brandsource.com or call (647) 500-7785

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