How Brands and Retailers Can Improve Long-Term Customer Loyalty and Drive Revenue by Helping Homeowners Effectively Manage their Products
Though ultimately rewarding, home ownership is a daunting and stressful endeavor. NerdWallet’s Home Buyer Report found that nearly two-thirds of homeowners (65%) have experienced anxiety related to their home, with 75% of those people attributing their stress to unexpected home repair costs. Census Board statistics found that, on average, every home requires annual maintenance costs around 1-4% of the home’s value – and that number is likely to rise given the widespread adoption of tech-enabled home products.
Home ownership in 2020 is more akin to managing a spaceship than the traditional house with a red door and white picket fence. Modern households have evolved into complex technological ecosystems capable of regulating the environment, automating basic tasks, and otherwise improving homeowners’ living experience. Home products, such as appliances, electronics, computing devices, power tools and other equipment, are an integral facet of homeownership but also introduce the potential for disruptive and costly breakdowns.
And therein lies the problem. Homeowners feel as though manufacturers and retailers don’t support them after they’ve made their purchase. People are forced to either fix highly sophisticated products with little information available from the product manufacturer or rely on extended warranties when home products break down. Centriq commissioned research to determine homeowners’ attitudes and behaviors around both of these options. Brands and retailers have deployed extensive troubleshooting and warranty programs to help homeowners manage their home products, and this report benchmarks the efficacy of those programs.
To understand how effectively consumers managed their home product warranties, responses from more than 1,000 North American homeowners between the ages of 30 – 65 were analyzed. The report covers four key areas: warranty programs, extended product support, home maintenance DIY, and product recalls.
The Consumer Product Safety Commission (CPSC) has recalled 110 million household products and 150 million children’s products in the past five years, ranging from chainsaws and smoke detectors to teddy bears and strollers. Despite this vast array of dangerous products on the market, the survey found that only 40% of surveyed homeowners have ever sent a product back to the manufacturer based on a product recall.
Consumers ignore product recalls at their own peril. Deaths, injuries and property damage from recalled products cost U.S. consumers more than $700 billion annually. In fact, Ikea just settled a case that involved one of their recalled dressers falling on a child for $46 million.
At its core, the product recall system is broken. The CPSC has made finding product recall information incredibly difficult and almost impossible for people to take timely action. Product recalls don’t receive wide distribution, the information is buried on a clunky website, and the agency’s posts on major social media platforms have even gone down. Both the CPSC and manufacturers posted recalls on Facebook at lower rates in 2018 compared to 2017. This creates a dangerous scenario for consumers and their families as their household likely contains a product that has been recalled that they are unaware of.
Warranty programs have taken a hit in the court of public opinion. The perception is that extended warranties have created a $40 billion industry that many believe is overly complex or doesn’t deliver enough value for the investment. However, the data shows that consumers also share in some of the blame due to their lack of organization and follow-through.
The survey found 70% of homeowners don’t believe retailers or manufacturers care about their experience with their product after they buy it. In addition, 58% of survey respondents feel that home product companies don’t offer adequate support after the purchase has been made. Rather than view this as a negative, the data may point to these trends as opportunities for brands and retailers.
The survey found that more than half (52%) of respondents own more than 20 electronic home products. Despite the volume of electronic devices, 69% of respondents said they try to fix or troubleshoot home products themselves when they break. 74% conduct of respondents perform online research to help them identify product support materials while only 14% use the product guide or manual to help them fix, operate, or troubleshoot issues. Search engine results are rife with outdated and outright false information which isn’t helpful when the oven is down and friends are coming over for dinner. If given the choice, 55% of homeowners want information directly from manufacturers when they need to solve a product issue.
Brands and retailers can differentiate themselves by demonstrating that they care about homeowners’ experience with their products once they’ve left the store. In an age when Big Box retailers and home product manufacturers are facing more competition than ever from Amazon and other upstarts, offering improved post-purchase product support is a way to differentiate themselves while dramatically improving customer loyalty, repeat sales, and positive online reviews. A large percentage of people’s time and resources go into their homes: whether it be paying the mortgage, upgrading the décor, or maintaining the property. With so much on the line, it’s no wonder homeowners crave assurance that brands and retailers are committed to providing long-term value over home products’ lifecycle.
For more information on how to leverage the Centriq platform to deliver important product news – including troubleshooting tips, product recall alerts, and warranty information – directly to consumers, please visit www.mycentriq.com.
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