In today’s technology landscape, every new initiative requires some testing and tweaking in order to achieve acceptable levels of performance. Without the ability to test, the only alternative is to accept the status quo and make guesses at how to improve performance, which is pretty difficult unless you have a crystal ball. Testing helps businesses understand which decisions work and which ones need improvement.
All that might seem obvious, but for the last 100 years testing hasn’t been possible with extended warranties or product protection. Most extended warranty providers send spreadsheets and static rates to retailers. Those providers then ask the retailer to build technology to manage their program or use manual processes to conduct business (hey there, Excel!). This causes a technical dependance that forces internal IT departments or operations teams to take on the burden of making changes and managing process. Depending on the organization, either of these tasks take weeks or months to complete. That size and effort of work usually means that tests get deprioritized to simply get the new initiative up and running. Because of this, most companies who accomplish the massive feat of building an extended warranty program end up running the same program for years on end with little to no opportunity for change or improvement.
Clyde gives companies big and small the ability not only to offer extended warranties but also to optimize them. By building easy to install software, every company can test calls-to-actions (CTAs) and pricing structures to ensure their warranty program is performing as well as possible.
A/B Testing for Customer Experience
The simplest test that a retailer can run is an A/B test. A/B tests are used to compare the effect that two different variables have on achieving a distinct goal. As mentioned above, Clyde gives businesses the ability to A/B test without IT intervention.
To learn more about best practices for A/B tests, you might find this HBR article helpful.
Call to Action
Clyde offers several CTAs during the customer’s purchasing journey as well as a post-purchase customer experience, ensuring customers receive a consistent, high level of service throughout their shopping experience. There are over a dozen different variables that can be customized in these configurations, all of which can be tested to optimize results.
We have several types of CTAs that each retailer can customize to fit their store:
Cost to Customer
While the value of an extended warranty for a customer is peace of mind and protecting their new product(s), retailers that offer extended warranties can add an additional benefit to their bottom line: profit. Clyde presents retailers with a fixed cost for each type of extended warranty they can sell. Just like any other inventory, retailers can then markup the extended warranties to earn a profit on each transaction, as well as increasing their average order value. Clyde offers retailers the ability to change the markup of products whenever they would like. While we wouldn’t suggest doing this frequently, testing different pricing can provide better results. As part of the on-boarding process with Clyde, you’ll receive guided sessions with one of our very own data scientists to help identify actionable next steps for your business.
A Real Life Example of A/B Testing
We have seen customers use the flexibility of Clyde’s multiple CTAs to test and adjust how their extended warranty is offered. Recently a DTC retailer specializing in headphones and personal audio equipment implemented Clyde choosing only to activate the cart and product display page CTAs. After launch, they were initially seeing a 5.6% contract attachment rate (the number of orders on their site with an extended warranty attached to the purchase where the product was eligible). After their guided session with our data scientist, this company saw their attachment rate jump to nearly 50% - well above the industry 2-4% average! At Clyde, we have a portfolio of similar examples where retailers are able to make changes to their settings after a few months of data to improve performance.
Make sure to give yourself the ability to try new approaches to your work - extended warranties and product protection for your customers are no exception. You shouldn’t have to wait for better results and neither should your customers. Do it yourself and save your more complicated, time-sensitive asks for internal IT - they might even send you a thank you note.