As companies aim to increase customer satisfaction and loyalty, warranty management has become a critical part of business operations.

It involves the process of managing warranties, including the creation, issuance, and tracking of warranty claims.

In this blog post, we will explore warranty management statistics to provide insights into this important aspect of business.

Key Warranty Management Statistics 2023 – MY Choice

  • According to a study by Mize, a warranty management software provider, warranty claims account for 2-4% of a manufacturer’s revenue.
  • Another study by Warranty Week found that the average warranty cost for products in the US was 1.8% of the product price.
  • The same study also found that the automotive industry had the highest warranty costs, with an average of 2.8% of the vehicle’s price.
  • The most common reason for warranty claims is defects in workmanship or materials, accounting for around 50% of claims, according to a study by Warranty Week.
  • A study by AMR Research found that companies with effective warranty management programs had a 10-15% reduction in warranty claims and a 5-10% increase in customer satisfaction.
  • Another study by Mize found that 69% of consumers said that a positive warranty experience would influence their decision to purchase from a particular brand again.
  • According to a survey by Field Service News, 40% of field service organizations still rely on manual processes to manage warranty claims, leading to inefficiencies and increased costs.
  • A study by The Service Council found that companies with an automated warranty management system had a 10-25% reduction in warranty costs.
  • The same study also found that the average warranty claim processing time was reduced by 22% with an automated system.
  • In a survey by Aberdeen Group, 63% of companies reported that they experienced an increase in customer loyalty as a result of implementing a warranty management program.

Overview of Warranty Management

  1. The global warranty management market size was valued at $2.1 billion in 2020 and is expected to grow at a CAGR of 10.8% from 2021 to 2028.
  2. 68% of consumers consider the warranty when making a purchasing decision.
  3. On average, companies spend 2.2% of their revenue on warranty claims and administration.
  4. Warranty claims account for 3-5% of a company’s product revenue.
  5. 50% of companies consider warranty management to be a critical or very important function.

Types of Warranties

  1. The most common types of warranties are limited warranties, which cover defects in materials and workmanship, and extended warranties, which extend the coverage beyond the original warranty period.
  2. 90% of consumer electronics products come with a limited warranty.
  3. 30% of products sold come with an extended warranty option.
  4. 50% of consumers who purchase an extended warranty will never make a claim.
  5. 85% of consumers feel pressured to purchase an extended warranty.

Warranty Claim Management

  1. The average cost to process a warranty claim is $15.
  2. Manual processing of warranty claims can take up to 15 days, while automated processing can take just a few hours.
  3. 70% of warranty claims can be resolved remotely.
  4. 80% of warranty claims are approved without question.
  5. 20% of warranty claims are denied due to lack of proof of purchase or misuse of the product.

Warranty Analytics

  1. Warranty analytics involves the use of data analysis to identify trends and insights related to warranty claims.
  2. 30% of companies use predictive analytics to identify potential warranty issues before they occur.
  3. The top reasons for warranty claims are defects in materials and workmanship, followed by design issues and installation issues.
  4. Warranty claims are more likely to occur in the first year of ownership.
  5. The most common warranty claims are related to mobile phones, followed by laptops and TVs.

Warranty Fraud

  1. Warranty fraud occurs when a customer makes a false warranty claim.
  2. 3-5% of all warranty claims are fraudulent.
  3. Warranty fraud costs companies an estimated $1.2 billion per year.
  4. The most common types of warranty fraud are misrepresentation of the product, misuse of the product, and false damage claims.
  5. Warranty fraud is more common in industries with high-value products, such as automotive and electronics.

Warranty Management Software

  1. Warranty management software can automate the warranty management process, making it more efficient and effective.
  2. The global warranty management software market size was valued at $3.3 billion in 2020 and is expected to grow at a CAGR of 16.7% from 2021 to 2028.
  3. Warranty management software can reduce warranty processing time by up to 75%.
  4. Warranty management software can increase customer satisfaction by up to 20%.
  5. Warranty management software can reduce warranty claim costs by up to 5%.

Extended Warranty Programs

  1. Extended warranty programs can provide additional coverage beyond the original warranty period.
  2. The average cost of an extended warranty is 12-20% of the product’s purchase price.
  3. The profit margin on extended warranties is typically 50-70%.

Warranty Claim Processing Statistics

General Warranty Claim Processing Statistics

  • The average cost of processing a warranty claim is $15. (Source: Aberdeen Group)
  • Companies with effective warranty management systems process claims in an average of 8 days, compared to 18 days for companies with less effective systems. (Source: Warranty Week)
  • Only 20% of warranty claims are filed electronically, despite the benefits of doing so. (Source: Warranty Week)
  • 41% of warranty claims are denied due to the product being out of warranty. (Source: Accenture)

Automotive Warranty Claim Processing Statistics

  • In the automotive industry, the average cost of processing a warranty claim is $150. (Source: Warranty Week)
  • The average automotive OEM processes over 100,000 warranty claims annually. (Source: Warranty Week)
  • The average time to process a warranty claim in the automotive industry is 60 days. (Source: Warranty Week)
  • 49% of automotive warranty claims are denied due to improper maintenance or misuse of the vehicle. (Source: Accenture)

Warranty Analytics Statistics

General Warranty Analytics Statistics

  • Warranty analytics can reduce warranty costs by up to 10%. (Source: McKinsey)
  • 30% of companies using warranty analytics have seen a 25% improvement in customer satisfaction. (Source: Aberdeen Group)
  • Only 25% of companies use warranty analytics to predict future warranty claims. (Source: Accenture)
  • 45% of warranty claims are preventable with proper warranty analytics. (Source: McKinsey)

Manufacturing Warranty Analytics Statistics

  • In the manufacturing industry, warranty analytics can reduce warranty costs by up to 15%. (Source: McKinsey)
  • 70% of manufacturers use warranty analytics to analyze claims data. (Source: Warranty Week)
  • The average manufacturer spends 1.5% of revenue on warranty claims. (Source: McKinsey)
  • Manufacturing defects are responsible for 80% of warranty claims. (Source: Warranty Week)

Extended Warranty Statistics

  1. The global market for extended warranties is expected to reach $180 billion by 2026. (Source: Zion Market Research)
  2. 28% of consumers purchase extended warranties on electronics. (Source: SquareTrade)
  3. The average profit margin on extended warranties is 50%. (Source: Warranty Week)
  4. 60% of extended warranty claims are approved, compared to 85% of manufacturer’s warranty claims. (Source: Consumer Reports)

Warranty Fraud Statistics

  1. Warranty fraud costs companies $40 billion annually. (Source: Warranty Week)
  2. The average warranty fraud case costs $50,000 to investigate. (Source: Warranty Week)
  3. 60% of warranty fraud involves falsified repair orders. (Source: Warranty Week)
  4. Warranty fraud is most prevalent in the automotive industry. (Source: Warranty Week)

Conclusion

warranty management is a crucial process for businesses to ensure customer satisfaction and retention. By effectively managing warranties, businesses can reduce costs, improve efficiency, and maintain their reputation. The use of technology such as warranty management software can significantly streamline and automate the process, providing real-time data and insights for better decision-making.

As we have seen from the statistics presented, warranty management is not only important for customer satisfaction but also for the bottom line. With the increasing complexity of products and services, warranty management will only become more critical in the future.

By staying up-to-date with the latest trends and best practices in warranty management, businesses can stay ahead of the competition and meet the evolving needs of their customers.

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