In 2021, the B2B eCommerce industry is expected to reach $1.8 trillion in the U.S. alone, per a Forrester study. That staggering number is significant in more than one way. It also represents 17% of all B2B sales in the U.S., yet another indicator that though B2B brands have been historically reluctant to embrace eCommerce, creating an impactful digital experience for customers is increasingly critical - and increasingly tied to a company’s sales revenue.
Due to the impact of Amazon Business, eCommerce is no longer negotiable. Amazon has altered the landscape, buyer demographics are shifting, and with all of these changes - not to mention an unprecedented global pandemic that accelerated online shopping adoption - consumer expectations are shifting, too.
So how can brands differentiate themselves and stand out from competitors in an increasingly crowded market?
One way is through a robust B2B return policy, including B2B extended warranties.
Why Consumers Care
Shopping online can still be intimidating for risk-averse customers, particularly when expensive products come into play. In fact, just 15% of consumers indicated that they’d be comfortable making an expensive purchase online, per a 2019 survey. Consequently, shoppers want assurances when making larger online purchases. This includes a guarantee that the product will last, or at the very least, that they have clear recourse if it doesn’t.
Additionally, for products that are in high-use and are vulnerable to everyday wear-and-tear or accidents, like laptops, customers are often more than willing to spend money on accident insurance, product protection, or an extended warranty. This provides them with confidence in their purchase and loyalty to your brand.
Customer Service & Flexibility
Beyond the fear of product failure or accidents, customers also appreciate B2B agreements that allow for flexibility. Strict B2B contracts can prevent customers from making purchases just as readily as sticker shock can. Easy cancellation, options for repair and replacement, quick and transparent communication surrounding the extended warranty - all of these elements go a long way in securing customer satisfaction.
Why Companies Should Care
Customer Loyalty & Lifetime Value
As mentioned above, robust warranty policies can have a significant impact on customer loyalty. This alone should motivate brands, as InMoment reports that 77% of consumers say they’ve stayed loyal to specific brands for over a decade. The simple truth is that satisfied customers are repeat customers, and warranties go a long way in ensuring satisfaction and increasing a customer’s lifetime value.
Clear Expectations & Communication
Yet not only do extended warranties provide customers with comfort and security in their purchases, they also give businesses an opportunity to carefully spell out expectations. A clear warranty policy all
ows a brand to detail exactly what is and isn’t covered in a limited manufacturer warranty versus a paid extended warranty. This kind of straightforward communication and terms gives customers additional confidence in a brand, and alleviates those risk-averse tendencies.
Increased Revenue & Market Share
Furthermore, when properly leveraged, extended warranties or product protection plans can then become an entirely new revenue stream. In fact, it’s estimated that Best Buy makes half of its annual profit from the sale of extended warranties. Beyond sheer revenue gain, warranties also help differentiate a brand, setting it apart from competitors and helping it to gain market share.
For B2B eCommerce in particular, extended warranties can be a significant selling point. B2B buyers may be willing to pay more for the guarantees and customer service a brand provides if and when something goes wrong. In fact, a staggering 86% of B2B buyers say they’ll pay more for a great customer experience and are willing to pay an average of 13% more for added features (like warranties) when the customer experience is superior.
Warranties are the Future
Historically, only big box companies like Best Buy or Amazon could offer warranties and product protection plans or guarantees. This capability provided already behemoth companies an additional advantage.
Fortunately, scalable solutions like Clyde now make this capability accessible to eCommerce brands of all sizes. Even better, brands who’ve adopted the practice have seen the payout. Per an Assurant study, extended warranties on average increase a customer’s intent to buy by 25%. Clyde’s customers see an average increase of 9% in order value.
Not only do companies see benefits now, but projected future benefits are significant.min 2019, the global extended warranty market was valued at nearly $121 billion. By 2027, it’s estimated to reach almost $170 billion, per Allied Market Research.
Now is the time for B2B eCommerce brands to invest in warranties and secure customer loyalty, gain market share, boost sales, and differentiate from competitors. Between the hard numbers that demonstrate the impact of offering product protection and guarantees, and increasingly accessible solutions that are both scalable and affordable, there’s never been a better - or more critical - time to adopt or enhance your warranty capabilities.
And if you’re not sure where to begin, reach out to the team of experts at Object Edge for a free consultation.