As a customer, when you buy any home appliances like TV, AC, Refrigerator, Home Theatre or a brand new car, you get a company warranty along with it. This is the commitment from the manufacturer that if any problem arises in the product or spare parts within the warranty period, then company will repair or replace it free of cost.
- Base Warranty – original warranty coverage provided by manufacturer at no extra cost, since it is included in the product price.
- Extended warranty – this comes into effect after the base warranty expires.
- Warranty reserves – amount of money set aside by manufacturer for the purpose of servicing the warranty claims. This is based on the forecasted warranty costs.
It can help in significantly improve the early warnings of parts failures based on customer complaints and failure patterns, combining structured data with un-structured data (such as call center records) to give alerts and information about developing trends that would have gone unnoticed earlier.
- Data mining to Identify the patterns of claims
- Text mining to identify problem areas and fixing them, instead of technicians trying to select from hundreds of warranty categories
- Predicting the expected number of claims or cost of claims
- Predicting fraudulent claims
- Investigating the association between different types of claims
- Identifying issues before they become showstoppers
- What-if analysis such as if we increase the mileage what will be impact on warranty costs
- Increased customer satisfaction, product quality & brand reputation
- Tremendous impact on bottom line due to early issues identification
- Huge reductions in total manual claims processing costs
- Prevention of fraud on warranty claims
- Optimized warranty policies for maximum financial performance
- Increase efficiency of support logistics such as optimum stocking of replacement parts or deployment of technicians
- Our competitors just raised their product warranty from 3 years to 6. If we do adopt the same, how much more warranty costs we will incur? If we don’t, how much revenue we will we lose from reduced market share?
- Given a new product with no historical data, should we play it safe and offer only a one year warranty, or can we offer a three year warranty to improve our brand perception?