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Warranty scheme specialists switch focus from price to customer service

Warranty CYS feature image

By Richard Yarrow

Positive noises have been coming from the warranty sector for some time now. But which suppliers are benefitting the most, and why?

Tim Heavisides, CEO of Car Care Plan Group, said his business had several new partners.

“The key to success is our ability to listen to what dealers want, and to support them in ways that help them deliver their objectives. Each partnership is unique and it’s important we add value where it’s most needed,” he said.

Heavisides said that could be underwriting or sales process expertise, pricing stability, market knowledge or insight, and it was different for every customer.

 

Tim Heavisides Car Care Plan“A product has value when a customer needs to make a claim and wants a quick, transparent and no-quibble process from the dealer. Service quality is remembered long after price is forgotten” Tim Heavisides, Car Care Plan

He believes product competitiveness is also increasingly important: “In the warranty market, a product has value when a customer needs to make a claim and wants a quick, transparent and no-quibble process from the dealer. Service quality is remembered long after price is forgotten.”

David Parrondo, deputy managing director of Mapfre Warranty, said the company had secured a number of new partners in the dealer and manufacturer sectors.

“We’ve focused heavily on warranty this year, including launching our new mechanical breakdown insurance product, which has gained a lot of interest. We’ve recently recruited Nick Franklin from The Warranty Group to head up our partnership and distribution team. One of Nick’s areas of expertise is warranty, which further underlines our commitment to growing our business further.”

The approach of his team is that selling an extended warranty should have much wider customer retention benefits, as well as creating opportunities for increasing the number of customer touchpoints.

Parrondo said the winning formula was more than just product and price: “I think our approach of taking the time to understand a potential partner’s business, stock and customer profile, and then designing the right warranty programme for them, is crucial. We don’t do one-size-fits-all.”

Warrantywise has doubled the size of its dealer division in the past year, with each region now having two account managers to handle the new business. New customers include Thurlow Nunn Luton (Vauxhall), HA Fox (Jaguar), Bentley Cardiff, Lamborghini Leicester, Progress Suzuki and Porsche Centre Solihull.

“We feel this growth is due to both the increase in TV advertising and direct marketing, resulting in a stronger brand, and getting our literature in front of the decision-makers at dealerships across the country,” said Clare Speight, dealer sales manager.

The firm has also revised its terms and conditions to improve the level of cover, reflecting the feedback it has received from dealers. This has led to an increase in retained business and expansion of the renewals team.

“We think we won new business because we pride ourselves on the level of cover we offer and the quality of our customer service. It’s paramount to us that our dealers and their customers experience the best service possible by being honest and transparent from the start.”

Service enhancements this year include a unique training programme for dealerships, to train their staff in the warranty and the necessary skills needed to upsell to all customers at the point of sale.

WMS Group has signed up Charters Group, John Pease Group, Bellingers Group, Progress Group, Rowcliffe Group and New Broad Street among others, leading to growth of 15% over the past year. A new corporate development manager has recently been recruited to focus on what Eric Stone, business development director, called “a growing market for us”.

“Our Safe and Sound product had been adopted by many new franchised dealerships and groups as a perfect solution for their ‘too good to trade’ stock. Innovation is also key and we have developed a new app called My Motor Manager, to provide an umbilical link between the dealer and the customer as a CRM platform.”

 

Serkan Obuz, Warranty Group“One thing that’s working especially well for us is an aspect of our relationship with the RAC brand” Serkan Obuz, The Warranty Group

Increasing customer satisfaction and dealer profitability have been vital for growth of The Warranty Group. That’s the view of Serkan Obuz, head of corporate sales and training, who said a number of AM100 and car supermarket deals had been signed in the past 12 months.

“One thing that’s working especially well for us is an aspect of our relationship with the RAC brand. Where dealers sell RAC warranties, the customer can also be given free RAC breakdown recovery. Because something like 80% of RAC call-outs are resolved by patrols, this can substantially reduce the warranty claims made against the dealer’s policies.”

The RAC Approved Dealer network has doubled in size in the past year, which is a project developed in partnership with the breakdown organisation and designed to help dealers offer a complete used car proposition, rather than just a warranty.

“The pinnacle of this is our RAC BuySure programme, which is not just a warranty but breakdown cover, provenance check, vehicle preparation standard and more,” said Obuz.

Another supplier, AutoProtect, said it had made progress in helping dealers use warranties as both a marketing and sales tool, where opportunities outside of manufacturer schemes had been identified.

“Dealers and consumers both see real value in extended warranties,” said Nick Wake, director. “In part, this is about treating customers fairly, but it also reflects the increase of savvy customers who want to see a quality warranty.”

As well as showroom merchandising support, dealers can benefit from AutoProtect’s investment in video – which can be dealer-branded – to enable customers to discover the value of a warranty for themselves.

Wake acknowledged that it is a changing market: “Consumers are more confident, knowledgeable and demanding, competition has increased and so has regulation. AutoProtect has moved quickly to help dealers to develop their extended warranty approach, with a range of options that can be tailored at dealer level.”

Warranty provider MB&G confirmed it had increased its overall warranty business by 15% in the past year, but declined to provide further details or comment. Allianz Global Assistance declined to contribute to this article, saying it focused on manufacturer relationships. AM has previously reported that it provides warranty products for franchised networks, including Vauxhall’s Network Q approved used car programme.

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