October 23, 2014

The Post-Purchase Experience:

More than just a buzzword, it's becoming an important part of customer loyalty. Consumers who feel their service contracts can provide a better level of customer service will buy them again, just for the convenience of knowing who to call when they need a repair.

Service contracts are relentlessly criticized over their cost versus the cost and likelihood of repairs. But what about the cost of arranging for that repair? What about the cost of waiting all day for the repair technician to arrive? And what about the cost of letting an absolute stranger into your house?

Assurant Solutions, a longtime sponsor of this newsletter, is trying to expand the benefits of service contracts to include convenience and security. And it's using a claims management, scheduling and dispatch platform developed by ServicePower Technologies plc that makes it possible to arrange an appointment in one phone call and make a repair in one visit.

The platform is already proving itself with Assurant's retail and manufacturing clients selling service contracts and issuing warranties for products such as major appliances and big screen TVs. But it soon may support service technicians who need to enter the home to fix everything from smart thermostats to Wi-Fi device conflicts.

The Post-Purchase Experience

Jeff Unterreiner

Jeff Unterreiner, the senior vice president of extended protection solutions at Assurant Solutions, said there are two primary recipients of the benefits: the consumers and the service network.

"The main reason for the relationship that we have with ServicePower is really about delivering that post-purchase experience," he said. "What we're trying to do is deliver faster scheduling, faster resolutions, and in the end, just a better overall experience for the consumer."

The ServicePower ServiceOperations platform includes modules such as ServiceDispatch and ServiceClaims, which an administrator such as Assurant Solutions can use to manage third party contractors, to make appointments, to arrange and pay for parts, and to pay for labor. In addition to Assurant, it's also been implemented by most of the North American appliance, electronics and HVAC manufacturers in the U.S. market, facilitating more seamless network communications.

Unterreiner listed three key benefits of the platform for consumers: 1) being able to schedule appointments in real time during the initial phone call, 2) getting repairs scheduled sooner than was typical when callbacks were required, and 3) more first-time fixes during those initial appointments, because the repairman brought the right tools and parts.

The post-purchase experience, he said, is twice as important to the consumer as the pre-purchase experience. "Whether they bought a service contract or not," he added. "It's really about handling that customer experience, and thinking about that customer's point of view first. Ultimately, if that service goes well, it drives them back to our partners for residual purchases, services, or accessories."

Among Assurant's users, customer satisfaction levels are rising, he said, particularly in regards to the faster turnaround times. "What we're trying to do is to take care of the customer first, make sure that they understand that everything begins and ends with them, and that the post-purchase experience is key. That will ultimately lead to greater lifetime value and brand loyalty," he added.

Helping the Service Provider

However, the service providers also benefit, he noted. They'll spend less time doing diagnostics after they arrive, and they'll need to come back for a second visit less often. During that initial call, the agent can make some basic diagnostics, doing some troubleshooting and narrowing down the problem to be faced by the service provider. Then after the scope of the problem is clear, the agent and the consumer can schedule the repair call.

"It does the troubleshooting on the front end," he said, "and it allows us to schedule those calls while we have the consumer on the phone."

He said the platform has so far been deployed primarily for the benefit of Assurant's OEM clients, who develop the troubleshooting scripts and diagnostic procedures for the call center agents to use. Most of these OEMs are making and selling major household appliances such as washers, dryers, refrigerators and stoves, though there are some electronics products in the mix as well. Most of the callers are looking for service under their product warranties, extended warranties or service contracts, though there are also some customer-pays calls as well.

Marne Martin

Sometimes, a manufacturer might prefer to do its own claims administration and operating its own call center. This means they too need to be using ServicePower, so they can communicate with the service provider network.

Marne Martin, CEO of ServicePower, said that ability to schedule a repair appointment during the consumer's initial call is an incredibly important feature of the platform. And so is the prospect that the service provider will show up at the agreed-upon time with the required parts and tools, and will complete the repair on that first visit.

"That's something that all of us are so passionate about: driving first-time fix and predictive intelligence regarding product usage," she said. "But ultimately, one of the things I love about the ServicePower platform personally is that not only do we drive economic value with our clients, but we actually touch their customers. We make their customers' lives easier. We facilitate people showing up at the time they want them to show up. And the technician that shows up has the right skills and the right parts."

Improved Customer Loyalty

Martin said the customer experience is now much more than a buzzword. Now, it's a differentiator, and it drives up customer retention rates for both the products being repaired and the service contract programs that are paying for those repairs.

Let's face it: the appeal of extended warranties and service contracts declines as some products become less likely to need repairs and other products become more likely to be discarded and replaced when they break. However, it could be reassuring to know that there's a service network out there with technicians that are capable of showing up when promised and fixing things the first time. It might even help drive sales of service contracts.

And then there's the safety aspect. "Having the ability to have a credentialed, safe technician with a background check coming into your home, and knowing that you're going to get, if not a branded service, a W-2 professional that has been vetted and shows up when they're supposed to," she said, "I think that's very important to people. When consumers buy extended warranty contracts, I think they're doing it not only for the economics of it, but also for the reliability of knowing that when they call someone, they'll show up. And knowing that person is safe to bring into the home. And also the first-time fix rates."

Mark Homer

Mark Homer, the chief operating officer of ServicePower, said the key to a successful first-time fix is to ask lots of questions during that initial phone call with the consumer. "But more and more, we're collecting an awful lot of data," he said, from both manufacturers and administrators, about product failures and claims. And that database gets larger all the time.

"We're looking at mining that data, and using some predictive intelligence algorithms," he said, to anticipate what might be the problem. "Then we can start advising the agents: these are the likely failure rates; these are the likely components that failed; this is the sort of parts stock you should be carrying."

As new generations of Internet-connected and Wi-Fi-enabled products come online, the ServicePower platform is gaining the ability to connect to them for remote diagnostics and triage. "It very quickly allows us to identify what the actual product is, because sometimes that's a big problem for technicians: to know what it is they're going to. And then it allows us to manage things like inventory."

In the future, the platform could go deeper into predictive failures, where the system looks for certain patterns and characteristics that typically precede a product failure. Parts could be ordered and the consumer could be contacted to set up an appointment, before they even know they'll need one. It can all be configured into the ServicePower platform on an as-needed basis.

Contractor Certifications

Homer said the platform also includes capabilities such as the recruitment and then the credentialing of the independent contractors. "We allow them to submit their certifications and their qualifications, and evidence of their capabilities," he said. "And we have various links with the testing agencies to authenticate and validate engineers."

With the incoming claims, ServicePower's platform can validate the claims, making sure that the required digital photos or signatures are included, and that all the required data such as serial numbers has been submitted. And it can quickly figure out how much to pay the contractor for parts, labor, and expenses. Then it can generate reports regarding what's been done.

In the U.S., many of the OEMs and TPAs use ServicePower to also manage the payments to these independent contractors, Homer said, while in Europe many of the service providers have their own direct payment relationships with these companies.

Martin agrees, and said the platform can be enhanced to support more connectivity to smartphones and tablets, not to mention GPS and other adjunct services. At some point, a technician who finishes a job early could use an app to request another task, based upon both their capabilities and their location.

Or perhaps the call center agent will be on the phone with a consumer at that very moment, and will be able to ask them, "Would you like someone to stop by in a few minutes?" It's all possible with the technology now being deployed, she said.

"We have very deep and rich, and highly-configurable functionality in warranty claims entitlement," she said. She estimated that in the U.S., among both manufacturers and third party administrators, ServicePower has a market share above 60%.

Its primary competitor is ServiceBench, which is now part of Asurion LLC, following its acquisition of NEW Customer Service Companies Inc. In years past, 4CS Inc. was another significant competitor, but not so much since its acquisition by Parametric Technology Corp. (PTC). And then there is still a significant slice of the market that is running their systems based upon homegrown solutions.

But above and beyond a claims management system, the ServicePower suite also provides dispatch and scheduling functionality that some of those homegrown systems probably don't. And it's provided in a way that it can be used by hundreds or even thousands of independent contractors who perform the actual house calls and repair services.

"We're continuing to leverage our dominant position in warranty claims entitlement and third party contractor dispatch," she said. "But as this vertical has evolved, we're also positioning more our connected services platform, because what we're good at is connecting the factory and decision-making regarding manufacturing, to a TPA regarding what they're going to offer in terms of policies, to the end customer -- the person who has the cellphone or the appliance or what have you."

Driving Up Customer Satisfaction Rates

The contractor management is a key capability, Martin said, particularly the ability to dispatch independent service providers to the consumer's home. Ultimately, she said, ServicePower is driving up the efficiency of the repair process by driving down the cost of processing the claim, and by showing up on time with the right parts. And that, in turn, drives up the satisfaction level for the customer, whether they're receiving the service under a warranty or a service contract, or if they are paying for it out of their own pocket.

"Assurant is one of our largest clients," she said. "We offer the software that enables them to do their warranty claims entitlement and third-party contractor management. And we're also working with them to roll that in their international markets."

There's also a drive to push the envelope in terms of products covered. For instance, some of the service providers might fix exercise equipment, or reconfigure Wi-Fi networks, or repair electric gates or smart thermostats. Through ServicePower, they can be first in line to be dispatched in their territory.

"What ServicePower does is hugely unique," Martin concluded. "While being an independent but also having the relationships with really prominent TPAs such as Assurant, that's strategically important for us. But ultimately, what's driving our roadmap and how we go to market with clients is enabling them to grow or defend their market shares, to deliver a great customer experience -- all the bottom-line productivity and value points that they need to meet for their business goals -- but doing it in a way that's ultimately seamless and which delights the customer."

More Than Just Break/Fix

The hope is to make service contracts more than just a play on the odds of needing a repair. It can also be seen as an entitlement to a better level of customer service -- arranging an appointment on the first call, getting a repair on the first visit, and knowing you can trust the guy who shows up to do the work. That's a lot better than letting your fingers do the walking.

"We're trying to make the customer experience better, and more fulfilling for the end consumer," Unterreiner said. "And to do that, you really have to be tied in to a number of places. One is the service network. Two is parts availability. Three is the customer care touch point on the front end. It all works together. It's very difficult to make it work when any of those three are disjointed."

Compare that to a situation where the appliance fails outside the factory warranty period, and no service contract was purchased. The consumer will have to dig out the Yellow Pages or do some Google searches to find a repair shop, and may not get an appointment during that initial call. The repair may go well, or it may not. It could stretch to multiple visits over days or weeks.

In other words, there is a value in being able to set up a repair appointment during that initial call, for the repair to take place as soon as possible, and for it to be the one and only visit that's needed to fix the appliance. It's the convenience of knowing who to call and the safety of trusting who they send. It's not just a play on the odds of needing a repair during the coverage period, and a gamble on the cost of the service contract versus the cost of a customer-pays repair.

And that, Unterreiner suggested, will raise the value of a service contract in the minds of the consumer. It's not whether or not the coverage is needed. It's knowing who to call if it is needed. And it's knowing that they won't waste your time.

"One of the things that we're constantly faced with is the annual Consumer Reports alert that says 'Watch out for service contracts,'" Unterreiner noted. "We're trying to turn that paradigm around to say that service contracts are here for a reason. And that reason is to have a better customer experience, to provide peace of mind for the consumer, and ultimately to create loyal customers for our partners."





Assurant Solutions Shed The Light
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