Wednesday, October 8, 2008

Warranties in the CE World

By: Lee Distad

Yamaha made waves in the Canadian marketplace this week when the company announced that, effective immediately, it would be implementing a four-year warranty for the RXV1900, RXV3900, RXZ7, and RXZ11 AV receivers, AS1000 & AS2000 integrated amplifiers, CDS1000 & CDS2000 CD players and the YSP4000. Even more amazing, the warranty would be retroactive for customers who’ve already bought the products.

Years ago, when I started working at Sony, the warranty on Trinitron CRT TVs was five years. Then it became three years, and eventually one year. A co-worker of mine once cynically predicted that one day our TVs would have no warranty at all, and if a customer wanted a warranty, he would have to buy one.

He wasn’t too far off in his prediction. Warranties in CE have been steadily evolving towards two separate poles: longer, more customer care-centric warranties on higher-end goods, and shorter warranties on commodity low-price point gear. Bryston’s 20-year transferable warranty is famous in the HiFi business, and brands that aspire to be seen as high-quality use a long warranty period as a mark of prestige, such as Yamaha has now done.

Not to say that there’s necessarily anything wrong with the warranty situation at the other end of the scale. Price point electronics are so cheap today that consumers have to decide if they want to protect their toys, or view them as disposable. Earlier this year, I bought my daughter a no-name portable DVD player from Future Shop. The warranty on it was 30 days, but I elected to pay for a five-year extended warranty. As it happens, it croaked six weeks later. Because my model was out of stock, Future Shop happily upgraded me at no charge to a model with a bigger screen, and transferred my warranty over to the replacement. It’s experiences like that which can cement customer loyalty to even a big box store.

When I think of the brands that have given the best warranty service to either my clients or I, the common theme is that getting the problem solved is a pleasant, hassle-free experience.

My point, and I did have one, is that savvy retailers and manufacturers both know that warranties are an ace that they can play to seek a competitive advantage. I imagine at least one rep for one of Yamaha’s competitors must have read the news about 4-year warranties and spit coffee all over his laptop. Provided that vendors stand behind their products and give consumers a big tummy rub when they need it most, a strong warranty story is a talking point in the presentation that ends up closing more sales.

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