April 10, 2018
Leveraging Warranty Analytics to Increase Profits and Reduce Costs
By: Jason Acimovic

Warranty claims from customers cost manufacturers about 1.5% of their revenues. Thus, making even a small reduction in the amount paid in claims can have a huge impact on a company’s bottom line. In addition to these direct costs, there are indirect costs associated with allowing product defects to be undetected. Customer safety and trust may be at stake, which could have a detrimental impact on the manufacturer’s brand image. Manufacturers are searching for ways to reduce their claims expenses, recover more from suppliers, and detect defects sooner. Warranty analytics is a key ingredient to achieving these goals.

Warranty analytics is not just for data scientists. A successful warranty analytics strategy requires not only that the right analysis techniques are utilized but also that good information technology systems enable data collection and linking of databases across departments. Thus, as a manager, you should understand three things: the benefits warranty analytics can bring, what is necessary to enable the successful application of warranty analytics, and what warranty analytics can do.

For example, Lorraine is a warranty manager at Hoverly Driftin’son, a manufacturer of hoverboards. She has been asked to develop a more robust warranty analytics approach to their new hoverboard, the Salamander. Lorraine must consider the following aspects of warranty analytics both before and after the Salamander’s launch:

  • What kinds of data collection systems should be set up?
  • How much could be held in warranty reserves?
  • What kinds of extended warranties can be offered?
  • How can warranty fraud be detected?
  • How can product defects be detected as early as possible?
  • What are the analyses that should be run regularly?

Do you have a handle on what is driving most of your warranty expenses? Do you wonder if you are offering customers the right extended warranty solutions? Are you collecting the right kinds of data to enable useful analyses? Are you confident that you are doing everything possible to detect product defects? The Accenture Academy courses Warranty Analytics Basics, Warranty Analytics and Warranty Reserves, Warranty Analytics and Warranty Claims Data, Warranty Analytics and Extended Warranties, and Warranty Analytics and Fraud, Defects, and Opportunities will introduce you to warranty analytics and provide a solid foundation to take your warranty management strategy to the next level. 

Based on publicly traded companies based in the United States, Warranty Week, “Fourteenth Annual Product Warranty Report,” March 23, 2017,

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