How Modern is Your Product Protection Provider?

Product protection has been around for a long time, in various forms. While the plans and companies that offer them have changed with time, most haven’t kept pace with rapidly evolving merchant needs and customer expectations.

• Programs aren’t tailored to the new and varied types of products customers buy.
• Customers’ claims submission and resolution experiences are notoriously awful, requiring paper receipts, phone calls, and up to months of wait time. 
• They don’t have the ability to enable online selling with a turnkey solution, leaving retailers to take on all the heavy lifting of implementation — discouraging many merchants from upgrading to a modern solution.

Here at Extend, our founders saw an opportunity to bring product protection into the digital age and make it streamlined and easy to understand — a truly value-added service. Other companies have also entered the product protection space with a more digital-first mindset than legacy players. 

So many options can leave you feeling overwhelmed, with a lot of questions about which provider to choose. In this article, we’ll help you learn how to evaluate a product protection provider to determine whether it will meet your business needs.

What you need to know can be categorized broadly into these five questions:

• Do the terms and conditions of a product protection program make sense for my business and my customers? 
• How much lift will be required from my team, and how will it impact their productivity and roadmap?
• Will a product protection program create a positive customer experience that builds brand affinity and loyalty?
• Approximately how much revenue will I generate from selling plans? 
• How will I be supported by the provider? Does the provider offer optimization over time?

But before jumping in, let’s first start with some definitions. What makes a product protection vendor modern? 

What makes a product protection vendor modern? 

Modern product protection platforms have brought a legacy holdover product into the digital age. The benefits and coverage offered by those legacy incumbents have not kept up with the pace of product innovation or customer expectation. But modern product protection is different — it’s tech enabled, vertically integrated, and built with a customer-first perspective.

Technology-enabled

Modern solutions make buying and selling protection plans a seamless part of your customer journey, both for your customers and your own back office. Tech-enabled product protection circumvents a huge issue with legacy incumbents — they don’t know how, or have the infrastructure, to support omnichannel retailers.

Modern product protection integrates seamlessly into your retail tech ecosystem, enabling you to sell across online, in-store, and telesales. Your vendor should be able to integrate deeply with your existing tech stack so that they can partner with you to manage and maintain your protection program. 

Technology-enabled product protection creates customer-first experiences, as well, like making digital claims submissions available 24/7.  If a provider doesn’t have a way to integrate into online systems, strongly consider finding one that does.

Vertically integrated

Protection plans may seem relatively straightforward but there’s more complexity below the surface. The obligor has control over pricing, projections, and the assumptions that go into risk and performance. The administrator is responsible for handling claims and service obligations. 

The more elements of that complexity that a single vendor owns, the better. 

Modern solutions bring as much of that stack as possible together in-house, giving them the flexibility to create custom plans and go to market fast — with a white-glove claims experience for every customer.

Some tech-enabled solutions may not be their own obligor or administrator. Be aware that solutions relying on a third-party obligor will be limited in their ability to customize programs and take them to market quickly. And customer experiences via third-party administrators (usually an insurance company) are rarely “white glove.” 

Customer-first

Modern protection plan vendors focus on creating products worth buying, and delivering a modern experience. Traditionally, legacy plans were not written with the customer in mind, and the claims process certainly wasn’t built for customer delight. 

The goal of a modern protection plan should be to keep customers using a working product. In fact, its whole purpose is to provide a cost-effective way to repair or replace a product that they love. But so many legacy plans are full of the “gotchas” that lead to frustrating experiences and denied claims. 

As you likely know, customer experience from some of these traditional insurance companies is notoriously bad. Modern solutions are able to optimize for merchant and customer success and satisfaction.

Evaluate product protection partners across these four categories

Modern solutions are designed to be customer-first, from the technology, to the design and UX, to the programs and experience in the claims process. Use these four categories to evaluate a product protection vendor’s ability to meet your unique needs.

Program Quality 

Do the terms and conditions make sense for my unique business and customers? 

The quality of your provider’s programs should be your top concern. So much else — from your customers’ experience to the revenue you make — depends on it. 

Traditional protection plan providers have long delivered off-the-shelf plans rather than innovating based on merchant and customer needs, and many digital-first vendors use them, too. But, by and large, one-size-fits-all solutions aren’t keeping up with the needs of today’s products or with customer expectations.

A high quality, modern product protection program should include:

• Tailored plans specific to the products they protect and coverage of likely malfunctions or accidents.
• Easy-to-read terms and conditions. Customers are more comfortable buying (and are more likely to buy) products that they understand can benefit them. 
• Seamless claims adjudication and fulfillment without the gotchas that have given “extended warranties” a bad name for so long.

Modern solutions can align to your specific needs and the needs of your customers. That takes a team that understands both the technology and the business side.

One final note: a protection plan is considered a legal contract between a consumer and the obligor. That contract is filed with regulators in several states and must be approved by regulators before it can be sold to consumers. A quality provider will make sure all compliance regulations are met and that you won’t be subject to any legal risk. 

Customer Experience

Will my customers receive an experience that makes this program a net positive when it comes to loyalty and lifetime value?

The customer’s experience submitting and resolving claims is incredibly important, because they will associate that experience with your brand — whether or not you had any input into the process. 

Legacy plan providers are still asking customers for a covered product’s paper receipt, finding ways to reject, instead of approve, claims, and leaving customers waiting for their repair or replacement. 

Modern customer experiences must be seamless, convenient, personalized, and speedy:

• Multi-channel claims submission so customers can use the channel with which they’re most comfortable
• Simple, hassle-free process that doesn’t require customers to find an old paper receipt
• Fast adjudication and fulfillment. Customers don’t want to wait — keep them using the products they love.

You’re giving a third party access to your customers during a critical piece of the customer lifecycle. Make sure that entity can deliver the white-glove service your customers expect.

Onboarding and enablement

How will the lift of getting started impact my team’s productivity and roadmap? 

Integrating a new system into your tech stack can be a big internal lift — but it doesn’t have to be. If you’re running an ecommerce shop or an omnichannel retail operation, you don’t want to get bogged down in a heavy technical implementation and rollout. 

Modern vendors offer both technical and marketing onboarding support. Some things to look for:

• A dedicated account manager
• Technical resources for integration, SKU mapping, and maintenance
• Co-marketing materials 
• Enablement for customer service and field sales

You’ll also want to know how long it will take them to get new programs up and running or to add new products to your catalog as you expand.

Performance optimization

How will you help us optimize the program for greater revenue generation?

Offer placements. Clear, compelling copy. These are all elements of your product protection offering that you can optimize over time for greater success. But your marketing team has enough on their plate — and may not have sold protection plans before. Leverage product protection experts that can help you get set up and optimized based on your own store’s performance.

Look for providers who can help you optimize the best placement and performance. You’ll want to know all the different channels through which you can sell their plans.

The most important metrics to watch are conversion rate and attach rate. A modern solution provider can help you optimize for both the offer placement and promotion itself, as well as the consumer-facing price to achieve the highest revenue.

A vendor committed to your success will provide proactive performance reporting and offer suggestions for improvement. Some things to look for:

• CRO specialists to support A/B tests
• Email experts to support post-purchase touchpoints
• Ecommerce marketing experts to design and craft compelling offer surfaces across channels
• Regular business reviews

The optimizations shouldn’t stop at marketing and merchandizing, though. As time goes on, tweaking copy and placement will have less impact, and you’ll need to go back to the basics. You’ll want a team ready to reevaluate term lengths, conditions, pricing, and more, to provide the best opportunity for revenue growth. 

Choose a modern product protection vendor to support your growth

Shoppers see the fruits of retail innovation around them every day. Amazon sells protection plans, features one-click checkout, has one of the most robust loyalty programs in the world, and single-handedly nudged us from thinking five-day delivery was a miracle to wondering why it can’t be here overnight. Other big retailers like Walmart and Target are following suit in one way or another. 

Expectations change fast. 

Legacy product protection companies haven’t been able to keep up with those expectations. 

There are better options out there today — some are better suited for modern merchants than others, but with the guidelines in this article, you’ll be able to determine the things you really need to know before integrating with a protection provider.