Metrics to Measure Your Product Protection Plan Success
August 18, 2020
Tools & Tech
Guest post by Madeleine Buras, Director of Marketing at Clyde
The future of retail is changing. Despite everything else that’s going on in the world, there are still opportunities for growth, and the retailers who are continuously updating, expanding, and improving their offerings are the ones who will make the most out of this environment.
Doing so doesn’t have to be expensive. There are plenty of low-cost, high-return ways to connect better with customers and increase revenue.
Clyde, a platform that offers a suite of options for managed, customizable product protection programs, is one of those ways.
Product protection programs are win-wins: they make customers happier by improving peace of mind, trust, and quality of experience, and they also work for retailers by increasing average order value, driving incremental revenue, and improving conversions.
But as Yaguara knows better than anyone, e-commerce brands need to be able to make fast, data-driven decisions as they actively manage their growth. That means knowing the metrics that matter and what you’re looking for as you bring on a new revenue stream.
These are a few key metrics to keep in mind (and to populate your Yaguara dashboard with!) when starting a new product protection program.
This key performance indicator measures what percentage of orders were purchased with an extended warranty / product protection contract.
Depending on your industry, this number will vary, but an average e-commerce attach rate is 4% (and that number is rising; as extended warranties become more user-friendly and transparent, more customers are investing in them).
Clyde retailers usually see rates in the double-digits, which we attribute to our easy-to-navigate customer dashboards, fully integrated purchase process, and customized calls to action.
A product protection plan is a product in and of itself, and just like any product, you’ll want to know how much of it you’re selling, who’s buying it, and when they’re buying it.
Metrics around sales should show you trends around segments of products or consumers with meaningful opportunities to focus future marketing around. Long-term, this data can help you set automated pricing rules and let your program run itself. (Clyde’s platform offers that option!)
This metric is one you’re already very familiar with.
As a retailer, you need to know what you’re bringing in without having to wait for a report. That’s why Clyde’s merchant dashboards show you how product protection plan revenue is growing in real time and allow you to break down that number into detailed information on timing and place of sale.
More important than a top-line revenue number is knowing how much of that revenue you get to keep. Profits from product protection plans will depend on 1) the cost of the contract to your customers; 2) the service fees changed by the provider; and 3) what the rest of the market is doing.
To keep your profit margin as wide as possible, we suggest keeping your contract costs low and in line with competitors’ and choosing providers who offer great service at great prices (hello—that’s us!).
Claims response time
This is the only metric on our must-have list that is focused on the customer experience, and that’s because it’s the absolute best measure of how that’s going.
Product protection only works if your customers get the help they need when they need it, and this KPI will tell you if that’s happening.
Even as another provider manages your customers’ claims, that process will reflect on you, so you’ll want to partner with a best-in-class platform (hi, that’s still us!).
Don’t get distracted by...
Measuring claims approval rate.
This number measures how many claims were approved versus submitted, but it doesn’t tell the whole story, since it will naturally leave out any claims that ended up being approved but were moved out of your providers’ queue because they were covered by a limited warranty. This doesn’t need to make your dashboard.
The right product protection platform is one that improves both your customer experience and your profit margin.
There are plenty of numbers and data to get lost in, but any metrics worth measuring will fall under one of those two categories, and the five we recommend above are a great place to start.
Clyde is a technology company transforming how retailers offer product protection and how customers take ownership of the products they love.Clyde’s platform empowers retailers -- from startup to enterprise -- to offer product protection plans to customers. By offering protection with Clyde, retailers can increase revenue, reduce program maintenance costs, and drive customer loyalty.
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