The proliferation of IoT (Internet of Things) sensors and devices is driving transformational growth in the warranty protection sector. Smart technology and connected products — including smartphones, electronics, appliances, home automation solutions and intelligent automobiles — come with hefty price tags, prompting more consumers to purchase extended warranties and service contracts. According to market research firm Credence Research, the global extended warranty market for consumer electronics alone is expected to reach $50 Bn by 2026.
Millennials and younger consumers, in particular, see the value of extended protection for their high-end purchases. According to a survey of 1,000 consumers released at the 2019 Consumer Electronics Show by AmTrust Specialty Risk, 40% of consumers currently participate in electronic protection plans. Of those, more millennials (57%) purchased plans than Gen X consumers (42%), and only 29% of baby boomers did so. A similar survey on automobile extended warranties by Pegasystems found that over half (54%) of vehicle owners aged 16-24 carry an extended warranty compared with only 25% of those 55 and older.
While today’s consumers may be more willing to pay for the peace of mind of extended protection, they also have higher expectations for customizable and transparent agreements, easy access to service and support, and a seamless experience akin to that of leading retail brands. As machines get smarter and consumer demands continue to expand, the core function for warranty protection providers is evolving from reactive repair and replacement to providing proactive consumer education and support, and preventive maintenance.
As an active, ongoing support partner in the product lifecycle, extended warranty plans are likewise progressing from a one-time upfront purchase to a monthly subscription service model that can be managed through a variety of devices. InsurTech firms have been emerging to cater to millennials and Gen Z consumers’ preference for “everything mobile” by delivering on-demand coverage for products, which can be instantly and easily purchased and managed via a smartphone app.
While competition among warranty protection and service contract providers will continue to intensify, the edge will go to the providers that can zero in on consumers’ needs, wants and behavioral preferences. Understanding the end-to-end consumer journey on a deeper level will allow providers to offer personalized recommendations, knowledgeable support and a superior customer experience.
Two converging marketplace trends are compelling warranty protection providers to shed traditional repair-and-replace contracts for proactive customer service models that add multiple touchpoints along the customer journey. Ever-increasing consumer expectations for quicker, easier, more personalized product protection plans combined with rapidly advancing smart technology and the expanding IoT ecosystem will require providers to develop deeper consumer relationships built on seamless omnichannel service delivery with data analytics capabilities.
Key customer service challenges facing warranty protection providers include:
CustomerServ’s best-in-class warranty protection call center vendors deliver expert, knowledgeable customer service and support that bolsters the consumer’s peace of mind and validates their decision to purchase an extended protection agreement. Our warranty protection vendors deliver a superior customer experience in the following areas: