How merchants (and their customers) can win using the AppleCare+ model

March 5, 2021

Sponsored by Clyde

How merchants (and their customers) can win using the AppleCare+ model

We’re on a mission to understand product warranties: What are they? Who needs them? Can I fold one up into a small pocket and carry it around?

Warranties give everyday consumers peace of mind when buying the things we love—think of your favorite blender, coffee machine, electric toothbrush, humidifier, hair dryer, slow-cooker, or treadmill. 

(Aaand whatever else you needlessly purchased and bought online in 2020)

The case for extended warranties 

Warranties guarantee products will work as intended. That means when something goes wrong, the manufacturer is on the hook for a fix or a replacement. Extended warranties take product protection a step further.

For instance, Apple offers the crème de la crème of extended warranties. Here’s how it breaks down when you buy a new iPhone: 

  1. Limited warranty: An automatic one-year “manufacturer warranty” covers you against a faulty or defective device. 
  2. Extended warranty: For an additional cost, AppleCare+ covers beyond the one year warranty (including accidental damage).

In fact, getting AppleCare+ is so seamless that people often don’t realize it’s an extended warranty. The program also brings in $7B of revenue a year, which would make it a top 10 U.S. commercial line insurer.

Now imagine having AppleCare+ for all your stuff

The thing is, it’s way harder than it sounds.  

The uniqueness of AppleCare+ is that it is one of the only extended warranty programs where the merchant is also the licensed administrator* (*insurance-speak), meaning they review and approve all claims. 

Other popular extended warranty programs, such as BestBuy’s GeekSquad are backed by third parties — meaning that claims are reviewed and approved by an external provider.   

When done wrong, everyone’s unhappy 

Historically, third party extended warranties have gotten a bad rap for a few reasons—high fees and deductibles, confusing terms and conditions, and frequent claim denials. Here’s the data: 

The good news: Things are changing 

Merchants are taking a closer look at extended warranties for two reasons: 

  1. Product warranties benefit the customer experience, increasing brand loyalty and customer lifetime value by giving them added protection.
  2. Insurance purchases are often the highest-margin products that merchants sell and these purchases increase the conversion of the companies’ core products.

Where warranties are headed

Third party providers like Clyde have created a new way to launch, manage, and find success with your warranty program–just ask VAIO, Tuft & Needle, Barnes & Noble and Tempo

Merchants can now invest in platforms that offer:

  • Clear and concise terms and conditions.
  • Affordable and competitive premiums.
  • Transparency on the claims processes. 
  • Consistent resolutions for all customers.

The still-untapped market opportunity? Product and customer registration, which enables customers from all channels to register their products and purchase protection plans. 

Pop over to Clyde, a leading warranty provider with 170+ merchant partners, to learn about how they’re reinventing the ownership journey. 

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