Sean Stapleton To Speak At Extended Warranty & Service Contract Innovations Conference

By: Jeff Hatch

September 01, 2017

The eighth annual Extended Warranty & Service Contract Innovations Conference opens September 13 at the Renaissance Hotel in Nashville. Several hundred professionals from the extended warranty and service contract industry are headed to Nashville to talk about how changes in technology and regulations will impact their businesses in the years ahead.
 
Successful Partnerships 
 
On Thursday morning, Sean Stapleton, the President and CEO of AMT Warranty, will join with Kenneth J. Mac, the Director of Chevrolet-Buick-GMC-Cadillac Protection at General Motors Co., to deliver a presentation on "Successful Partnerships in the OEM F&I Space."
 
GM spun off its vehicle service contract, insurance, and finance business years ago into what is now known as Ally Financial Inc., but which used to be known as the General Motors Acceptance Corp. (GMAC). Then, of course, the great recession hit, and both GM and GMAC went through bankruptcy reorganizations. Afterwards, GM decided to re-enter the VSC business under its own name, and Mac's Customer Care & Aftersales unit decided to do it in partnership with an outside insurance underwriter.
 
Stapleton said AMT won the bidding after an extensive vetting process. "The relationship with GM has been truly phenomenal," he said. "We've been in business for many years now." He said they started working together in 2014, after AMT Warranty won the bid in late 2013.
 
"The program has grown tremendously since then," he said. "And it continues to grow. So I'm really proud of what AMT Warranty and GM have put together." Their joint presentation in Nashville will explain how the relationship works, how they strive for continual improvement and innovation together, and what advice they can offer to others looking to create similar partnerships for their service contract programs.
 
"It's a unique partnership in so many ways," Stapleton said. "This isn't a vendor relationship with them. We're not order-takers. It's very collaborative. We meet every Monday. We have our quarterly calls. We have update calls. We're living and breathing and looking at the same things."
 
Fear-Free Communications
 
Stapleton said he and Mac will outline some of the best practices that seem to work for them in their partnership, while acknowledging that things may be different for other partnerships. First, he said, the partners employ what he called "fear-free communications" between the two teams.
 
"We empower our teams to build these relationships amongst themselves," he said. "They fight for each other. It's almost like one organization. It doesn't feel like finger-pointing. It feels like we win or lose together."
 
The teams also are encouraged to ask a lot of questions, particularly around reasons why they're doing something a particular way. "Some of those things are hard to discuss, whether it's personal or professional, but we have that openness. And it's been really beneficial."
 
Stapleton said the partners started out in 2014 with just a handful of auto dealers selling their vehicle service contracts (most were still loyal to GMAC/Ally). Ally still had rights to the GM name. So the partners decided to sell Buick, Cadillac, and Chevrolet-branded VSCs, and gradually some of those dealers decided to come aboard.
 
"It was a huge challenge," Stapleton said. "But it was also a pretty exciting time -- to know that we were doing things differently, to do things that were intended to drive retention and loyalty. That's one of the biggest differentiators I think that the program has."
 
They also offered disappearing deductibles, and introduced a "white glove" level of service within the dealerships to boost loyalty and turn what could be a real negative (getting a defect repaired) into a real positive (cementing the relationship with a phenomenal experience).
 
"Issues create long-term relationships with these customers," he said. "Their alternator may have blown. And that stinks. But they had a great experience. They were put into a loaner car. And there's a disappearing deductible, so there's no money out of pocket. It makes it a whole lot easier, and it builds that level of trust. Challenges can actually result in longer-term relationships with customers."
 
GM could have done it alone, essentially remanufacturing GMAC all over again. But instead it decided to work with AMT. Stapleton said this allows the partners to share data about both the products and the risks, with each bringing their expertise to the table.
 
"We support other large OEM programs," he said. "So we know what's been successful, and we know what's been a failure." And it helps the partners to properly price the service contracts sold for not only for new GM vehicles, but also the used vehicles that dealers have on their lots. "We have a depth and breadth of understanding of this space that's hard to compete with, because this is our core."
 
Visit warrantyweek.com to read this article in its entirety and for more industry insight. 
 
And be sure to follow Warrantech on Facebook, Twitter and LinkedIn so you can keep up to date on company initiatives as they happen. 

Filed Under: AMT, conference, contract, extended, innovations, Sean, service, Stapleton, Warranty

WCM Conference Keynotes

By: Jeff Hatch

March 09, 2015

Sean Stapleton, president and CEO of Warrantech/AMT Warranty will be presenting at the 2015 Warranty Chain Management Conference on March 11 in Miami. The following is an excerpt from Warranty Week in anticipation of the event. 

The technology is changing. The need for repairs is changing. Even the concept of ownership is changing. And the way people shop is changing. Two industry experts describe how they see these changes impacting warranty and service contracts.

At this year's Warranty Chain Management Conference, attendees are immediately going to be challenged to face the changes that new technology is forcing upon our industry.

It's going to be a bit upsetting, especially to those who like the status quo. Rather than hearing about the latest best practices in the break/fix business, and how everything is slowly going to get incrementally better, attendees are going to be told how driverless vehicles will challenge the whole idea of automobile ownership, and how comparison shopping apps that seek out the lowest prices have made it tough to earn a living in retail.

A pair of warranty industry experts will deliver a one-two punch of keynote presentations at the WCM Conference on March 11 in Miami, about the impact of disruptive technologies upon warranty. We spoke with both of them this week about their presentations.

John Estrada opens the morning session with a talk about how driverless transportation will change warranty and service contracts, followed by AMT Warranty's Sean Stapleton talking about how warranty and service contracts can help save retail from its downward spiral, by making value and customer relationships as important as low prices.

WCM's Morning Schedule

In the WCM program, Stapleton's 45-minute presentation is called "Combating the Retail Pandemic," a title he said he came up with a few months ago when the Ebola scare reached the United States. They're by no means the same thing, but in economic terms, the current state of the retail environment provokes a comparable level of fear for many veteran merchants whose iconic organizations are facing possible extinction.

"I certainly wanted to grab everyone's attention, but more importantly I felt that the title set the stage for a discussion about a very serious and widespread situation for retailers and manufacturers," he said. "A pandemic is a disease that has a disastrous impact felt both locally and globally." And he said that many colleagues and friends in the retail industry are dealing with a profound change in both customers and the marketplace where a low price seems to be the main determining factor for product purchases. So either they lose the sale, or they get the sale but lose money anyway.

In other words, the sales slump that's hurting many of them comes not just in terms of revenue but also in terms of profitability. "Margin erosion has impacted retailers in ways never seen before," he said. Price will always be a factor when a product is purchased, he added. This is nothing new – the modern difference is the ease by which customers can obtain pricing comparisons and make purchases through multiple sources.

The Great Recession

Stapleton said some people blame the current retail challenges on the lingering effects of the Great Recession – the decline of household income, aging baby boomers, rising unemployment, or falling home values. Others say it's the lack of innovation, or the lack of exciting new "must-have" products.

"The reality is that there has been product innovation: smartphones, 4K and Ultra HD, wearables, advanced car tech, and highly functional tablets. You look at the growth the CEA expects for these segments, and it's tremendous. So the innovative products do exist."

Meanwhile, the economy may not be as strong as we would all like, but it's not as bad as some people make it out to be, he said. The U.S. Census Bureau pegs the January-to-January sales gain at 3.3%, which isn't great but also isn't dismal. Total retail sales for the November-to-January holiday period were up 3.8% from the same period a year ago. The U.S. unemployment rate is now down to 5.7% and the median price of existing home sales is up 6.2% since last year. So what is it?

Ironically, he said, in an era where retailers are perhaps more connected with their customers than ever before, thanks to social media and big data, those connections are more superficial than ever.

"The heart of what I'm going to discuss is that many retailers and manufacturers are just not achieving a high level of loyalty and commitment from their customers," he said. "Part of the problem is that we're living in the 'Age of Like.' We see this play out on Facebook every day, with users happily clicking the thumbs up icon for just about anything they see. However, that's where the customer commitment often ends. 'Like' should not be our collective goal. To be successful we need to aspire to win the love of our customers. The reality is that overall we aren't seeing the same level of affinity for brands that we used to enjoy."

For instance, Stapleton said, his father always bought Kenmore appliances. "He loved his Kenmore appliances because, in his mind, they earned his trust and loyalty year after year" he said. "He wouldn't dare shop for another brand. Sadly, we don't have that kind of an environment anymore."

"As warranty and service contract professionals, we have a unique opportunity to affect customer loyalty," he said. "We have the ability to turn a negative experience into a powerful trust building moment with customers. Customers recognize and accept that product breakdowns can happen to even the most reliable products. The customer's perception of the product issues are more often driven by our responses."

Stapleton further noted that one of the greatest challenges with service contract programs arises when a customer's claim isn't covered under the contract, whether as a result of an expired contract or other reasons. "In such situations, there is still an opportunity to turn a negative into a positive."

He suggested that there are plenty of instances when no coverage exists, but accommodation can still be made to assist the customer and provide them value. Accommodations may take the shape of providing a product replacement or repair outside the service contract. However, there are other solutions that are less frequently utilized that can have a major positive effect with minimal financial impact.

For instance, Stapleton noted that broken products not covered under a plan can be purchased back from customers based on the products core value. Additionally, discounts on replacement products can be provided or even gift cards with token values which can be applied to future purchases can be offered to customers. The actual cash value is less important than the act of going the extra mile for a customer.

Discount Repair Services

Stapleton proposed another low-cost marketing idea: leveraging a claims administrator's repair network by making it available to customers who have a non-covered product issue. Why not offer loyal customers discounts on repairs for their customer-pay jobs related to these types of product issues, or even for other products they own?

"Here's how I see it: Warranty and service contract programs are developed by operations groups. However, the marketing departments of the retailers or manufacturers are rarely involved in the development of these programs. And I think that creates a level of disconnect. I see service contracts and warranty programs as one of the most powerful loyalty solutions out there. It actually is a game changer," he said.

Manufacturers and retailers might not know the name and address of every single customer, but they certainly have that data for those who needed warranty work or who made claims under their service contracts. With this information, a critical segment of their customer base can be identified and hopefully saved.

Stapleton suggests that marketing departments utilize claims data to establish a loyalty campaign tailored toward these affected customers. "The fact is that some of these customers may have been your best customers in the past. The data currently residing in a company's system can provide them the ability to know how and when a customer's perception of them soured. Moreover, that data combined with a strong retention plan can help return the customer to their former loyalist status. Further, this type of strategy can prevent the impacted customers from becoming one of your net detractors." He noted that with the power of social media, disenfranchised have the ability to shape an enormous population of existing and potential customers' views of your product or company.

Ultimately, he said, when structured and executed appropriately, warranty programs build trust and loyalty. Stapleton said it is inexcusable to allow one claim to impact a lifetime relationship with an existing customer. "Instead of spending the majority of available marketing resources to bring in new customers, let's keep the ones you have. Let's prevent them from getting out into social media and destroying your reputation based on one poor claim event."

The first step, Stapleton suggests, is to change the whole image of warranty within the retail industry. "If you want to change the perception of warranties and service contracts for customers, you have to change it internally first. We can't allow warranties and service contracts claims to be viewed as an unfortunate expense. We need to view them as a marketing opportunity that can potentially save a customer thereby leading to countless future purchases and maybe even a means to evoke positive customer emotions that go beyond 'like.'"

To read this article in its entirety, go to Warranty Week. And be sure to visit Warranty Conference for more information regarding the WCM Conference.

Filed Under: claims, Conference, customers, economy, retail, Sean, service, Stapleton, Warranty