Extended Warranty Program

A Comprehensive Guide to Evaluating Your Extended Warranty Program: A Must-Read for OEMs

aftermarket service customer-centric extended warranty field service gap analysis oem technology warranty Oct 10, 2023

In today's fiercely competitive OEM landscape, an extended warranty doesn't merely serve as an additional layer of customer reassurance—it's an indispensable strategic asset. While merely offering an extended warranty might seem like a customer-centric approach, the real value lies in its strategic evolution. For an OEM, it's imperative to not just provide, but to perfect, the extended warranty program. Here's an exhaustive guide to achieving that.

1. Sales Analysis of Extended Warranties

Before embarking on any improvement journey, you must know where you stand. Sales data provides a clear picture of customer preferences. Dive deep into which warranties are top sellers and which lag behind. This isn't just about numbers but decoding customer preferences. Why is one warranty more popular than the other? Is it the duration, the coverage, or perhaps the price? Analyzing this can guide subsequent strategies.

2. Total Available Market (TAM) Assessment

Understanding the maximum potential of your warranty programs is fundamental. To determine the TAM, consider factors such as the total number of units sold, potential repeat customers, and the broader market's size. This analysis provides a framework for realistic goal-setting.

3. Market Penetration Insights

With the TAM defined, evaluate your brand's actual reach. How big a slice of this potential market have you tapped into? If the penetration is less than anticipated, it's an immediate signal to revisit your marketing and sales tactics. Are you effectively communicating the benefits of your warranty to potential customers?

4. Gap Analysis

Spotting gaps is a step closer to plugging them. Areas with low sales might indicate regional preferences or disparities in marketing efforts. Also, discern if certain demographic groups or product lines are underrepresented in warranty sales. These gaps provide actionable insights for targeted marketing campaigns.

5. Understanding the Gaps

Identifying gaps is only half the battle. The crux lies in understanding their root cause. Maybe the pricing isn't competitive enough, or perhaps the marketing message isn't resonating.

Sometimes, it could be as basic as customers not being aware of the warranty's existence or its benefits. A deep dive into customer perceptions and behaviors can unravel these mysteries.

6. Areas for Improvement

Once you've demystified the gaps, the path to improvement becomes clear. From revamping marketing strategies to making pricing more competitive, every aspect needs scrutiny. Consider expanding the warranty's scope or simplifying its terms for better customer comprehension. Also, empowering your sales team through training can make a world of difference in how effectively the warranty's value proposition is communicated.

7. Feedback Integration

The voice of the customer is paramount. While sales figures provide quantitative data, direct customer feedback adds a qualitative dimension. Encourage and facilitate feedback, both from those who opt for the warranty and those who don't. This feedback can offer invaluable insights into further refining your warranty offerings.

8. Technological Enhancements

In an era of rapid technological advancements, leveraging tools like AI can be a game-changer. Predictive analytics can forecast warranty claims, potential market shifts, and evolving customer preferences. Integrating such insights can lead to a more proactive and adaptive warranty strategy.


The journey of perfecting an extended warranty program is iterative and dynamic. The key lies in continual evaluation, backed by data-driven insights and a genuine intent to deliver value. In a market that’s in constant flux, adaptability is the only way to stay ahead. By conscientiously assessing and refining warranty offerings, OEMs can not only remain competitive but also reinforce their commitment to customer satisfaction and, in turn, bolster profitability.

However, while self-evaluation is crucial, an external expert perspective can provide invaluable insights. At Blumberg Advisor, we offer an in-depth audit program to assist OEMs in optimizing their extended warranty strategies. Interested in diving deeper? Download our EWSC Brochure and discover how we can elevate your warranty program to unprecedented heights.

Ready to unlock the full potential of your extended warranty? Let's embark on this transformative journey together! Explore our Audit Program Now.

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