A global benchmark survey analyzing electronics industry warranty performance

Unfortunately, many companies don’t put enough focus on effective warranty management or treat it as a competitive differentiator. For those who are unfamiliar, Warranties are a critical part of product upgrades and launches, particularly for electronics companies that constantly introduce new features, software or experiences. In effect, underestimating the operational impact of returns and repairs can have a profound effect on company reputation and bottom line.

According to the new IBM Institute for Business Value (IBV) study, Powering Warranty Reinvention: How Electronics Companies Leverage New Technologies to Improve Warranty Management,

• On average, warranty costs are close to 3 percent of revenue of those companies surveyed.
• Of that 3 percent, less than 1 percent is actually spent on direct repair or replacement of defective goods.
• For a one-billion-dollar company, that’s USD 20 million in processing and administration costs across the repair cycle.