015: Crafting Warranties That Resonate With Your Audience and Differentiate Your Brand

Speaker 1: 0:00

Welcome everybody to the brand fortress HQ podcast. This is another tactics Tuesday, and today. What we're going to be diving into is something that has been around for a long time, especially on Amazon, but, quite frankly, a lot of brands don't really know how to use it efficiently, and we're going to be talking about warranties Now. We're lucky enough to have Mike with us. Mike has been using warranties very effectively with his brand and I think that you're going to get a lot out of what he has to say about warranties and how he's been able to incorporate them, and he's going to be able to incorporate them in his brand and be successful on Amazon. So with that, mike you know, let it start us off with kind of how you got started with a warranty on your brand and what impact it's had as you built your brand over the last couple years.

Speaker 2: 0:46

Sure, yeah. So I mean, we've been selling on Amazon for about nine years and we have had a lifetime unlimited free replacement warranty since the beginning. To be honest, when I first started I wasn't sure if it was a mistake. It was, at the time, the easiest way that I could come up with to differentiate our brand from everybody else on the platform, because I was literally just re badging a product that I was buying from a manufacturer that hadn't made any changes to it at all. It was the exact same product they sold to other people. And because I was just testing the waters and didn't really know what to think about how Amazon was going to go, that just seemed like the simplest solution and I figured, if it goes well, well then I'll be able to stand behind that warranty and I guess, if it doesn't, well then I guess I won't. But and so that was kind of the beginnings of it I didn't really know what I was going to do with that. I really had no, I had no inclination that it would be used as kind of a post purchase list builder. Let's say I wasn't looking at it that way. It was just a differentiator. And you know, it's interesting because with warranties. I think there's a few things that can easily be done incorrectly, let's say. I think one of them is to use a warranty to differentiate yourself, but then not stand behind it, or maybe a better way to say that would be not so much that you don't stand behind it, but that you do it like every other company does it, which is you know, okay, I have this warranty, but it only covers defects, and you know most of the things that you call me about. I'm probably going to tell you that it's not covered because it's not a defect. You know, like, we didn't make a mistake, so we're not going to replace it. And the problem is I think this is probably true online in general, but it certainly is true if you're selling on Amazon, and that is because reviews have essentially become gospel. If you have a warranty and you run it that way, then you will likely have more negative reviews than positive reviews in relationship to the warranty, because people are just going to be ticked off that you didn't stand behind it.

Speaker 1: 3:01

Right, and so I just have to double click on that. I mean, whether on Amazon or off Amazon. I think I feel like everybody's had that experience where you had a problem with a product. It's supposed to be under a warranty. You try to claim the warranty and they're like you know, do you have your receipts, do you? You know what's your order number, and they need all this information in order to claim the warranty. And it becomes one of these things where, unless it's a really expensive product or you're really motivated or really mad for whatever reason, you just don't take the time to go through that process because it's too much of a headache in order to submit all the details, talk with customer support, wait for the replacement product and kind of everything that's involved in that warranty process is usually a bad experience for the customer Right.

Speaker 2: 3:52

And the thing is, too, that you know let's take that scenario and carry it out a little further. You know, so you've got a standard warranty. You know maybe you advertise it as being something more than everybody else like. Maybe you know everybody in your category either A doesn't have a warranty and the fact that you have one at all is a step up, and you know it appears to be from a marketing perspective or maybe they've got a year. You give two or three years, you know. So you're using it as a differentiator right, which, as a general rule, if you're going to use that as a differentiator, then either A you're using it so you can price higher, or B you're using it so hopefully you'll get better click through rate and conversion rate at the same price, or C you're hoping for both right, you want to charge a little more and you want to have, you know, better click through rate and conversion rate because of that warranty. The problem is over time. You know, if you carry that forward and you treat your warranty the way that everybody else does, whether you have a two year or three year compared to a one year, or you have a warranty versus not, you know if, again, most of the warranties are basically getting, you know, not approved. You know, for whatever reason, or even if it's just a significant number, it doesn't even have to be the majority you might you literally might approve 70, 80% of your warranty claims right Now. I would argue a lot of companies don't. But let's see, you did Remember people are far more likely to leave a review or a comment regarding a negative experience than a positive one, and that's especially true if the positive experience is almost more neutral than positive. So let's say for that 70% of users, or even 80% of users, that you approve the warranty. They still have to kind of jump through the hoops. It still takes time. There's this back and forth between them and your customer service reps and they're answering questions and they're going through all this. And let's say it's a 30 or $40 item, even right. How many people are looking at that and saying, okay, but I just spent 45 minutes to an hour to two hours, depending on the scenario, and how many questions and how many days did it take in back and forth communications? Yes, they finally got their replacement, but they still had to jump through a bunch of hoops. They had more time than it should have they wasted their time when they could have been doing something else? And so essentially, even though from your perspective you might be seeing that as a positive experience because you technically stood behind the warranty, at best, I would consider that a neutral experience for most customers, and a neutral experience is not going to get you a five-star review. If you're lucky, it gets you no review, because if you're unlucky, yeah.

Speaker 1: 6:32

I'm going to say there's value in even preventing a one-star review. So I mean, it might help you prevent a one-star review, but it's definitely not going to motivate customers to write a five-star review, especially after they've had a problem with the product.

Speaker 2: 6:49

And many of them. How many people have written you a review that it reads like a five-star at least, you kind of think in your head like there was nothing negative. Let's say right, they wrote a review, everything in it seemed positive, but you got four stars right. Now, a lot of sellers would be annoyed by that. There was nothing negative in the experience. Why didn't I get a five-star? Why are all these people giving me four stars, right? Well, think of it as a percentage right, Like I mean, you took a test. Like four stars is 80%. That's a B-minus right. Well, if the experience was generally positive but wasn't amazing, that's about a B-minus experience. Maybe it's a B, maybe it's a B-plus, right, but it's not a five-star. A five-star is 100%. That means you knocked it out of the park. You did way better than everybody else did, so you should expect four-star review or less. If you're not knocking it out of the park. Some customers are going to be nice and they're going to be a five, but a lot of them won't. So that's scenario. So now you've got 80% of your customers that file a warranty claim. They jump through the hoops, but they get their warranty, so they probably don't leave you any review, because it's not like you really left any real impression on them, right? In almost a worst case scenario, they leave you a four-star review as opposed to none, because now, you're not going to get a five-star with a bunch of four-star reviews, right? But then the 20% that you denied they're mad, so they're going to give you a one-star review, right? So essentially, all you're doing is creating a negative review profile for your product, so you didn't differentiate yourself at all in a positive way and, in fact, if anything, probably in a negative way, because people are paying more for your product and your review profile probably will be worse than your competitors, or at least no better. And so for us, the thing about our warranty is we have to look at it from a number of perspectives. One of them is, if we want to charge more for a product that we're offering a really good warranty for, then we better have the review profile to prove that it's actually worth that price, and that means you better have something approximating a five-star review profile, or at least four and a half stars, where everybody else in the category maybe is three and a half or four. And so the only way you're going to do, that is if you really are knocking it out of the park, and so I would say that's the other area where people make.

Speaker 1: 9:12

That biggest mistake is that, I would argue, you are better off essentially approving every single warranty claim that comes through, so that you have an opportunity to prove a couple of things, but I just think that brands are going to have questions about, or people listening are going to have questions about. So the first is going to be I imagine a lot of brands out there probably have already kind of tested offering some sort of review and they say people don't use the review and they just leave us the one star or they don't register at all for the review and it seems like it just basically you mean the warranty, sorry, the warranty yeah, and it just seems like it gets ignored. So what advice would you have out there for sellers that are listening, that are saying, hey, I've tried a warranty, it didn't work for me and my customers basically just ignored the warranty, right?

Speaker 2: 10:10

I would say a couple of things. One is extreme but believable. Our warranty is generally unbelievable. It's extreme and unbelievable and, as a result, I actually think that if it wasn't for the fact that at this point we've developed such a massively positive review profile I mean, virtually every one of our products on Amazon is 4.8 or 4.9 stars and thousands of reviews. So that's really hard to do. That builds a lot of credibility and so if you don't have that, that's tough, and so, you know, I would say that credibility piece is important and and makes it, you know, useful, but in terms of like, oh hey, it didn't work for me. So when I say extreme but believable, I'm coming back to that space where you know, if everybody else in your category is offering a one-year, then you are for a five-year or a seven-year or at least a three or four year. Right, it is extreme, it's many times above what everybody else is offering. So it gives you an argument to be made for a higher price tag, right, and so that's a. It gives you and I would say that the other thing about the believable piece right, it's extreme, it's way above everybody else, but it's believable. There's a cap on it, right, ours doesn't have a cap, so it's not believable. The only reason is is because we have the review profile, but if you're starting out with this, you don't have that.

Speaker 1: 11:38

So let's just kind of clarify there. So what with your warranty? You, as for your brand, you offer an Essentially a lifetime unlimited warranty unlimited for your replacement for life? Yep, okay, which is? I mean, I would put that as a pretty extreme warranty. And so what you kind of find with that is is that and I and I think this is important to double-click on is, if ever, it's relative to your category. So again, if everybody's offering a one-year warranty, if you offer an 18 month warranty or a two-year warranty, like there's not enough difference there to really move a needle. If you're a customer, you really have to have something that's probably at least three to five times better. So three, three or two or five year warranty.

Speaker 2: 12:18

Well, I think, I think three to five X is really that sweet spot. You know, I mean you, you might want to play around with it a little bit, but I would say at least three X what everybody else is doing, yeah, okay and then making it believable.

Speaker 1: 12:29

So I think that that's a great point. As far as you know, even though this has worked out for you, I think one of the Just in our previous conversations it's it sounds like one of the struggles that maybe you guys have is your warranties almost too good. If you can talk a little bit about that and the believability piece.

Speaker 2: 12:45

Yeah, it's just. I mean I think it affects our click-through rate, right, and our conversion rate, because you know I mean just put yourself in our customer shoes, right like Basically nobody else in our category virtually offers a warranty at all and any of them that do most of them Maybe it's a one-year. There are some lifetime reviews they're hard or lifetime warranties, but hardly any and they're really small players. You know they don't really stand behind it. So you know, if I'm a customer in that space and I see a product that says that they're gonna give me free replacements for that product forever, I'm, you know, I'm not gonna believe that. Now there's a certain percentage of individuals that are gonna take the time to read the reviews and you know we have glowing reviews. I mean like it's not just five star reviews, like I mean we have a lot of images and video. We've got long. You know these entire, you know Three, four paragraph, you know reviews of our product that are just glowing and half of the review is about the warranty process. So if they take the time to read the reviews, they find that it's credible and they buy it. The problem is a lot of people aren't going to take the time to do that. It already sounds unbelievable, and so they're just gonna skip it. And so I would say make it believable, you know, make, put it, put a cut on it, you know, make it out there, you know, but put a timeline on it, because I also think it gives you the opportunity to calculate, right, like in terms of your marketing. If I have a 10 year warranty and everybody else is a one-year warranty, well then essentially my product is worth 10 times as much as everybody else, right?

Speaker 1: 14:16

And so better for you or for the customer, in the sense of for them to differentiate as far as like. Oh, if I'm looking at, two products are close to the same price, but this one offers a one-year warranty and that one offers a five-year warranty. I'm gonna buy the product that offered your five-year warranty because I'm protected right, both.

Speaker 2: 14:33

I would say it's easier for you as the seller, because it's easier to quantify the value of what you're offering, right, but it's also easier for the customer. Even if you don't explicitly calculate the, the value to them, they can calculate. Right, it's not that hard. Like it's a three-year versus a one-year, okay, well, it's worth three times as much, you know, or whatever you know. And again, though, the review profile is gonna make a difference there, because, again, it's either going to add to or detract from the credibility of that warranty. So, you know, if you've got a three-year versus a one-year, but you've got a four-star and they've got a four-star, four-star on the extreme warranty is not, you know, that doesn't make it more credible, it makes it less credible, because you would think you know, like, if I'm the customer shoes and I'm looking at a product that has a three-star or a three-year warranty and everybody else is a one-year, if the manufacturer makes that process easy and always stands behind it, I expect that everybody's gonna give that a five-star review. So if it has a four-star, for me that's already a red flag. I'm walking away, you know. So the review profile matters, and so for us, you know that next step is the thing right?

Speaker 1: 15:40

It's the post purchase process, if you so let's before we dive down that, because I think the other burning question that the listeners are gonna have around a warranty, or kind of the skepticism, is like okay, if I offer you know a very powerful warranty that's easy for them to redeem, you know, percentage wise, probably 90% of my customers will never redeem that warranty. A small percentage will, and there's gonna be that one to two percent of customers that just quite frankly abuse it, because that's just the rules of numbers. So how, as a, as a business, as a brand, do you protect yourself from that small percentage that will abuse the warranty if you don't have a plan in place?

Speaker 2: 16:24

Yeah, yeah for sure. And before I answer that, welcome, matt, glad you're here. So so that the the the idea there is, basically you need an exit clause. Essentially Now, as a brand, always talk to your attorney, you know, make sure that you know you feel like you, you've done this in the proper way to protect yourself. But but our exit clause basically is the warranty is unlimited free replacement for life or a refund I mean, it's not quite worded that way but unlimited free replacement or refund for life, right? So essentially what that does is it provides an escape clause to the customer and to us. So at any time and at any point in, you know, throughout the life Well, their life essentially they can request a full refund and we'll give it to them. Okay, I'm not necessarily saying that you have to offer it that way, you know you can find a way, but for us, not only does it have an escape clause for them that can request a refund whenever they want, but also it gives us an escape hatch. So let's say that we have a customer who is clearly requesting way more replacements than we expect would be normal, right, at some point we can make the decision and say we need to extract ourselves from that relationship. You know, for whatever reason, either a they're abusing it or b they're just way harder on the product than than, you know, a normal customer would be. We cannot afford to continue to provide, you know, re, you know replacements for that person for life, if they're gonna request one, like every month. So we refund the product. Now you might look at that and you say, well, now you never made any money at all. Well, I'm not, I didn't make any money anyways. Right, they've requested so many replacements, I'm already in the hole. So if I don't refund them, I'm just gonna continue to go further in the hole. It's better for me to refund that order. So now it's as if we never had a relationship at all, and that extracts us from that responsibility of continuing to provide Replacements. Are they gonna be upset? Yes, you know, we've had a number of customers who've been upset. We've had customers who complained they were gonna go to the better business bureau and they're gonna, whatever they don't, you know like, and even if they did, I mean I guess that's a really hard argument for them to make if they're getting their full money back, right?

Speaker 1: 18:44

What are they gonna say?

Speaker 2: 18:45

Like I, I received ten pool rakes and I never paid for anything.

Speaker 1: 18:51

Right this is a terrible money back.

Speaker 2: 18:53

This is the worst company ever. Fast, these people like they're horrible, right, like who's gonna be able to make that argument right? You, it's not possible. So you have to have a way to extract yourself from that warranty and I think that's the best and simplest way to do it. I would also say it's important to to understand Some products will work better than others for a, you know, for a warranty process, let's say, and, and certainly that will also determine just how extreme you can get with the warranty, depending on the product. But let me give you some examples. So our product is we sell pool tools, and you know pool poles, rakes, you know brushes, that sort of thing. So for us, one of the things, there's a number of reasons why Doing this can actually be far less expensive than you think it might be. And actually let me throw some numbers out, because I just was Do some calculations because of this. You know opportunity we have for a buyer, so they wanted to know how much our warranty claims costing us. So last year, 2023, we sold approximately 75,000 units on Amazon total overall SKUs. We had 6700 warranty claims that were filed. Virtually all of them were approved and we either sent out a complete replacement or we sent out a part replacement, depending on the item. Now, all of our pool rakes right now, if somebody files a warranty claim, we have to send them an entire pool rake we don't have. They're not modular, so we can't send them parts. The new design that we have is modular so we can send them parts, which is much less expensive Because not only do we save on the actual item itself, because we're just sending a handle versus an entire rake, but we save a lot of fulfillment. Our fulfillment costs are actually double the actual product cost of our warranty replacements, so saving on the fulfillment side is massive. So Shipping right now shipping just full pool rakes and then other other items we can send parts. We Basically our the percentage of our revenue that we put out in warranty claims was 3%. That's how much that? That's the the dollar amount. So in comparison to our revenue, we spent 3%, lost 3% of our revenue to warranty claims.

Speaker 1: 21:23

However that's the other thing that I think that's important go ahead.

Speaker 2: 21:26

Yeah, I also want to say, though, before we continue on that, that if we had already instituted the modular pool rake where we could Send parts, that would have been 1.75% of our profit that went toward warranty claims.

Speaker 1: 21:41

And I think it's important how you frame that in the sense of Having a powerful warranty like that is such an powerful marketing tool but it's not really a loss. I mean, think about all the sales that you gained from having that warranty. That if you put an extra you know 3% into your ad, you know your Amazon ads or you know Optimizing your listings or whatever, you would just consider that a cost of doing business and you want to have nearly the same impact as you would with the powerful warranty that you have.

Speaker 2: 22:13

Yeah, exactly, I mean the word of mouth that we get out of that, the review profile that we have as a result of it. You know, like all of that is due to that warranty and I would say the warranty coupled with an automated system on the back end that basically rubber stamps almost every warranty. So I mean essentially, when a customer comes and files a claim with our company, 90 seconds later they have an approval and, you know, two to seven days later, depending on the product and where we're shipping it from, they have it on their doorstep for free. So that process Creates a scenario where we can generate massive numbers of five-star reviews because when they register we're getting their name and email address and, just to put this in perspective, 90% of the individuals who register their warranty with us, we get their physical address as well. We don't require it, we ask for it or we don't require it. They give it to us at registration. 90% of our registrations we have physical address. So we could do postcard mailings, we could do all sorts of things.

Speaker 1: 23:10

Yeah, can you talk real quickly? I think for folks that are listening probably are really curious to know what does it look like for a customer to register for their warranty first and then, secondly, what does the redemption process look like for you?

Speaker 2: 23:26

Sure. So Registration, so first of all, starts with your product packaging, right? So first of all, hopefully, on your, on your listing, you're making it very clear that this you know, lifetime warranty or whatever your warranty is exists, so that people are looking for that when they get the product. And then, once they receive it, then you need some sort of an insert or hang tag or something you know that's going to direct them to that registration page, that landing page, right? So a few things about that. Whatever mechanism you're using within your product packaging, whether it be an insert or whatever it is, I would say you need to make it such that they they have to interact with it in order to actually use the product. So I'll give an example. This I won't show, I won't show who this is, but I received this With a product that I purchased from Amazon. It's a little insert card. It was in the bag with the product and it was just sitting in the bottom of the bag. I took the product out. I Only noticed this card when I went to throw away the bag and I just happened to see it in the bottom of the bag and I and I pulled it out. Right? But how many customers of theirs, this company are just simply throwing away the insert and don't even know that it was even there, right? They never saw it at all. So you need to make sure that the customer has to interact. So either that's a sticker they have to deal with to open the box, or it's a hang tag on the product that you know like, for instance, on our Poop hole, it has holes in the end which are part of the locking mechanism for putting a tool into the end, right? They can't put a tool into the end of the item if those holes are blocked. So we just put a plastic, you know loop hang tag on there so that they have to cut the tag off in order to actually put a tool on the end of the pole. So they can't use the pole unless they interact with our insert, our hang tag. And then the nice thing, you know, and this is what I would recommend is, whatever the insert or hang tag is, I would have it double-sided and I would have it set up in such a way that it's random, that you know which side is facing up. Or if it's a hang tag, you know it's always going to be different, it's going to flop around right before they get it. So we test two different sides. We split test our ends or our hang tags. Each side of the hang tag is something different, different QR code, different. You know website address that it's going to, so that we can Track. You know how many clicks are we getting to the landing page, how many of those are converting. You know what's what's going on with that, so you can split test that continually. You know Whichever one is working. Then you just make a new iteration of that and test it again. But make sure they have to interact. That that's key. If they don't have to interact with it, then you're not going to get as many registrations. We get About 30% registration rate, maybe a little bit less than that. So you know, I mean you think about that if you had, you know, 100,000 customers in a year, you could build a 30,000 person email list in one year, targeted customers in your niche that you can sell to anytime you want, you know, as long as you're keeping that list warm.

Speaker 1: 26:32

So yeah, and I think we've talked about this before, but I just want to make sure that we reemphasize is that we talked about list. Quality is also super important, and in this case, we're talking about people that have already paid money in order to Buy your product and buy into your brand. So if we're looking at this versus an audience who maybe is interested in your brand but never spent a penny before, these really are buyers. So they're worth ten times more than just you know somebody that maybe opts into you know that free PDF or something you know, Some sort of educational asset or something else that you have out there, compared to somebody that's actually put money down to buy your product.

Speaker 2: 27:14

Yeah, for sure. I mean these are bottom of the funnel leads, right, like I mean they're. They've already bought. You know, like I mean it's. You know there's nothing wrong with top of funnel leads, obviously. You know, build a funnel. You know you shouldn't ignore that. But you know, but if you can bring people and put them on a list that have already bought from you and hopefully you're selling them a good product, you know, and they're going to like it, you know. So if they've already bought, they've paid you money, they already believed enough in the product that they thought, okay, I'm going to try it. Now they like it. You know, like already you've got cashier there that you can cash in on right. If you're providing them useful information through your email list, now you're just building more rapport with them. You know, and at the end of the day, the ones who actually claim the warranty, I mean they will be a customer for life. You know, if you make that process easy enough on them, they will never go anywhere else for anything that they could buy from you.

Speaker 1: 28:08

Let's talk about that a little bit. I'm glad you brought that up. So how do you make that process as easy as possible for them to redeem without it being excessively abused, right?

Speaker 2: 28:22

So, first of all, for a long time we use many chat flows and so you could use a chatbot flow. You know it works. There's a lot of different chatbots out there. It doesn't have to be many chat. It doesn't have to be many chat. It could be anything, you know. But that's an option that works and if you set it up properly, the flow can be pretty, pretty simple. You know, for the customer. Sometimes they'll end up in a spot, you know so. But we use many chat for a long time it worked fairly well and we didn't require a lot. So, essentially, from many chat, we were just looking for an order ID and then we would tie into the Amazon API so that we could verify that they actually ordered it and that it hadn't been refunded. And then, as long as that was true, then of course, you know, we were getting at least some information back from Amazon related to that order. We knew what they had ordered. We had the products you know we had where they were located, not their address, you know their physical address, but just like state, I think is what we get these days. But then we just asked them, you know, for their additional, you know like name, you know and address. They would generally provide that. We would also ask for their email address which would then automatically put them onto our MailChimp list. So now we had them on many chat and on email. Many chat became less useful over time so we really kind of you know, do we not use that at all. Now we developed our own in-house system for managing warranty apps, which small plug will be offering soon where beta testing that for other sellers. So you know that'll be available to others down the road, not too long, hopefully. But essentially the new system they, you know from the insert they hit a landing page which reiterates to them all of the benefits. So it's not just the warranty. We also have a monthly giveaway. You know it's a $1,000 giveaway. We don't give away money, we give away pool tools, you know, and it's and not our products right now. Now you could we actually just allow them to do it's just a shopping spree. So they send us their wish list of pool related items worth, you know, $1,000. And then if they win, you know we send them that right. So, but there's a giveaway. We've got a couple of ebooks, you know, with useful information about for pool owners, a few other things that they get. So we reiterate that on the landing page and then we click them over to our warranty registration system. They enter their email address and then they enter their Amazon Order ID. Once we have that, then we have their order details. We ask them for their physical address, which, again, 90% of them enter, and then that's it. It takes literally about 90 seconds. We do not require registration at the time of purchase. We encourage it. There are some things that they only get if they register within a certain time frame. But we don't require it, and the reason for that is simple I want them on my list. So if they didn't register before, but now they want to file a claim, if I tell them, well, you can't file a claim now. You didn't register right after you placed an order. Now I'm not going to get their name and email, I don't have an opportunity to fulfill in the warranty claim, which means I don't get the five star review that I know I'm going to get if I do fulfill on the claim. So it's a loss for me if I do it that way. So they can register at the point of making claim and even if they have to register and claim as part of the same process. It's about two minutes, I mean literally. It's just the registration and then we already have it. So we just continue and forward to the claim and they just hit enter. Essentially, so it's a very quick and simple process. Again, as soon as they hit submit, they receive an approval message. In rare cases it'll go for manual approval because we have the system set up so that if they requested too many, you know replacements within a short period of time, or you know it was refunded or something you know, so it'll go to manual review. 95% of them are auto approved. We never touch it at all. Nobody on our team even sees it. It goes straight to fulfillment and it just shows up on the doorstep. So it saves us a ton of time. You know we don't have any man hours involved in it, but then, once it delivers, we can then follow up with an email that says hey, did your item arrive? You know, was it intact? Were there any problems with it? Is there anything we can help you with? By the way, as long as everything went well, would you leave us a review? We don't have to say leave us a five star review. They're going to Like, why would they not? The process was so simple, so much better than anything else they've ever experienced. They're going to leave us a five star review. So we just say, hey, by the way, you know, if you haven't left the review yet, drop a five star. Or if you did update your review with your warranty experience, they always do.

Speaker 1: 33:00

So, okay, I think that gives people a really good idea of what that process is, and I think you know. I just want to double click on, first of all, how easy you make it. Whether they registered that warranty in advance or it's, you know, when they have an issue to wear in, you know under two minutes they can go from nothing to registering the warranty and claiming the warranty and getting that product you know sent out to them in order to fix their problems. So I think that's incredibly powerful. I do want to circle back to what you mentioned earlier. So let's talk a little bit about because not every product is going to be a good fit for a warranty. So let's talk a little bit about that. What products you know based on your experience, do you see warranties working really, really well, and what other products are warranties probably not a good fit?

Speaker 2: 33:44

Sure, let me? I want to. Before I touch on that, I want to hit on one thing related to. You know what we were just talking about in terms of the ease of the warranty process and how quick it is. So put put yourself in the shoes of the consumer who is trying to file a warranty claim, right? So at the front end of this, they're already somewhat annoyed because their product broke right. So there's that. Also, every experience that they have ever had in the past most likely, or at least the vast majority of them, has been a negative claim experience that required numerous hoops to jump through, took way too much time and at the end of it they didn't receive the item right, they ended up getting denied. So they're assuming you have to assume that they are assuming walking into this process, it's going to be long, it's going to be drawn out, there's going to be a bunch of hoops to jump through and at the end of it I'm going to receive nothing and I'm just going to be ticked off right? That's what they expect is going to happen. But they're trying it, you know, like let's just give it a shot and see what happens, right? And the only reason I bring that up is because every extra step, every extra layer in that process whether it's even just a back and forth between you, between them and a customer service representative, and a question gets asked whatever those extra steps are and however much extra time is involved in the process, all that is is a reinforcement to them that they're going to experience the exact same thing they've always experienced, which means there's always a point at which they're going to bail. The further along in that process they get in, the longer that it takes, the more likely they just bail on the process. They're mad, they leave a negative review. So even if you would have approved the claim, you will have a lot of people bail on the process before they ever get to that point. So the more you can shorten that time frame, the more likely number one they complete it. So you're going to get the five star review almost guaranteed if you do it right. You know. But also, they're not going. You know they're not going to bail. So now you get their information right. If they haven't registered yet, now you get the chance to collect the information. So I just wanted to touch on that. But going back to the question of what products work, what products? Don't you know how should you do it? I would say a few things. There's a lot of reasons why people don't actual, they don't actually take advantage of the warranty, and that works to your favor, like, in a sense, you almost kind of need that to be true. Now, of course, any of us who has any ethics in their bones at all, right, you know, like you don't want to offer something and then not, you know, not provide on it. Right, like you don't want to do that. However, there is the practicality of the dollars, right, like, if you actually give a 10-year warranty and it costs X amount of dollars and everybody takes advantage of it, you're probably not going to be able to afford it. Like, it just can't happen. But the reasons, the number of reasons why people don't, is one. If they like you, then oftentimes, like, we have a lot of customers who will be like, hey, you know what, I've already gotten two replacements for you guys. I couldn't bring myself to ask for another one. I just went and bought it again. You know like, you guys have been so great. The process has been amazing. I've already got my money back out of it. You know like, I just went and bought another one. Right. A lot of customers do that. You'd be surprised. You also have, of course, a lot of customers who don't believe that you're going to fulfill on it, so they don't file a claim because they don't think they're going to get it, and you know there's nothing you could do about that. You have a lot of people who just don't care, right, like I spent 50 bucks on a pool rake, but you know I've got the money. I don't want to take the time. I'm not sure if they're going to fulfill on it, so I'm just not going to bother, you know. So they don't. You know you don't have to fulfill on those. But then you also have situations like and this is a key piece where it's just the ideal product for this type of a thing, where you've got this really extreme warranty. So let's take this is probably the best example, but there's others that, for different reasons, accomplish the same goal. Let's take fitness products right. If you sell elastic bands for workouts, you have a lot of the customers who buy from you are going to be customers who basically decided, like maybe it was a New Year's resolution or a birthday resolution or whatever. I'm going to get in shape and I'm going to start working out every other day and I'm going to do it forever. But I need tools, I need equipment, right? So I buy your elastic bands and in my mind I think I'm going to use these every other day for the next 20 years, right? And if you tell me that I have a 10 year warranty on those elastic bands, in my mind I can calculate what the value of that is, because I'm going to use them every other day for the next 10 years. Like there's a lot of value in that, right? So I'm willing to pay considerably more for your elastic bands than everybody else, assuming there's credibility. You've got a good review profile. You know all of that. Now, what happens with most of those customers is, two weeks later, where are the elastic bands? They're in the closet, yeah. They never come out again, right? They end up in a garage sale someplace, right? So you will have it if you are selling a product where massive numbers of your customers are not going to use the product to the end of its useful life. Like the average, like our products last two to three years. Normally Some will last, you know. For some customers they'll get five, six, seven years, you know, but our average lifespan is probably about three seasons, right? If you're selling a product that lasts three seasons, essentially, but you know that most of your customers are only going to use it for a year or maybe two years before they stop using it for whatever reason, then that's a perfect product. To offer a three or a five-year warranty, right? Most of the customers won't ever take advantage of that because they're not going to use it long enough. Let's say you sell a product that's specific to a vehicle, right? Like WeatherTech sells those mats for vehicles, right? How long do you keep a vehicle, depending on the person?

Speaker 1: 39:43

three years, five years, before you, I was going to say most people is probably, like you know, four to six years. I think I'm one of the weirdos that keeps their vehicle for like 10 to 15, but Exactly.

Speaker 2: 39:52

And so WeatherTech can offer an unlimited you know, lifetime warranty, because the vast majority of customers the car gets, you know, sold to somebody else and now you don't have to fill in the warranty anymore, right? So if you sell a product like that, then you have a premium opportunity to offer an extreme warranty that you know you're only going to have to fulfill for a certain percentage of your customers and you can treat them like royalty. So that small percentage of your customers that does take advantage of those claims. They're going to leave you five star reviews all day long. They're going to review on social media. They're going to be posting everywhere. You're going to get referrals from them like it's gold. That marketing is gold. You're not. You couldn't buy that kind of marketing anywhere for that price. So let's. So those of you you know that's the ideal kind of a product. I would also say one of the things of that there's a lot of products that let's take. So that's like durable goods. Right, a warranty generally is going to be on a durable goods kind of a product. So think through your product. Does that make sense? You know, how long of a warranty could I offer? What's the average lifespan? What's the length of time, somebody might actually use my product for right, but then you have on the flip side, you have non-durable goods. A warranty doesn't really make sense, like I mean, you could do it, but in people's mind, you know, the idea of a warranty for a supplement doesn't make any sense. But a guarantee for a supplement makes perfect sense, right, like, for whatever reason, those two words just are associated differently. So my recommendation is some products that maybe aren't durable goods, maybe you can't offer a warranty, but you can offer an extended guarantee, right? Amazon gives what, what is it? I think it's 60 days for a return, for a refund, right? So offer an extended guarantee. You're not, it's not a warranty, it's we will give you your money back for up to six months. Just register your guarantee. Right? It's the same thing, you know, like there's no difference, but it just the way people think about it is a little different. So if you're offering a product that's not really a durable goods kind of a product, think about an extended guarantee versus a warranty and you can accomplish exactly the same goal.

Speaker 1: 42:00

Yeah, what is your take then? I think the last thing before we need to wrap up here is on the cost involved in the product. So, like, if we're looking at a warranty whether it's a warranty or a guarantee and if you're looking for people to register, if I bought a 10 to $20 product, I feel like it's probably not worth the effort for me to register that warranty, whereas if I bought a $500 or $1,000 product, you know you better. Believe that I'm going to be finding your company website. I'm going to be contacting you if I have an issue with that product.

Speaker 2: 42:33

Right for sure, and I would say that you know, one important thing is that. Well, I'll give you an example. So, for us, within our category, let's take, let's take pool nets that we sell. You can buy inexpensive pool nets for 12 bucks, 15 bucks, right, you can buy them all day long. They're everywhere, at least on Amazon, anyways. A bunch of Chinese sellers are selling them and they're super cheap. They don't last that long, but you can buy them, you know as many times you want, right? So this is a product that is exactly the kind of product that you're talking about, right? Like, nobody is going to. Nobody is going to bother to go register a warranty if they bought a $12 or $15 product. However, I am selling a product in a category where there are a whole bunch of $15 products available and I'm selling it 50 bucks because of my warranty, like, literally. Like, yeah, it's a more durable product, yeah, it's got some features they don't have. You know it's better for sure, you know, there's no question. But primarily, I'm able to sell at that price because of my warranty, because of the review profile that we have and because of the marketing that we're doing surrounding those things. Right, we're just doing it better than everybody else. So I would say don't assume, because you sell in a category of $15 products, that you can't offer an extended guarantee or a warranty because the pricing isn't enough, right? Like nobody's going to register that. Well, that's true if you decide to sell the product for 15 bucks, but if you're going to offer a significantly extended guarantee or warranty, you shouldn't be selling for $15. Because, number one, you really should be charging more because you're offering more, like there's more value there, so you should charge more. But number two, like you're, by charging more, you encourage that person to be more likely to actually register for the guarantee or the warranty, which is ultimately what you're trying to do in the first place. Right, you're trying to build this list on the back end, like that's a primary piece of the whole process. So charging a higher price point is going to get you a higher percentage of actual registrations, which is what you want.

Speaker 1: 44:47

Okay, well, I think that's a good place to kind of wrap for today. I think we've covered a lot of ground and warranty. For anybody that's listening, mike, you shared a ton of valuable things on, first of all, what that process looks like for registering a warranty, for claiming on that warranty, and then you know how you can leverage a warranty or guarantee in order to really set your brand apart. So I think for anybody listening, you really should be thinking about this If you're not, or using in your brand, either how you can use it more effectively or start using this process.