Reducing Product Failure Rates: How Warranty Data is Your Secret Weapon

Reducing Product Failure: How Warranty Data is Your Secret Weapon

Streamline Your Root-Cause Analysis

First and foremost, warranty data can greatly enhance your ability to undertake root-cause analysis. While some vertical markets, like sunglasses or jewelry, are not prone to high failure rates, others, electronics, for example, are more likely to deal with warranty claims. Analyzing the data can be an essential endeavor for retailers facing a significant number of warranty returns

Regardless of how often it occurs, companies will always benefit from performing some type of root-cause analysis when a product fails. In some cases, the problem could be due to multiple factors that make an effort to understand it more complicated. 

As we’ll detail shortly, warranty claims can result from flaws in the packing and shipping standards used, a manufacturing defect or a misalignment between customer expectations and the item’s true capabilities. However, without a way to identify the issue, or issues, you risk running into it repeatedly. And that’s an extremely costly cycle to endure.  

Fortunately, collecting the relevant warranty data and implementing the ability to generate reports quickly allows retailers to spot troubling trends quickly and take steps to correct them. 

Streamline the Root-Cause Analysis of Your Warranty Claims Data
Collecting the relevant warranty data and implementing the ability to generate reports quickly allows retailers to spot troubling trends quickly and take steps to correct them.

Most of the time, the primary source of this valuable data will be your customers’ warranty claims. Since it is a detailed record of the specific deficiency experienced by a shopper after purchasing the product, you can use insights from this data to investigate the circumstances that led to the failure. 

While some retailers attempt to accomplish this type of analysis by compiling this data manually into a spreadsheet or database, it is rarely effective. Pulling together warranty return information from multiple systems is time-consuming and susceptible to errors. Without a tool designed to automate and leverage warranty data for optimization, it’s difficult to zero in on the parts, materials or procedures that are most likely at fault. 

An automated warranty RMA process captures the complete picture, from the assembly line to fulfillment, in one place. It empowers your business and product team to identify patterns among your warranty claims so you can spend less time isolating the culprit and move on to implementing a solution more quickly.

Optimize Your Quality Control Process

Optimize your quality control process
Use your warranty disposition data to flag and quickly resolve problems.

Using warranty disposition data analysis to flag a problem and fix it quickly can be the simplest way for ecommerce companies to optimize their quality control process and reduce the number of defective products reaching customers. Otherwise, they may not realize the severity of a problem until public complaints and negative customer reviews reach a damaging threshold online. 

Over time, disposition data can also highlight any weaknesses in your broader quality control operations. Similarities in the failures of different products could point to the need for improvements in specific areas. You could discover that your company needs to update how it develops packaging standards or adjust the tests used to determine a product’s resilience before launch

Finally, as you take steps to improve your quality controls, continued analysis of warranty data will allow you to set benchmarks to evaluate your progress. Knowing the previous rate at which product failure occurred will allow you to set specific goals for improvement. Then, if following new protocols decreases the rate of failures, you’ll know you’re on the right track.

Discover Problems with Manufacturers and Suppliers

Discover problems with manufacturers and suppliers
An advantage of reliable and accessible warranty returns data comes from its impact of retailers’ relationships with manufacturers and suppliers.

Yet another advantage of reliable and accessible warranty returns data comes from its impact on your relationship with manufacturers and suppliers. At some point, an ecommerce company will likely face a complication with a vendor. 

Enforcing a service-level agreement or correcting flaws in the supply chain for your products can be much easier with warranty returns data in hand. In the event of a dispute, you’ll be backed by accurate data that could lead to a favorable resolution more quickly. 

But it’s not only beneficial amid a conflict. Sharing the disposition data with them can be a good-faith attempt to eliminate problems for your business and their other clients. Ultimately, informing suppliers about issues with the goods they ship benefits both of you, and many of your partners will appreciate a proactive approach that improves everyone’s bottom line. 

There are also benefits from a comprehensive warranty returns program. If you work with more than one manufacturer or supplier. By capturing warranty data automatically, you can uncover which partners are most reliable. Then, by shifting more of your production or procurement to the most dependable vendors, you can dramatically reduce warranty claims and realize substantial cost savings. 

Capitalize on Customer Loyalty

Customers want to have confidence in their purchases. A top-notch warranty returns program is a fantastic way to showcase your commitment to customer satisfaction and willingness to stand behind your products. It can also strengthen your company’s future by opening a dialogue with customers that minimizes warranty returns over time. 

The more information you can collect from a customer about how and why a product failed, the simpler it will be to prevent a similar problem from frustrating another shopper. Warranty data that comes directly from your current customers can help you achieve a peak level of service and set you apart from other retailers. 

While your business can reap the reward of fewer returns by collecting and analyzing warranty returns data, it’s not the only advantage. Taking a genuine interest in solving a problem for an unhappy customer will pay dividends in other areas as well. 

Demonstrating such a visible level of support can boost loyalty and lead to a jump in average order value and Customer Lifetime Value (CLV). When it comes to customers, a strategic emphasis on warranty data can turn a product failure into the first step toward developing your most lucrative shoppers.

Plan Your Path to Better Products with ReturnLogic

By 2027, the extended warranty market projects to eclipse $170 billion. Yet, our research shows that less than 1% of the retailers on Shopify have automated their warranty returns. In most cases, it’s because they don’t know how to begin building a system that aligns with their needs. 

At ReturnLogic, we’ve processed more than 500,000 warranty claims on $50 million worth of goods. We know it’s not a part of your business you can afford to ignore. 

Schedule a demo today and let our experience with automated warranty returns shed some much-needed light on the key to reducing your product failure rates. 

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