I hated to give customers anything but the minimum for warranties on items we sold and installed. That’s because I was imprisoned by my memories of when someone had abused the warranty policy.
Sometimes, I would just be mad about the way we’d butcher something during an install and I redirected my anger at the customer and not myself. I fumed when we’d have to eat the cost to go back and fix things under warranty. And it was like gasoline to a fire when I’d learn that the source of the warranty issue was a stupid callback, which I made sure the dispatchers would alert me to.
What a waste of time, energy and money!
And you know I really hated it when I felt the customer was abusing whatever we had sold but I now had to fix and/or replace the item.
Only after I learned to stop taking it personally did I let the pain and frustration go. The good news is I learned there’s a much better way to go about warranties.
Be extremely generous because they’re one of the best ways I know to differentiate your company in a crowded marketplace.
It may seem counterintuitive, but offering a better and longer warranty than your competition actually makes you money. That’s because you can charge more, plus it will help you overcome some of the biggest buying objections customers have when making a purchasing decision. One of those main objections is the fear of paying too much and worrying about the longevity of what they purchased.
Face it, customers need a nudge to say yes to the work you’re proposing, and the way to move them along in the buying process is with a peace-of-mind warranty.
Really, what’s most of your competition offering for a warranty on the products and services they sell? Is it a taillight warranty? That means when their taillights clear the customer’s driveway, the warranty is over. Or is it a 30-day parts and/or labor warranty? Even if that is what’s offered, what is it telling the customer? It’s telling the customer that this company doesn’t have much faith in what it sells and how it does its work.
It’s what makes us owners hesitant to offer longer warranties on the repair and replacement work we do. But if you knew your callback rate (for example, five calls out of 100 calls done would come back for a sales, operational or technical reason), there’s a way to handle it. But first, you need to track callbacks and warranty calls. That’s why you need the CSR to use a callback form and the service manager needs to verify if it’s a legit callback or not.
With good tracking, your true warranty and callback cost can simply be adjusted by raising your selling price and charging the little bit more it takes to cover it. This will allow you to offer the longest and best “no questions asked” warranty out there.
It’s just a matter of financial understanding.
You ought to know I’m not a big fan of punishing your customers with higher prices to cover up the serious holes in your knowledge, habits or processes.
The reduction in stupid warranty calls and wasted callback trips that keep you from offering longer and better warranties will result from cutting down on these types of calls:
Note: There are things beyond your control, but that’s pretty much limited to a defective product. If you’re tracking the source long enough, this will be revealed and you can address it with the manufacturer or switch products.
Now, if you want to get really good, you drive the callback rate down with excellent sales, operational and technical training. I do this with my clients with operations manuals, written training curriculum, a training center and a sales training curriculum. The longer the training is in place, the more dramatic your drop in warranty calls and callback ratio will be and the higher the customer satisfaction ratings will climb.
Here’s some more great news. You’ll make more money and your customers will be happier.
Do this and watch your sales go up!
Note: If you’d like a copy of the CSR Callback Form, e-mail me at email@example.com and I’ll be happy to send it along.