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Warranty management is an essential component of any profitable service organization. The ability to view, access, and automatically track customer asset warranty coverage and data is essential, and not having this can have adverse business effects, including loss of sales and customer dissatisfaction.
While warranties are important, they can also prove costly. A Warranty Week report stated that U.S.-based companies paid a total of $25.9 billion in claims in 2019. This aligns with the trend for the past 10 years in which U.S.-based providers have spent around $25 billion per year on warranty claims.
Warranties, however, serve an essential function. They are guarantees from a manufacturer or seller about the quality and service of a particular product.
It can be difficult to easily access and manage warranty information. There’s a lot of data, and sometimes field technicians can’t access what they need in the field. You want a solution that’s easy to use, easy to deploy, and can integrate all aspects of warranty management — from automating processing to streamlining claims.
One of the most effective ways to optimize warranty management is to use a module, which can help businesses easily create, administer, process, and track warranty coverage and activities against customer assets throughout their entire lifecycle.
To avoid warranty-related challenges, we’ve provided you a list of benefits of effective warranty management and tips on how the right digital solution can optimize warranty management for your organization.
8 Benefits of Effective Warranty Management
There are many benefits to an effective warranty management solution, including:
- Streamlined warranty management: When a warranty claim occurs, an effective automated system results in a streamlined, efficient process that reduces costs and shortens the warranty lifecycle.
- A complete, comprehensive approach: The right warranty process will remove gray areas, which can become confusing or lead to opportunities to take advantage of the system.
- Visibility: Customer-facing field service employees and technicians will have the right information at their fingertips in order to understand when warranty entitlements apply to a transaction.
- Customer satisfaction: When warranty processes and data are automated, service is faster and invoices are more accurate, which often results in higher customer satisfaction.
- Warranty cost management controls: A well-defined warranty management system reduces losses that can come from inefficient warranty handling and fraudulent transactions.
- Effective customer invoicing: A system that automatically applies warranty rules results in a customer invoicing process that’s faster and easier for all involved.
- Streamlined warranty registration: A system that properly ties the delivery or installation of a customer asset to the registration of the warranty effective dates provides a streamlined, efficient process that reduces cost.
- Business integration: An effective warranty management system integrates with critical business systems such as customer service, field service, inventory, purchasing, and accounting.
13 Tips for Optimizing Warranty Management
When you’ve decided it’s time to take your warranty management system — or lack thereof — to the next level, it’s important to start from the beginning. In this section, we address helpful tips to optimize warranty management, which will ultimately affect your business processes, customer satisfaction, and bottom line for the better.
1. Review your current approach to warranty management.
Whenever you’re considering a new system, it’s important to take stock of where you are now. Here are some important questions to ask yourself as you review your current system:
- Is your warranty system easy to understand?
- Are you able to measure the effectiveness of your current approach to understand what’s working — and what isn’t?
- How automated and organized are your records about the assets owned by your customers and the warranties in effect? For example, do you still have a paper-based system? Do you have an older software system that restricts information access?
A thorough review of your current system is important. Document the pain points and, where possible, the costs associated with your system.
2. Emphasize the importance of effective warranty management in your company culture.
After you review your current approach, you need to institute the idea of high-quality warranty management throughout your organization. You can achieve this by documenting the benefits of an effective system for your organization. Provide specific examples of how your organization will benefit from a more effective system, and instill a message from the top down that encourages employees to provide feedback on improving existing processes.
3. Improve your warranty management data.
Once you have thoroughly reviewed your current approach, you can take any new ideas and commit to improving the quality of your existing warranty management data. For example, you could ensure that users can quickly identify warranty owners, effective dates, and other data to guarantee a faster and more accurate service. You could make incremental changes, such as streamlining or consolidating data. Or it might be more beneficial to implement something larger, such as automating warranty systems, processes, and tracking capabilities.
4. Automate warranty agreement generation.
The right move may be to implement a system that can automatically generate warranty management data based on system transactions. A rules-based system is typically most effective because it can generate data based on the details of a transaction. For example, you could link a product’s inventory class to a template for the warranty terms and entitlements. The system should automatically capture details from the sale that can help identify the warranty, such as the equipment model, serial number, and more. The rules-based system can determine which individual components have separate warranty terms and entitlements than the parent system.
5. Implement mobile technology for field service workers.
Since your field service technicians are your front line employees who work directly with the customers, they would certainly benefit from auto-generated warranty agreements and easily accessible information and data. Consider providing a fully mobile solution so field service techs can access and manage warranty data across all devices. This provides technicians with much-needed visibility into warranty coverage so they can more easily perform work orders and cater to customer needs while in the field, which can also lead to higher customer satisfaction.
6. Automate warranty registration.
In most cases, a warranty is effective only when it’s created, which means a customer must first register for the warranty. If you create an automated system, warranty registration will be created as a result of product installation or training processes. This not only improves your data quality, but it also helps avoid potential future discrepancies when it comes to warranty dates.
7. Manage warranty expirations and renewals.
It’s also important to manage the warranty expiration and renewal process. An effective system includes features that remind customers when warranty expirations are approaching. If the warranty is eligible for renewal, the automated system will remind the customer about the continued warranty options. When a warranty does expire without renewal, the customer shouldn’t be surprised, and an automated system helps ensure that information is clear. Your field service system should include pricing rules that automatically go into effect once the warranty expires, which means that your technicians don’t have to determine whether the service visit is billable or covered under warranty.
8. Confirm the skills and certifications for your service employees.
An effective warranty management system with a documented base of customer assets includes information about the skills and certifications needed for warranty service. In many cases, your company will only be paid for the warranty work when a certified technician performs the service. The right system will help you develop and implement a training plan for your employees, and overall, it can help you consider new training programs or hiring goals and guidelines.
9. Streamline warranty claims processing.
You may have warranty claim payments that are delayed, reduced, or denied due to the lack of proper processing. After you ensure that you have the properly trained and certified employees in place, you can capture the right data to execute the warranty claims process with the manufacturer or other provider. It’s important to have a system that’s flexible enough to capture the right data, details, and location of the customer assets. Automating the process of generating warranty claims usually results in a major reduction in claims issues and follow-up checks.
10. Implement the right warranty management system.
After you’ve identified the right features and benefits, it’s time to choose the ideal warranty management system for your organizational needs. Sometimes a customized solution is worth the return on investment, but it’s possible to find a system that works out of the box with no customizations needed, which saves you time and money.
11. Study the analytics.
If you’re implementing a new system, consider one with extensive analytical tools, including access to artificial intelligence-based automation. These tools can help discover process issues and provide new insights for your business.
12. Consider new business opportunities with warranty extensions.
Customer assets may be covered by manufacturer’s warranty terms that don’t fully meet their needs. For example, a customer may be required by the manufacturer’s warranty to take a piece of equipment to an authorized depot for work. Consider offering supplemental warranty agreements that run alongside a base manufacturer’s warranty to provide extra services. The supplemental warranty agreement might add on-site service that covers travel charges and helps the customer avoid a depot repair visit. Your warranty management software solution will need to apply rules to the line items to ensure that certain items are charged to the manufacturer’s warranty while other line items are covered by the supplemental warranty agreement.
13. Customer Self-Service
Many companies have found that allowing customers to provide their own warranty data and information is an effective tool for their warranty management systems. Consider implementing a solution that includes customer portals. Phone and tablet apps can also make it easier for customers to enter and maintain their warranty data. Users can even submit a work request that goes directly to your customer service team, which can reduce the need for multiple phone calls with the customer.
Finding the Right Solutions for Warranty Management
Finding the answer to warranty management can seem difficult and daunting, but Hitachi is here to help. With our Extended Field Service Warranty Management Module, you can automatically track and manage customer asset warranty activity in Dynamics 365 for Field Service. Talk to one of our representatives today to learn how this invaluable tool can help your business optimize and streamline the warranty management process.