As warranty service providers like manufacturers become more and more focused on the customer experience, it’s necessary to evaluate how they can improve customer loyalty and the overall customer experience (CX). Reverse logistics doesn’t necessarily jump to mind as a hugely impactful tool for improvement, however it is.

We believe that in order to drive great CX, which has measurable downstream affects on brand loyalty and repeat sales, warranty services companies like manufacturers, extended warranty providers, retailers and service providers must focus on a few key strategic pillars which both impact and are dependent on the provider’s RL processes in some way.

Logistics can’t be a last thought in driving loyalty and great CX. Every point in the customer ownership journey with your company provides a multitude of options for improving both. Let’s consider the following basic elements of any reverse logistics strategy.

RMAs

Consider the RMA process. Failed products that require service or a return are already putting warranty companies on a poor foot with consumers. Who wants to deal with a broken widget? However, by streamlining the process for submitting an RMA request, and providing omnichannel mechanisms for doing so which are consumer-oriented, improve a situation fraught with opportunities to fail your consumer. Better yet, the RMA process can be used to drive more value for consumers. Can you provide education to help the consumer and save the return? Can you offer the consumer an alternative to a return? Is the product repairable? Is it possible to issue a refurbished unit as part of an advanced exchange process? Most Importantly, how do I provide transparency to consumer throughout the process.

We believe transparency is the number one driver of NPS in the service industry. Post clear return policies, for consumers and your support and service personnel. Be clear about timelines and ETAs. If there are other options, post them too so consumers can be prepared to consider the option when requesting help and provide notifications in each step of the process to let the consumer know that a solution is on the way.

Parts, Triage and the Great Unknown

The great unknown is not great. It’s terrible, in fact, for consumers. From a logistics perspective, invest in forecasting technology. If your company can’t predict what’s needed to replace or fix your products, how are you going to drive loyalty or repeat sales? If you can’t provide a part in a timely manner, your consumer is going to wonder to another known entity, your competitor, to replace their product. With so many great SaaS forecasting tools on the market now, there’s really no excuse for not being able to stock warehouse and truck stock based on parts utilization history.

Triage is paramount to success. Invest in training for your support and service personnel so that they can do some level of triage at the point of service request. Most consumers understand that the questions are being asked in order to better help them. Train, provide documentation to your teams and take advantage of technologies to post videos and other FAQ content to enable self-help for consumers who prefer that path.

OnPoint was able to work with a small appliances OEM to improve its warranty service process, both by developing a formal support process which includes consumer-facing technology and critical triage elements, as well as implementing a logistics solution. The logistics solution transitioned the process from 100% replacement to an advanced exchange program using refurbished units with a repair option for consumers that preferred that alternative. NPS for that client went from 20% to 60%. This is was a huge improvement based mostly on implementing a formal reverse logistics plan.

Let’s not gloss over the self-service factor either. Part order portals are popping up all over. If you can provide your consumers with enough information like part schemas and common issues and resolutions, those people prone to DIY tendencies can even take some of the onus of return processes off your plate. Let consumers identify parts, determine which need to be replaced and order them simply and quickly from your website or parts distributor directly.

Technology

Technology is critical. Warranty service providers like manufacturers are often, however, focused on internal technologies such as ERP, CRM and field service management. Logistics are often tightly integrated with some or all those platforms. Parts are forecast and managed, stock is used and replenished, RMAs are issued, stock deployment defined and executed from these solutions. Integrations to your RL technology must be clearly defined, real time and provide clear information to users, from support and service personnel to consumers, directly.

Use technology to provide policy information, shipping or refund SLAs, shipment tracking information and credit hold details clearly and often across your technology stack. Agents can set initial expectations of the process and update consumers as details are available from warehouses and shippers. Consumer portals push the same information directly to a consumer’s device. Deploy email, chat and text tools to keep consumer informed. Pizza isn’t a product we typically think of when referencing logistics. However, who hasn’t watched the Pizza Hut Pizza Tracker or Papa John’s new app as your pie was on its way? Manufacturers well versed in the voice of their consumer understand that cutting edge technology like Uber, Post Mates and pizza trackers, drive the same real-time expectations for all consumer products companies. Transparency and information are not optional, especially when consumers must wait for resolution. Wonder makes consumers wander. Keep them coming back by pushing as much value-added information to them as possible.

Big Versus Boutique

Something else to consider, especially if you’re thinking of outsourcing support, service, or parts management and logistics, is who can best handle your business model. In our experience there are two kinds of business models and two kinds of logistics vendors.

In a consignment model, manufacturers own part and product inventory but place it with a third-party provider. The OEM pays for shipping of parts and product to and from the consumer. That sounds simple enough. However, we’ve found a couple of things to look out for including:

• Make sure the vendor can easily take product in, track it and send it out. Again, sounds simple, but if warehouse management software isn’t in place with fully function receiving, allocation and shipment functions, parts get lost.
• Look for solid process for storing and moving inventory from one status to another, especially if status changes impact your financials or billing in any way.
• Is the vendor integrated with large shippers? If not, they should be! Providing your staff and consumers with a USPS, FedEx or UPS tracking number which includes, for advanced exchanges for instance, the outbound and inbound tracking info from beginning to end sets clear expectations, provides transparent updates and decreases total time to serve- all of which drive loyalty and CX.
• Lastly, does your product require any kind of special handing? Not all providers can handle complex or high touch requirements.

A turnkey model often works best when your parts or products have a large footprint or are moving quickly or in mass quantities. In this model, manufacturers are basically turning over everything to the vendor. The vendor owns all the inventory, absorbing inventory costs and keeping the margins from sales or service. This is a tool often used by big OEMs to move inventory off their balance sheet. However, OEMs still share some E&O risk. Be aware, this model doesn’t work for everyone. It’s great for big quantities, but not so much for small or complex products or parts.

Make sure either model supports quick disposition of aero value assets. ZVA are like fresh fish sitting on melting ice. You must move them fast or you have a very big problem.

There are two types of providers that seem to execute either a consignment or a turnkey model well. Small, boutique partners generally offer more flexible, high touch support for complex or small programs. You don’t get lost in the crowd with the smaller vendors.

However, large partners with a variety of locations placed throughout the country tend to be able to handle larger quantities or fast-moving stock a little better. These large players can also help manufacturers that are looking for financial improvement as well.

In both cases, the model you deploy and the partner you pick are part and parcel to driving loyalty and CX.

Don’t get Left Behind

Logistics aren’t often considered as a front-line element in customer satisfaction and overall CX. However, it is! As warranty service providers as a community recognize the value in driving CX to their long-term financial success, logistics is interwoven in front end consumer facing process and technology, back end support and service processes and technologies, as in your financial success.

Find out how OnPoint Warranty Solutions can assist with your logistics strategy today! Visit us at www.onpointwarranty.com

About OnPoint Warranty Solutions, LLC. OnPoint was launched by customer experience experts with proven success helping global brands deliver underwriting, service contract and manufacturer’s warranty programs, service fulfillment, service administration technology and logistics, to drive the highest levels of consumer experience in the service industry. Building on the foundation of a connected, multinational service network, omni channel customer interactions and consumer-focused technology, OnPoint creates brand loyalty through service contract and service solutions designed to reduce risk, increase efficiency, delight consumers and improve our customer’s bottom line. For more information, visit our website: www.onpointwarranty.com, email us at help@onpointwarranty.com or dial 877.668.4681 to learn how OnPoint can help you today!

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Chris Smith
With 32 years in the consumer electronics and technology industry, Chris is a seasoned contract, service and CX veteran with experience honed at Samsung, AIG, ServicePower, GE and Montgomery Ward. Chris serves as a board member of Encompass Supply Chain Solutions and was awarded by NESDA as Person of the Year 2019, National Friend of Service in 2017, the Richard Mildenberger Outstanding National Officer in 2017, the National Electronics Servicing Dealers Association, the NESDA Person of the Year 2015 and the General Electric President’s Award for Service in 1999. He is also a certified 6 Sigma Green Belt.