There have been many opinions on the merits of quality management through total quality management (TQM) concepts and the international Organization for Standardization (ISO). These concepts and standards are practiced widely and re-enforced by robust quality control and quality assurance methods. These controls enable manufacturers to minimize defects in the production line, making a reliable product for customers and reducing material waste.
Quality is becoming top of mind for customers, regulators and business enterprises. Customers want to use the products they purchase with confidence, and expect the product to perform as represented. Regulators want to ensure consumers are protected, and product representation is accurate. Businesses want to move products they make, sell or sponsor as its a reflection on its brand and reputation. A lot of focus has traditionally been put in product design, manufacturing and testing to ensure that quality products to shipped to the customers.
Warranties can be viewed as an extension or an integral part of the product development and customer feedback loop. Companies may view warranties as an additional cost for the business, but consider the impact of a bad review from a customer on a website, or negative word of mouth. It could potentially cost more to repair damaged customer perception of the company’s brand and reputation. A strong warranty will allow a manufacturer to interact with the customer and understand where the product has not performed, and provide an opportunity or reconcile the relationship. A content customer would more likely refer the company to their friends, and family, and possibly result in repeat sales in your products lines as well.
A generous warranty can even make your product stand out among your competition. Consumers are growing more savvy and more financially conscious. Purchases are viewed as investments, and warranties are considerations in purchasing decisions. A product with a better warranty, in comparison to competing products on a shelf or on the same page of an e-commerce site, can be the tipping point for a customer decide on which product to buy.
Nevertheless, consumers are also demanding, and expect satisfaction being guaranteed, as from the infamous quote “the customer is always right”. Hence, a lot of successful retailers have policies to guarantee customer satisfaction and generous return policies. Typically retailer policies last up to 90 days (or less). Manufacturers can come into lifecycle offering a warranty, as the customer will be dealing directly with the manufacturer after the retailer’s return policy has lapsed. Nevertheless, a customer who will take note of a product warranty information whether retaining your product sheet, or researched on your website after a year or 2 since purchase would be diligent customers who can give you valuable feedback on your product. Product feedback through warranty claims can be very valuable for enhancing your product design or subsequent product lines.
Consider the amount of money and resources that a company can invest on market research, customer surveys and exploratory research. These concepts are also important in developing new products, improving existing products, and developing customer relationships. However, a similar focus can be put into warranties as they enable the business to connect directly with customers who have already used the product and can provide tangible feedback. This is an intrinsic learning and development opportunity that should not be overlooked.
Warranty claims are also a rich source of information for data analytics. Consider the importance of data mining, and developing insights on defect trends, and also feedback from customers. For example, if widget A has more claims than widget B, consider learning from the design team that made widget A and study the product’s characteristics, and manufacturing processes. Another dimension is geography of the claims – perhaps there are environmental factors that are causing the defects, and your company can innovate a new product to suit the needs for that geography, and additional spinoff products thereby increasing your company’s sales and market share.
The warranty claiming process should easy for the customer, as a hard process can result in several non ideal scenarios: 1) customer does not proceed with warranty claim, thereby manufacturer does not receive customer feedback; 2) customer loses confidence in manufacturer, and chooses competitor product, 3) customer gets annoyed and criticizes manufacturer’s products to friends, family, colleagues or social media. For the latter, not only is there an opinion on poor product quality, but this can also result in an opinion for poor customer service as well. Both of these results should be avoid as it can destroy a business.
The results would be evident through developing a strong reputation of quality, being the preferred product, and increased sales through continuous product improvement and innovation.
In summary, consider all the benefits that offering a strong warranty can have for a manufacturer. The results would be evident through developing a strong reputation of quality, being the preferred product, and increased sales through continuous product improvement and innovation. It can also result in placing longer durable products, thereby reducing waste for the manufacturing ecosystem and environment, which directly drives a sustainable business culture for all in the industry.