Customer loyalty is in decline. Brands must continually innovate to meet customers’ evolving expectations by delivering modern products and best-in-class shopping experiences.
The reality is that 83% of consumers report that customer experience is a key factor in their decision-making.
For a merchant to win a customer these days, they must exceed expectations at each stage of the customer loyalty loop. When customers enter the loop, whether online or in person, they will always consider their options first, before evaluating a select few. Once customers decide to purchase, their loyalty hinges on merchants’ ability to service any post-purchase product needs.
Merchants who own the post-purchase experience do so by adding maximum value.
Value-added services have been the new wave in innovation for the better half of a decade. The wave began with free shipping and later one-day delivery. Then machine learning revolutionized personalization, before doing the same for product protection. All of these services are valuable, but only product protection drives the customer loyalty loop — because it keeps customers using your products.
Product protection was previously only available to the top 1% of merchants, but now, thanks to providers such as Extend, it has become easier than ever for merchants in a variety of verticals to offer comprehensive plans.
The demand for product protection-related programs is getting stronger by the year. This market is projected to reach $169.82 billion by 2027 according to Allied Market Research.
Demand is growing for a simple reason: When customers purchase a product, especially an expensive one, they want confidence that the merchant can safeguard their investment from unexpected issues or accidents.
Modern product protection plans are able to put the customer first like never before. They help merchants win the battle for customer loyalty because they turn customers into advocates.
As customers begin researching brands in the Consideration phase of their buying journey, they tend to gravitate to merchants that stand behind their products.
A merchant may offer a high-quality product, but customers want assurance they’ll be able to enjoy their product for years to come. Take that away, and customers will look elsewhere. Product protection plans provide that peace of mind. Extend’s data from its 500 merchant partners shows that on average 11% of customers buy product protection.
Online jewelry retailer Jewlr makes it clear up-front that they offer product protection through Extend, a clear indication that they care about worry-proofing their customers’ happiness. Product protection guarantees that customers can confidently enjoy their rings for years to come, and Jewlr can hand off much of the plans’ administration to Extend.
A merchant may have won a spot on the customer’s short list in the Consideration stage because they offer product protection. But then the Evaluation stage begins. Is this the right product for them? What is covered in the protection plan? How will issues be resolved?
Extend’s plans aren’t just customer-friendly when it comes to extended coverage; they are able to customize plans to cover products in ways that legacy insurance companies often won’t. For example, Extend wrote new plans that cover RealTruck truck covers and Roombas, among other items.
If a Roomba accidentally passes over a pet accident, or that prized engagement ring vanishes down the drain, Extend has plans to restore that item to the customer.
Assurant has found that extended warranties can motivate a purchase by about 25%. This is not surprising given that customers feel more confident in their purchase decisions if they know that a quick and easy resolution exists in the event of a mishap.
Everyone knows that a frictionless and fast check-out experience is critical, which means that product protection offers need to be seamlessly and elegantly integrated into merchants’ ecommerce platforms.
Integrating Extend does not complicate a merchant’s shopping cart experience; rather, Extend enhances it. Our API integrates with a variety of ecommerce platforms, which makes adding a protection plan to a shopping cart as easy as choosing a shipping option.
That high-quality API ensures that the correct Extend plan appears with the correct merchant product. Merchants can place Extend’s offers on their product pages, shopping carts, or on a pop-up modal. Extend is also able to use machine learning to test the pricing, placement, content and creative of its respective plan offers to optimize for customer conversion.
Many of Extend’s more than 600 merchant partners has seen conversions hold steady or rise after its integration. Those who leverage all three placements have sold 1.9x more warranties and in some cases enjoyed an 11% average increase in site conversion.
At this point, the merchant may have acquired a customer, but the real work of retaining that customer has only begun. Unless the merchant optimizes the post-purchase experience, especially when it comes to protection plan claims, the customer could move to a competitor.
Product failures lead to customer frustration. They may have been enjoying a nice glass of wine after a long day when the cat appears out of nowhere and knocks the glass out of their hand onto their new designer sofa. What now?
This is the critical moment for a merchant to turn a potential detractor into an advocate. If the customer purchased a plan with a legacy insurance provider, their frustration would likely double. Customers often have to wait on hold for hours trying to reach an agent, only to have their claim denied over a technicality.
A poor claims experience discourages the customer from ever shopping at a merchant again.
On the other hand, customers who have a positive claims experience are two times more loyal to the company.
Merchants can turn the claims experience into the ultimate loyalty driver by putting the customer first, using digital tools to speed the claims process. An Accenture survey reports that 94% of participants consider speed of claim settlement the critical contributor to customer happiness and loyalty.
Speed is where Extend excels. Kaley, its automated claims adjudicator, processes 98% of claims online in 90 seconds or less. Once approved, customers may receive a promo code to redeem a replacement product or be directed to schedule an in-home, in-depot, or on-site repair.
A positive purchase experience creates a satisfied customer, but it is a positive post-purchase experience that creates a loyal customer who will advocate for a brand. Extend’s data shows customers who purchase a warranty repeat purchase at a rate 4.5% higher than customers who haven't purchased a warranty from that merchant.
Product protection is no longer a “nice to have.” It is now a crucial element of a merchant's customer experience.
With Extend product protection plans, merchants are not just giving customers something they already want; they are delivering an exceptional customer experience from Consideration to Post-Purchase.
Happy customers might purchase again, but loyal customers repurchase and refer others. According to American Express, happy customers will share their positive experiences and refer approximately eleven people. This is how great brands get built.
With customer loyalty becoming ever more difficult to achieve, adding Extend plans has become one of the easiest ways for a merchant to stand out from the crowd. Request an Extend demo here.