Warranty Management and Why it’s Important
Initially a customer support initiative, warranty management’s role is expanding. As businesses reap increased benefits from warranty management gained through product traceability, it is now an essential part of an organization’s revenue policy. More than that, it can potentially improve product quality and enhance business value through cost reduction. Let’s take a look at this critical business function.
What is warranty management?
At a granular level, warranty management includes the management of warranty and post warranty support. Generally, this means warranty registration claims submission, claims processing and settlement, fraud detection, returns management, supplier recovery, extended warranty marketing, replacement parts logistics, and inventory management. Due to the wide coverage it offers, warranty management can improve product quality, eliminate fraud, and ensure effective revenue management.
However, in most organizations, warranty management operates in a silo. Only when individual claims need servicing do organizations approach warranty management. However, under proper management, warranty management can significantly impact the overall product quality and help organizational growth.
Business benefits of warranty management
Integrating a warranty management package into the business process helps efficiently eliminate gaps in the product lifecycle process. Moreover, it closely monitors identifiable trends to ensure adherence to quality in product development. This leads to effective quality control at the early stages of development. Consequently, this leads to an increase in operational efficiency in organizational processes. Better product quality and operational efficiency directly and positively impact an organization’s bottom line.
A well-managed solution also comprehensively integrates customer information. This builds better customer relationships by providing recall information during lapses in the product warranty period. This increases customer satisfaction. Happy customers build better businesses.
Warranty fraud is an area where organizations need to concentrate their maximum efforts. Most organizations report huge losses in warranty claims through undetected fraud. It is crucial that organizations adopt stringent procedures and policies, establish and monitor well-defined performance metrics, and follow rigorous audit procedures. These steps effectively curb fraudulent activities in warranty claims. This enables organizations to leverage the full potential of warranty management practices.
Warranty management strategies
Therefore, it is crucial that organizations work on practices and processes to receive optimum benefits from warranty management. These include:
Gaining insights on customer requirements for extended warranty claims, identifying the various sources of additional revenue streams
Minimizing administrative costs by automating claims and settlement processes
Including innovative process mechanisms like online real-time validation and claim submission to expedite processing time and enhance data quality
Making on-time repairs possible through the easy availability of parts, enhancing customer satisfaction
Enhancing the visibility of warranty information and introducing technical advancements in claim processing, reducing the possibility of fraud
Monitoring to enhance quality issues through innovative methods
Minimizing costs by launching supplier recovery programs
A proper implementation of these methods could help organizations explore and embrace the full potential of warranty management.
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