Warranties are like parachutes. You know you need one, but you hope you don’t have to use it -- at least, that’s what we’ve been told (cue dramatic music). Extended warranties have become a $40 billion industry, according to Warranty Week. Whether they’re worth it is still up for debate. As the maker of a consumer product -- primarily cell phone charging stations -- I’ve had to answer how to handle warranties and product quality from the start. Everyone wants to know the same thing: What happens if it breaks?
Here are three guidelines that led me to our lifetime warranty and will help you write a warranty that doesn't suck:
1. Keep it simple.
Your customers shouldn’t need legal expertise to do business with you. It’s not uncommon for warranties to be so convoluted and complex that they’re essentially unreadable.
I remember the early days of my company, trying to home in on what to cover. I tried a three-year warranty and then a one-year warranty and everything in between. “Well, let’s cover a lightning strike but not a shark attack. Or should that be reversed?” We went back and forth with legal until it clicked: I can’t possibly forecast every nuance of every event or incidence.
When making decisions for my business, I often come back to the golden rule of treating my customers as I would want to be treated.
Your customers want to know exactly what they are getting and that you're going to stand by it. Impress them by how simple and straightforward you can be. Write a warranty you can explain easily and quickly. In a business landscape of fine print, your simplicity will cut through.
2. Be on their side.
The culture and industry of warranties has muddied the water. It’s hard for consumers to navigate the difference between smart extended warranty purchases and ineffective, fear-driven ones.
The word “warranty” can have plenty of different meanings depending on the company or industry you’re dealing with. Will you have to pay a fee to fix your problem? Will you have to wade through miles of red tape to file a claim? Is your issue even covered?
Underlying the warranty dance is a fear of subpar products. If a company cuts corners, then their warranty is a marketing scheme, not a stamp of quality. They win when they sell you something you can’t use or don’t need. No wonder consumers are distrustful.
Writing a warranty that serves your customer (and doesn’t suck) means being honest and handling issues with integrity. For example, a few years ago, T-Mobile bought a few of our charging stations to place around Seattle’s Space Needle. One (more isolated) unit had its display screen stolen. I flew out the next day to see how we could not only fix the unit but also prevent a repeat incident. I ended up securing it with airline-grade security rope, and it hasn’t been taken since. Sure, I could have just sent them a replacement unit, but for me, it was a chance to communicate to my customer “I have your back. You can trust us.” I want my warranty and protection plan to reflect that.
When fulfilling warranty claims, go above and beyond. Give refunds, replacements or discounts. Make phone calls, write personal emails, send flowers -- whatever it takes. Treat your customers like humans, and surprise them with your understanding and empathy. If your customers feel like you're on their side and not fighting against them, you'll have a customer for life.
3. Improve thyself.
I love warranty claims. They provide some of the best data on how business owners can improve their products. You can prototype until you’re blue in the face, but nothing beats the feedback you get when your product is out in the wild.
Recently, some of our units were being vandalized at a mall -- the phone charging cables were being ripped out. This issue highlighted a vulnerability in units placed in more public places. So, we developed stronger cables and figured out how to secure them better. It wasn’t our fault that the cables were being taken, but it was a chance to improve.
I remember early on in the business, we had a customer who kept having her unit damaged between events. So we helped design a traveling case for her. Duh! Of course, we should have been offering cases. But we needed that claim to have the “aha” moment. When claim fulfillment is viewed as a last resort or just a way to make customers go away, you miss a chance to improve your product.
Pay attention to your warranties. Listen to what your customers are saying and notice their pain points. Making it right isn't just about giving money back; it's about diagnosing and correcting the issues that caused the problem, whether it's your fault or not. If you want to lead your industry, listen and improve.
In a nutshell, have straightforward, holistic warranties, and your customers will feel safe and happy. Make good products, and you won’t be flooded with claims. A warranty isn’t the most exciting business topic to cover, but the stance you take says everything about your company and your products.
