Buying something online isn’t the dice roll it once was.
Over the years, merchants and retailers have made significant strides in fighting purchase anxiety by improving product descriptions, optimizing checkout flows, and building trust with loyal customers.
Today, though, many are also realizing the importance of warranties and other consumer protections in easing post-purchase concerns and encouraging people to buy. According to recent research, for instance, up to 47% of shoppers say they’re more inclined to select a brand that offers product protection plans, while 32% say they’d hesitate to buy if a warranty isn’t included.
With Black Friday and Cyber Monday rapidly approaching, a robust warranty policy can make the difference between a customer choosing your business over competitors.
In this edition of On Track, we'll explore the importance of providing a solid warranty, especially for higher-cost items, and outline some tips to help you set up a better warranty experience for you, your customers, and your operations teams.
Do warranties make a difference?
An individual's purchasing decision is complex: it's a delicate dance between the price tag and the perceived value, a tug-of-war between what looks good on paper and what actually delivers. And every consumer has their own line in the sand when it comes to risk. But when you strip it all down, one question stands out: just how much do your customers trust you?
Trust is what keeps your customers coming back. In the fast-paced world of online shopping, where customers are spoilt for choice and competition is intense, earning their trust can be your game-changer. According to Adobe's Future of Marketing study, a whopping 74% of consumers stated they'd stop buying from brands that betray their trust. So, it's clear - trust isn't just important, it's everything.
During bustling shopping seasons like Black Friday and Cyber Monday, warranties become your best friend in earning customer trust. Picture this: shoppers are diving headfirst into a whirlwind of deals and discounts, picking out presents for loved ones. A warranty is like a comforting safety blanket in this scenario. It reassures the shopper, "Don't worry, your investment is safe." This assurance becomes even more vital when the purchases are gifts - the trust isn't just between you and the buyer anymore, it extends to the gift receiver too. So you see, warranties aren't just a piece of paper; they're a potent tool that can boost trust and elevate the shopping experience during these high-stake shopping times.
Beyond building trust, warranties can even help you boost your average order value (AOV). Clyde Group found that customers purchasing higher-priced goods are over twice as likely to depend on a warranty policy when purchasing. And during BFCM, people tend to feel more comfortable splurging on pricier items when they know there's a solid warranty backing their purchase. It gives them the peace of mind to open their wallets a bit wider, reassured that their investment is protected.
So, a comprehensive warranty policy doesn't just build trust—it can also boost your bottom line. It's a true win-win.
How can I improve my warranty offering?
Here are some key tips to make the most of your warranty strategy during Black Friday and Cyber Monday:
1. Understand what types of warranty you can offer (and when to do it)
Understanding the various types of warranties and choosing the ones that best fit your products can greatly enhance the customer experience you offer.
Here are the most popular types that you should consider:
An express warranty is a written assurance that a seller, let's say a business like yours, provides to a customer. This assurance commits the seller to repair or replace a product within a certain timeframe if any issues arise post-purchase. It's essentially a guarantee that the product will function as expected and any unforeseen issues will be resolved at no additional cost to the customer.
To illustrate this, imagine a customer purchasing a high-end laptop from your business. You offer an express warranty that addresses hardware or software malfunctions for one year after the purchase. So, if the laptop unexpectedly crashes or the battery fails to hold a charge within the first year, your business pledges to repair or replace it free of charge.
An express warranty can be incredibly beneficial for customers who value peace of mind and want to protect their investments. It allows them to enjoy their new purchase without worrying about potential complications or surprise repair costs.
An implied warranty, as the name suggests, is an unspoken guarantee that the product you're selling is of good quality and fit for its intended purpose when it's sold. It's a fundamental assurance that gives customers confidence in their purchase.
Imagine you're a business owner selling high-end blenders. With an implied warranty, you're assuring your customers that these blenders are in top-notch condition and capable of performing all the tasks that a high-quality blender should, like blending smoothies, pureeing soups, and crushing ice, right from the moment they're sold.
This type of warranty could be a good fit for your business if you're confident in the quality and performance of your products and want to avoid dealing with the complexities of offering specific written warranties. However, it's essential to remember that with an implied warranty, you're inherently taking on the promise that your product will work as expected. If it doesn't, you may have to replace the product or refund the customer, potentially affecting your bottom line.
An extended warranty is an optional extra that customers can buy to prolong the warranty period or to cover more comprehensive damage than the standard express warranty. This type of warranty acts as an added layer of protection, offering customers peace of mind for a longer period and often covering a wider range of potential issues.
Suppose a business owner sells high-quality kitchen appliances. Each appliance comes with a standard one-year express warranty. However, the owner knows customers might appreciate additional coverage, especially since these are higher-end products. So, they offer an extended warranty that adds two more years onto the original warranty and covers more extensive damages, like accidental damage from dropping or spilling.
For business owners, offering an extended warranty can be an excellent strategy for boosting customer confidence and loyalty. It shows that you believe in the longevity of your products and are willing to stand by them for an extended period. If customers are investing in pricier items and want to protect their investment for a more extended period, an extended warranty can provide that extra assurance they need.
A limited warranty provides coverage with certain limitations. It typically only covers specific parts or defects and usually does not include the labor or extensive repairs needed to fully restore the product. This type of warranty is often used when sellers want to assure their customers without taking on the full liability of comprehensive repairs or replacements.
To understand this better, imagine you're a business owner selling high-quality office chairs. You offer a limited warranty that covers structural defects in the chair, such as issues with the frame or the wheels, but it doesn't cover wear-and-tear or damage due to misuse. If a customer finds that the chair's wheel breaks under normal use within the warranty period, you’d replace the wheel or the entire chair at no cost. However, the warranty would not cover those repairs if the upholstery wears out or the chair is damaged because of improper use.
For business owners, offering a limited warranty can be a strategic choice. It can help instill confidence in your products while also setting clear boundaries on what is and isn't covered. This can protect your business from excessive repair or replacement costs while still providing after-sales service to your customers. If you're a business owner who wants to balance customer assurance with cost control, a limited warranty might be the right choice.
Choosing the right type of warranty type can significantly impact your customer experience and, ultimately, your brand's reputation. Understanding these factors and choosing the right warranty can help your business meet and exceed customer expectations, foster loyalty, and drive long-term growth. Remember, a warranty isn't just a policy—it's a powerful tool for customer satisfaction and retention.
2. Clearly outline your warranty policy
A well-articulated and easy-to-find warranty policy can be the deciding factor for many customers, especially during high-traffic shopping events like BFCM. Shoppers during these peak periods don't have the luxury of waiting for a customer service response on your policies. If they can't find it, there's a high chance they'll switch to a competitor.
To ensure an effective warranty policy, make it concise yet explicit. Clearly outline the claimable items, provide instructions for customers to submit a claim, and detail the subsequent steps. This transparency builds trust and minimizes misunderstandings.
Finally, consider the placement of your warranty policy. Adding it to your help center or footer, or placing it in the same areas as your returns policy, can facilitate quick access. The easier customers find your warranty policy, the more likely they feel confident in their purchase and choose your business over competitors.
3. Collect all the info you need
Complex processes and long email chains can frustrate shoppers, making them question the reliability and trustworthiness of your brand. Nobody likes a runaround. That's why ensuring that warranty claims are easy to submit and straightforward to process is crucial. Make it hassle-free for everyone!
Ideally, provide customers with an easy way to tell you about any and all issues they have. Whether they need replacements or repairs, allowing them to upload photos or provide detailed descriptions of the problems can be life-changing.
This can include:
- proof of purchase,
- or any other information that might speed up the resolution process.
Front-loading questions about how customers would prefer their claims to be resolved can significantly cut down on back-and-forth communication, saving your team precious time when processing tickets.
4. Mitigate the risk of warranty fraud
BFCM is porch pirate season, sure, but there’s another hidden threat to be aware of.
One of the biggest concerns merchants have when offering a warranty is the possibility of fraud. And it’s true—warranty fraud can account for a significant portion of warranty expenses, ranging from 2% to 4% of company revenues annually.
When you review all the information, make sure your solution has gathered all the necessary details to effectively process claims. This will help accurately identify items and assess if the description aligns with the problem, getting ahead of potential issues before they become a dispute or identifying potential fraud.
You might also want to consider implementing a small flat fee for warranties to combat fraudulent activities. While it might deter a few shoppers, it's likely to attract people who genuinely care about their products and need assistance.
This approach can help weed out false claims, ensuring your resources are focused on helping real customers and maintaining a positive brand image.
Putting It All Together: A Warranty Strategy for BFCM Success
A comprehensive warranty approach can be a game-changer for your Black Friday and Cyber Monday strategy. Customers want to feel confident in their purchases and know they can rely on you for help if their products need to meet expectations. With the right warranty policy, shoppers trust your business more and return for future deals.
To ensure an effective warranty strategy during this busy period, consider the following:
- The types of warranty you can offer
- Speedy resolution of customer issues
- Creating a clear and easy-to-find warranty policy
- Collecting all the necessary information from customers when they submit claims
- Addressing potential warranty fraud with flat fee charges.
By focusing on these key areas for your Black Friday and Cyber Monday warranty strategy, you can ensure customers are satisfied and your business stays on top this holiday season.
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