Putting a Fresh Face on Warranties
Industry vet Mike Frosch looks to help retailers differentiateOctober 9, 2013 By Nancy Klosek
Mike Frosch, a 25-year warranty industry veteran, is now an entrepreneur looking to put a fresh face on the warranty business with his newly formed company, Personal Safeguards Group (PSG). He has seen plenty of opportunity in the market for a firm that focuses on supporting dealers and vendors in driving customer acquisition and retention through an approach that helps them develop differentiated factory warranty and extended warranty strategies.
On the retail side, customers need good reasons beyond mere protection to buy a warranty, Frosch said, especially with consumer electronics becoming less expensive with each product generation and warranties that consumers feel are not worth the price of protection.
“Here’s an example: for a $299 laptop, a three-year accidental damage warranty is $199. It’s very difficult to get someone to spend that kind of money,” he said.
“You have to think about what extra you can offer to a consumer, what benefit will be more closely aligned to what they’ll need.” That could include things like identity theft protection, or free virus removal for a computer.
The industry, he said, suffers from a “me-too” rut.
“If you think of the extended warranty business, you basically have a handful of very good providers, but a lot of them are doing the same things. You have customer who’ll switch from Provider A to B, and maybe they’ll get a better deal because they’ll save on their fee. But they’ll get basically the same results, and haven’t really changed anything because they’re all doing the same thing within the same structure.”
Frosch said he is passionate about customer care at the point of sale and well beyond. He is not a fan of the handoffs that happen through the history of a product’s lifespan, saying the warranty industry is too diffuse and segmented; integrated solutions are needed.
“The customer should not have a different experience depending upon how old the product is. If your customer care company is one you use as a retailer or a manufacturer from day one, why not just have them take care of the customer through the entire experience? I wanted to assemble anorganization that suggests,