Warranty as a Competitive Advantage

Warranty as a Competitive Advantage

May 05 | 2:05 PM - 2:50 PM (ET)

In order for companies to effectively sell products and associated support contracts, they must fully understand their cost of doing business to appropriately price new products and service offerings.  Support costs per product shipment or contract have historically been illusive if not all but unobtainable for many companies.  Product warranty and support cost data, if leveraged correctly, are a substantial decision support base to build those new product and service offering pricings on.  In addition, operating margins can be optimized if the ‘true cost’ of product support is known. What is the cost of support per product shipment over the life of the warranty period?  What does it really cost to support a product per year over a multi-year contract?  What is the actual cost of supporting varying contract service levels between customer offerings?  Service and manufacturing companies are faced with these questions on a daily basis.  As part of eliminating inefficiencies in the business, or not ‘leaving money on the table’ these cost liabilities must be actively tracked and managed.  Communication of this data to product engineering and support for the improvement of quality is also vital. Understanding what the actual costs are, the drivers of those costs, the effect of shipping volumes and multi-year contracts, and to which products or service they relate to is a key element of leveraging this crucial data asset.

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