Aaron Conant 0:18

Happy Friday everybody. My name is Aaron Conant. I'm a Co-Founder and Managing Director of BWG Connect. We're a networking and knowledge-sharing group with 1000s of brands who do exactly that we network and knowledge share together to stay on top of the newest trends, strategies, pain points, whatever it might be the shaping the digital experiences, there's a whole talk with 30-plus brands a week to stay on top of those trends would love to have a conversation with anybody on the line today. See what's going on in your world. Also, you know, knowledge share across the board, what's working, what's not from the conversations I'm having. But I also would love to know your pain points. That's how we get the topics for these calls. And when the same ones come up over and over again. We host these events, they're interactive, if anybody has a question along the way, you have a comment, hit star five, we can unmute you and bring you in. Don't hesitate to do that if you can't come off mute. always feel free to shoot me an email Aaron aaron@bwgconnect.com we can answer questions that way as well. That includes an hour after the call tomorrow next week, whenever it is, just shoot me a note we've got 1000s of brands in the network, we can usually get an answer in under a day or so the last kind of housekeeping item here as we know we're starting three to four minutes after the hour and just a heads up, we're going to wrap up with at least you know, five minutes to go in the hour as well. It's a Friday afternoon want to make sure everybody has a chance to get out of here. And it's it's nice where you are seeing the sun here in Kalamazoo, Michigan, so might get a chance to get out a little bit earlier at least make it to your next meeting without being late. So they kind of kick off this conversation, you know, as a whole. You know, I walk through a lot of what I'm hearing I've been hearing for probably the past nine months to a year is how do I make eCommerce less less margin diluted? How do I you know, shift some of my dependence from Amazon. And I think a lot of companies got over-indexed on Amazon during the pandemic. And then with the iOS 14.5 updates and 15 updates. And you know, everybody in the world saying ASCAP not to track a lot of issues with top of funnel and bringing people into a site and therefore has a huge focus right now around how do I convert people on my site? And how do I build a market basket? How do I handle customer service and give them the best experience possible? So that, you know I can really, really optimize anybody actually get onto my site. And so we got great friends and partners of the network over Extend. Rohan has been a partner and a friend for a long time here helping a lot of different companies out across the board in the space. But you know, Rohan, I'm kind of kick it over to you, if you want to do a brief intro on yourself and Extend that would be awesome. And then we can kind of jump into an open conversation. Sound good?

Rohan Shah 3:06

Yeah, absolutely. And as always, appreciate you and your team setting this up. And thanks to everyone for joining. I know it's Friday afternoon out on the East Coast, and people want to get to the weekend. But really excited to chat with you. But little quick background on myself. So one of the founders that Extend You know, my background is pretty specifically in technology and technology innovation. So my second sort of venture-backed technology company and spent many years at BCG on the consulting side of actually building products for a lot of the Fortune 500 clients there. But, you know, on the Extend side, we started the company about three years ago, about 400 people full time right now and have raised just over $300 million, which has been really exciting. But we really work with brands and retailers to enable seamless and elegant post-purchase experiences. And so thinking through, you know, companies when they sell a product, whether they have manufacturer or just a retailer, how do we really really solve customer pain points after the point of sale, as well as driving more transaction, velocity purchase conversion and higher AB and profit ultimately, through the transactions through product protection. And so you know, I mean, everyone here has probably been to a Best Buy or have been on Amazon and seen a little extended warranty offer pop up. I think a couple things that people don't always realize about extended warranties that were really fascinating as we were starting to build the company. You know, that's why I take them as an example because I think all of us have been offered an extended warranty there. That's why it does over 52% of their profit margin and extended warranties. But the gap that we saw was 99% of retailers didn't have the ability to offer these programs to their customers. And so all of those dollars are being sucked up by that top 1% the best IBM is on at the cost of the Walmarts of the world. We saw an opportunity to say hey you know similar to what companies like stripe did in the payment side and affirm klarna afterpay in the buy now. Pay later space Why don't we just build an easy-to-integrate solution for brands and retailers to offer extended warranties and that's what we did. And you know, we've been really lucky to partner with some amazing companies and power their programs companies like peloton iRobot, JBL, Logitech and the consumer electronics space companies like, you know, we actually went live with Sarah Tom and nectar this week resident home on the mattress and home good space, companies like brilliant Earth, and the jewelry space. So, you know, a wide range of really well-known brands and retailers that that we're lucky to have as partners. And it's been amazing to see the velocity in the market, especially with the last God knows how long it's been now 20 months, 18 months through COVID and just see the velocity pick off.

Aaron Conant 5:43

Awesome. Love it. So I mean, what are you seeing change over the past year? I mean, are you seeing the same thing? I mean, you guys are dealing with a lot of clients, you have a really interesting perspective. Have you seen especially, you know, the past like three to four months this increase focus on me here is this value add services, which it is but you know, maximizing the overall shopping cart value, maximizing, you know, customer service, customer retention, lifetime value has come up a ton. Are you seeing that the same thing

Rohan Shah 6:17

100%, I think two things that sort of stood out from what you said that, that really resonate with a lot of the brands and partners that we work with, you know, I think a is there was a huge focus in the market on growth, as you know, and obviously growth continues to be important, I think people are starting to realize that it's not advantageous, if you just sell one product to a customer, you really need to think about retention, and LTV as core metrics. And I think that's where, you know, increasing purchase conversion and whatnot at the point of sale and on your website or in stores is important, but increasing basket size for those customers, as well as delivering value-added services that actually solve pain points after the point of sale. So customer buys a product and they go home, what happened next, what could go wrong, what are pain points and issues that that customer might face, and really trying to deliver services that solve those pain points, so that customers you know, have a good relationship with the brand and want to come back and want to purchase more. I always think I sound like a broken record, maybe sometimes with you, Aaron, but you know, I always think about it like restaurants, like you go to a restaurant, what happens after they bring you your meal, maybe it wasn't the right dish, maybe they mess something up, if they go run back in and bring you out a free cocktail and a fresh slate, a free dessert, guess what, you're probably going to go to that restaurant again, that's a great customer experience. If they don't, then you probably won't leave a bad taste in your mouth. So we see that as an opportunity. And we see a lot of brands and retailers that we work with really thinking through what does that customer journey after the point of sale look like? And how do I leverage experiences that that customer is going to have as opportunities for us to reengage with them and really build a relationship right through a dialogue, which I think it's so important to look at those as one to one human relationships.

Aaron Conant 7:57

Yeah, when we think, you know, in the extended warranty space is a whole? How have you seen this, add to the bottom line? So these are questions that I get, how do I increase? You know, you know, total checkout value? Obviously his lifetime value, the customer increased conversion rate, like, What impact do you see an extended warranty having in that space?

Rohan Shah 8:20

You know, we've seen a tremendous amount impact. So even starting before the transaction itself, like how do you get someone to commit to buying, we've seen partners of ours that have seen upwards of 1213 14% sitewide increase in purchase conversion, just with the presence of an extended warranty. You know, we have some friends over at Amazon. And it's interesting to see if Amazon offers an extended warranty on a $20 backpack. And when we started the business, we were like, what, why are they doing that, right? It's interesting, we have a friend over there who works on the on the product side, and they were like the presence of an extended warranty on a product, tell the customer that a third party is standing behind that product. And when customers have a million choices out there on products that they want to buy, they want to make sure that the thing they're buying is sturdy and reliable and won't break. And actually that presence of that extended warranty can actually support that. So really interesting behavioral science around these programs and offerings on products and driving more purchase conversion. And then, you know, to your point on the economic side, I mean we see typically like 2% increase on on sort of standard products across the board. From a revenue perspective in some categories like laptops, cell phones, high-end sporting goods, it's even higher three to 4%. And that's incremental additional revenue that people aren't seeing today. And a significant portion of that is pure profit to the brand and retailer right because we're an insurance company and we take all the risk.

Aaron Conant 9:46

So you know I'm seeing from the right categories for this to be applied to it. If people are looking at this, you know, across the board, are you saying they take their total revenue and just you know, times it by 1.02, or one point You know, three, and then this the incrementalist they can get. Yes, exactly

Rohan Shah 10:03

right. So we typically, you know, the masses, we typically see about 10 to 15% of customers adding these protection plans as a point of sale again, it's an option, I wish it was 100%. But the reality is, is not everyone needs to buy it, or wants to buy 10 to 15% of customers are typically buying the protection plan, and they typically price out at around 15 to 20% of the product resale price. So that's sort of the back of the napkin on how you get to that 2% lift on the revenue side. Awesome. And then from a category side, who do you see that wins the most are the people that over-index on that, and they're the people that under index, what is what does that look like? Just have a couple questions coming in around that. And just a reminder, if anybody has any questions or comments, you can also hit star five, we can unmute you and bring you into the conversation or you can keep shooting them in over over email Aaron aaron@bwgconnect.com. Traditionally what you'd expect there and in terms of who indexes on buying these is expensive products, things that have a propensity to potentially break as well. As you know, we deliver differentiated coverage in the market as well. So accidents, drops, spills, cracks stains as it relates to things like furniture and mattresses. going above and beyond what a manufacturer typically will apply on a limited warranty on a manufacturer warranty. Typically, we're seeing, you know, high-end equipment and goods convert at higher rates. But our first protection plan that we ever sold was on a $14 pair of headphones, a $14 pair of headphones for $1.50. extended warranty, right? So we see behavior across the board and across different asvs on the product side, to really drive on the conversion side. So in that question comes in is around the finance of the back end. So who replaces the item? Yeah, great question. So extended an insurance company. So like we take all of the risks on these programs. When we sell a protection plan, we are underwriting it on our end. And when a customer has an issue, or if the customer has an issue, they file a claim with expense. So they go to our little fun chatbot on our website, 24, seven, enough time, they file a claim typically will be called an adjudication decision, but typically like an approval or denial we made on the spot, so in less than 60 seconds. And then what we do is we actually purchase a new product from the brand or retailer for that customer. So there's a net-new sale on the back end for the brand or retailer. And that customer gets a new product fulfilled, we purchase that we pay for that it's completely underwritten and the balance sheet risk is exposed to us. Awesome. No love it.

Aaron Conant 12:32

You know from you know, another question that comes in is around what's the appropriate timeframe to have an extended warranty? I guess a lot of manufacturers have that standard one year. Wind is what Caitlin is the next question that usually comes up once you know what that first one is a Hey, should it be one? Should it be three? Should it be five? Should you know what should it be? And then, you know, what happens if there's an initial warranty that's already guaranteed in the product?

Rohan Shah 12:58

Yep, totally. I mean, see, you nailed it. Most companies typically have like around a one-year limited warranty or manufacturer warranty. And those typically are only covering defects in the product, right mechanical or electrical failure. Our program is, as I mentioned, go above and beyond from a coverage perspective. So for a piece of furniture, like how often is a leg actually going to break, what you're really worried about is what I tend to do, which is sit on my couch and spill a glass of wine, right. And so stains are covered and ripped to tears. So those accidental damage programs actually start on the date of purchase and go above and beyond what a limited warranty would would include typically is different by category Aaron in terms of the term length. So for a piece of furniture, we have, you know, one three, and or sorry, two, three and five-year programs just given the life cycle on those products. Whereas for something like a pair of headphones, we would do one, two and three-year options. So it's heavily customized on a product-by-product basis. And I mean, you know this, but we look at ourselves as consultants, probably not as good of a consultant as you are with your clients. But we try to be that which is we really dive into a merchants catalog, understand their product types. We talked to their customer support teams to figure out what issues that customers are facing, we literally build them a custom program to cover their products, and then define the term lengths, the pricing, etc, around that. So you know, it's easy for our sales team to get onto a call with the merchants. But there's about 20 people behind the scenes, building up those programs for those brands and retailers, regardless of their size. It merchants that sell $10,000 in goods every single year. And we have merchants that do $15 billion in sales, right, like advanced autoparts. So it's really the full gamut of customer types and product types and the term lengths and the pricing and all of that has been customized to those to those scenarios. Awesome. Yeah. So then is it a rollout so just another question that comes in. So is it rolled out product by product or is it pulled out category by category 99% of our merchants launch with us across every eligible product that they have in their catalog. It's a fast process. I mean, we take merchants live in some cases the day after they signed a contract, especially for folks like on Shopify and big commerce and Magento, and some of the sort of pre-built platforms. So it's a very quick process, I talked about the work that's done, you know, for product like a pair of headphones, it's relatively standardized in the coverage that we want to include around accidents, damage, spills, etc, is already bespoken built for other products, you know, talk about a merchant like iRobot that has little room, but doing nothing except run runs around your home and eat up the dirt and trash. with them. The number one problem that their customers face is actually the Roomba driving over dog poo and cat pee on the floor. And so we built them a custom program that covers animal biohazard, and then merchandise and marketed that to customers during the checkout process. So it's different scenario by scenario is the simple answer. But it typically is no more than a few days to get it up and running. And we roll out across the entire catalog. Now merchants can make a decision to say, Hey, I don't want to cover certain products. Maybe I want to drive people to a higher price point product, maybe I want to incentivize certain parts of my catalog from a purchase perspective, and that's totally fine. What we see is typically people are rolling out across the entire catalog and across any category where they can offer these

Aaron Conant 16:24

programs. Awesome. Love it. What is the just the diversion? Because I think somebody just out in around increasing conversion rate, can you capture that one more time? And then, you know, another one, you know, is total time to roll out? And then another question is around communication to the customer. Yeah, absolutely. So

Rohan Shah 16:43

I'll try to do them in order if I remember everything purchase conversion, you know, what we see is typically purchase conversion goes up with the presence of an extended warranty offer, we have some merchants that have seen upwards of you know, 12 to 13%, sitewide increase in purchase conversion, just with the presence of the extended warranty. So again, I mean, look insurances insurance, what does it do, it gives customers peace of mind. And ultimately, that peace of mind can really help get people across the finish line is sort of what I boil it down to the second, he talked about rollout. Again, it's different for different retailers and brands. For folks on Shopify, like I mentioned, we have a team of 20 Shopify developers that literally go in and do all of the technical integration. So that can take a day, five days Max, from a go live perspective, other partners like advanced autoparts, guess what they have for 1000s of brick and mortar locations. So that rollout took a lot longer. The online activation piece, I would say is a matter of a few days, up to sort of 30 days for really custom built homegrown platform integrations. That was the last question. Well,

Aaron Conant 17:44

I've got a couple more that come in is how do you communicate it to the customer?

Rohan Shah 17:48

You know, obviously, I'm going to take it like meeting, can you communicate post-purchase? Or is it only on the actual purchase face? Or maybe it's you communicate it on the actual product page?

Aaron Conant 18:00

Do you communicate it at checkout? And then the next one is, how do you communicate, post purchase if they didn't buy it? Yeah, totally.

Rohan Shah 18:09

So from a communication perspective, I mean, during the checkout process, we have not to get too nerdy, but like an SDK, and APIs that basically merchandise, all of the aspects of the program and coverage and price points to customers. So none of that needs to be built by our partners at all. That's completely out of the box and part of our sort of suite of offerings. That's during the checkout process. If a customer doesn't buy, we also enable post-purchase campaigns. So customers typically have within the lifetime of the manufacturer warranty to come back to the brand's website and add an extended warranty on that product. We do this via email. In most cases, we can do actual inbox assets. So think about like third-party channel sales for post purchase, registration, and offering and upselling an extended warranty through that modality as well as we actually have integrated with connected devices too. So take a use iRobot as an example, since we were talking about them, when you get home and unbox it for the first time you activate it using your phone using an app. And we actually offer an upsell customers additional protection through the native app experience as well. So it's really, you know, I think the better way to put it is how do we meet your customers where they are after the point of sale, thinking like upon delivery, right? loving your new product, make sure it's protected from breakdown spills and cracks and having a customer navigate back to the websites to purchase that protection. So a lot of post-purchase communication. And then also all of the columns around a customer who has bought a protection plan are fully managed and handled by the extended side as well. So those are not things that merchants need to build. We communicate with the customers, we remind them of their coverage, we drive them back to our claims experience, if they're having an issue. What is the another question comes in who handles the customer experience? Yeah, so customer experience is fully handled by extent. We are a fully licensed what they call administrator in the space. So customer claims are fully managed by Extend, customers can come into our website file a claim 24 seven using a chatbot. that lives there. My name is Kaylee, I was joked that she's our number one employee because she never sleeps, and always has a smile on her face. But she's a fantastic way for customers to be able to file a claim, you know, we see over 96% of claims happening digitally through that chatbot. And the majority of them are happening between like 7pm and 11pm. local time, because guess what, you know, a mom at home, wants to put her kids to sleep, and then deal with all the stuff that she needs to. We also have a call center full-time employees based in Dallas, Texas, that can also help customers if they have any escalations or other issues as well. Separate to that, we do have some merchants that say, you know, my product is pretty complicated. Sometimes we need to run diagnostics on it. And we want to be able to have that front-end touchpoint. We also have back-office tooling for those brands, those are typically manufacturers, back-office tooling, where they can take the customer call help the customer as well as file a claim on behalf of the customer directly through our Back Office portal. So a lot of flexibility, if you will, around how we handle those customer claims. The majority of our merchants say guess what you guys are the experts just go take care of everything. And they take their customers over to us if the customers call them around to claim. So what is the that the total cost to put this in in place, though,

Aaron Conant 21:25

right? Is there a web development? You know, is there only certain websites you work with? I want to kind of expand the question does usually it's an integration standpoint, right? And so just, you know, from that standpoint,

Rohan Shah 21:36

why? Why not? Why not do it? I mean, look, I'll start with with, with the pain points and headaches that I get, right, which are the number one reason people don't do this? is it's not a question of, if it's a question of when it's development bandwidth on their team to get the program integrated. You know, the beautiful part about this questionnaire is that I love to answer is that we don't charge anything for the solution of the platform, right? There's no monthly or annual fees and setup costs, you know, pardon my French, but like, I think that's kind of bullshit. And I think people in the space are frankly, a little bit annoyed with the noise around companies reaching out to them selling something new, that doesn't have immediate ROI, or immediate impact, right on the bottom line, or from a customer experience perspective, we try to look at ourselves as again, as consultants. And we align our business model around that, which is I don't make money until a customer buys an extended warranty. So we are super motivated to a get the integration up and running as quickly and as effectively as possible. And then be optimizing those programs over time to juice the most amount of revenue out of the program as possible. And this is where a fully managed fully turnkey solution can really support that and why you know, the technology first approach has allowed us to be as successful as we have today. Awesome, Love it. Love

Aaron Conant 22:59

it, just a reminder of others that you've joined halfway through, you have questions, you can keep emailing them to me, Aaron aaron@bwgconnect.com you can hit star five, handle up on the screen here. And we can unmute you and bring you into the conversation as well.

Rohan Shah 23:15

So, you know, is there? Is this better suited to expression? Is this better suited for retailers? Or is this better suited for direct to consumer company? Both? I think there's a simple answer, you know, we see a lot of success. And we've obviously started, we started our business really focusing on the online ecosystem, and have had a lot of success there especially, you know, riding on the waves of companies like a firm afterpay klarna, and the buy now pay later space. With the fast and easy integrations. You know, what we've seen that's interesting, Aaron, is that with an in-store program, or an omnichannel program, there's actually a ton of benefits. Namely, you have a real human being in the loop that can communicate with a customer around why they might want to buy this extended warranty or protection plan. In some cases, in certain categories. We see upwards of like 40 to 50%, attach rates, we call it tax rates, or percent of customers buying the extended warranty when it's offered, because it's an assisted sales process in store. So I think, you know, whether it's a brand or manufacturer or a retailer, it doesn't really matter. What matters is what products are you selling? And do you have customers that are looking for these products, these extended warranties and protection products? And the simple answer is almost always Yes. Right? If it's an eligible product, awesome. Love it. So another question that comes in. What about bi

Aaron Conant 24:37

monthly plans connected devices,

Rohan Shah 24:40

the party looking at extended warranties for you know, different types of products or as a whole? Totally? Yeah, I love this question. So I actually run our Product Strategy Group here to Extend and it's something that we've, you know, we started really thinking about a couple years back because what we noticed is that there was really no innovation around the programs themselves, they were super templatized and super off the shelf. And they weren't specific to different types of products, hardware and hard good products that were being sold. So we've actually built and launched monthly extended warranty plans also. Now, I'll caution you that it does not make sense for every product to have a monthly extended warranty plan. I think a lot of folks, you know, think about hardware or devices, whatever you want to call it as a service. And in those situations where there's a monthly component for servicing plan around the product already, we build our extended warranties into those from a monthly basis. So we're doing that with companies like Bose and others today around specific products that have a monthly care plan already. So we can absolutely launch that we're also focusing on a lot of other types of programs, including, you know, broader protection across multiple products in one purchase and things like that. So a lot of innovation that we're bringing to the table around that. And we're really excited about the early results that we've seen in the market. He's talking about payments plans. What's awesome is that even today, and without any specific partnerships in place, if a customer goes through the checkout process, and leverages, you know, a firm klarna after pay PayPal credit, whatever you have, they can actually finance the extended warranty also. And so we see even higher conversion on the extended warranties with customers who leveraged buy now pay later solutions. So a lot of sort of ancillary benefits to having an ecosystem of these solutions on your website or in-store for customers to leverage.

Aaron Conant 26:36

Awesome, I love it. Are there other things that you see popping up?

Rohan Shah 26:40

You know, in, you know, across this space in particular, today that that you that that haven't come in so far. In terms of services? Yeah, that one say yeah, so I've got a second another question that comes in.

Aaron Conant 26:55

Says I was wondering who Extend’s target customers are given that most big-box retailers build extended warranty solutions in-house? In other eyes? What comprises the serviceable addressable market of 99% of retailers who don't have an extended warranty

Rohan Shah 27:09

solution? Yeah, absolutely. So the extended warranty market in the United States is expected to grow to be $100 billion in premiums by 2023. So to give you a sense of size, it is massive. The other interesting thing that I've just comment on is the majority of big-box retailers today have extended warranty programs out there majority, not all, the majority of those are not in house programs, they are powered by a third party, typically an insurance company and carrier who underwrite and take risks on the program's they may be white labeled from a branding perspective. But all of the actual insurance and and underwriting and actuarial are being done by an insurance company, and all of the claims are being done by the insurance company. These are typically legacy companies that don't bring technology into the fold, and are purely just a back-office provider. There's really no consultative aspects on how to improve the sales channels, the marketing, merchandising, pricing, etc, of the programs that we can bring to the table. So use the biggest examples that we have here in the United States, Walmart and Amazon, both use third-party providers for their extended warranty program. There are a few that have in-house programs, but there you can count them on one hand in terms of big-box retailers. So what's interesting is that the service addressable market is actually growing and hopefully we have some investors on the line, I liked the question. But the service addressable market is really growing fast. And, you know, we look even outside of the US as our our markets are addressable markets and have actually expanded to Canada, as well as we'll be in the EU and UK early next year. So it's a fast-growing market, and one that's getting a lot of attention and adoption now just in the last year, year and a half, with companies like ourselves who have sort of been innovating in the space. And we see it as just a ticking time bomb on as these contracts come up with legacy providers. The reality is, is they can't really compete with us both on a pricing perspective, given the efficiencies that we have in the claim side, as well as on the actual operational aspects of the programs, the skew mapping, right for merchants that has 12 million products in their catalog, I hired a guy from Walmart, and he had a team of eight people who day in and day out, just sat there mapping products in the catalog to extended warranties. we automate all of that, right? That's a pretty simple way of streamlining a lot of these operational costs. So it's pretty amazing what we've seen from a growth perspective in the market. And we're really excited for, you know, some of the investors that we have on our team on our cap table and on our board who who really helped us achieve a lot folks like PayPal and nationwide and American Express and SoftBank and more. Also just along the vein, you know, new new product verticals as a whole, right.

What do you see as the next level of this, right so it's a fantastic question and one that's super, super, super timely for us here. So we actually, early this year launched our own actual insurance company. So you know, to get a little bit in the in the nuances, you basically like an obligor and a captive in order to actually underwrite and build programs on the insurance side yourself. So we set that up early this year, it's backed by other large carriers as sort of backstop ensures. But what that enables us to do is be completely vertically integrated and build programs from scratch. So we can literally go in understand what parts of the catalog are not covered by traditional insurance companies and carriers. And we can build and launch programs that cover those products. with lightning-fast speed typically takes two weeks to build and launch the program. So we've already done this in certain categories. So you know, we have one partner, a company called Real Truck based out of Florida that sells truck parts and accessories, they had a portion of their catalogue that was significant to them from a business perspective around truck covers. And, you know, I'm in San Francisco kids. So I can, I would have to admit that I didn't know what a truck cover really was before I talk to them. But no one would cover truck covers. And we built them a program that covered rips on the foldable and roll out truck covers that covered cracks and dents on the more sturdy ones and launched that program in the market in two weeks. We're doing similar things. You know, we signed up a merchant recently, that many of you probably are familiar with named Michaels. Do you ever, you know took your kids to the store for arts and crafts project. But Michael sells a lot of picture frames and photo frames, no one would cover those programs and products, we built a product in house that covers dents, chips, scratches on the actual frames themselves. And we'll be launching that in the market with them. So a lot of innovation and flexibility that we can provide around the actual products that we cover. And we're continuing to build newer and newer programs in the market, which is another real competitive differentiator, which a typical insurance carrier would take a year to build one of those products. Is this the next evolution of a lot of different companies in your space than it is? Yeah, you know, I think, more and more. I mean, if you look at FinTech broadly, a lot of times what's happening is that companies are basically slapping lipstick on a pig, they build a kind of cool front end with a little bit of tech. But it's really serviced and offered by the same legacy companies on the back end, whether that's the credit side, right, using traditional banks and, and credit facilities to enable those products. What we notice is that the companies that are really excelling and the companies that are really winning, frankly, from a technology perspective, are the ones that own their own destiny. And they're the ones that can control the entire stack and aren't beholden to any of the large incumbent legacy providers out there in terms of their offering and programs. So we had a hard line very early on that we thought through of how do we get to being vertically integrated. It's not the fastest process, so we didn't launch vertically integrated. But we very quickly established the brokerage, which is the selling of the protection plans, and the administration, which is the ownership of the entire customer experience around claims, we actually purchased the warranty division from a on the large $45 billion Insurance Brokerage, which enabled us to have those licenses and those capabilities, we acquired that business back in 2019. So that gave us the brokerage and administration and now we have the underwriting. And that's really the entire picture. So we see other companies in the space and I run our partnerships team. And we really look at partnerships around companies that similarly own the entire stack, you can control exactly what that experience will look like for customers. Because ultimately, that's how you get re-engagement. That's how you drive LTV. That's how you drive loyalty. This, I think, is an important word that people are thinking about a lot today.

Aaron Conant 33:46

So how many people we look out two years have this as a it mean, outside of, you know, CPG? Or food? Right? How many people have this, you know, as a revenue driver on their website? You know,

Rohan Shah 34:00

I mean, I think people ask the same questions with buy now pay later. And you see articles all the time about how now, you know, if you don't have buy now pay later, you're missing the boat, right? I think we're probably about a year, year and a half away from that being the case with extended warranties and protection plans. I think it's, I mean, you said it yourself, Aaron and my job is easy a lot of the time, which is I sell additional revenue at no cost and no risk to a retailer. What someone needs to do is prioritize it on their roadmap and trust in the credibility we have in the market that we will take care of those customers. And I think we've done a pretty good job so far from doing that. So ultimately, I think it's it sort of becomes a no-brainer of do I want to make more money and drive more transaction velocity with my customers, and do I want to solve pain points that those customers have downstream and make money while I'm doing it. So you know, I think he hit the nail on the head. Like I think this becomes something that has proliferated across the entire market. And you know, we're really blessed and lucky to have been able to sign up some amazing partners early in our company's history. That is allowing us to really scale out today. I think we got 120 merchants live last quarter. And we'll do close to 200 in q4. So it's it's pretty amazing the growth we're seeing signing up 10 to 15 new brands every single week right now.

Aaron Conant 35:15

Yeah, that's pretty crazy. And I like the comparison too, because you know, by now pay later pay in for, you know, there's quad pay, which is not whatever zip there's, you know, karnas sezzle, split in total is what it used to be, hey, this is just a nice to have. And then, you know, it quickly is to a point where the average number of payment solutions is now eight, at checkout. Because it's complete, it doesn't confuse the consumer at the end, it's completely additive, it helps with conversion rate. And yeah, maybe, you know, they're saying a house at 5% rate, but it only does it two, but three of them do too. Now you've bumped conversion rate by 6%. It's, it's pretty crazy. So I think you're right, I

Rohan Shah 35:57

think, you know, as we as people struggle to increase conversion rate is huge right now, because of all the issues with iOS 14.5. And everybody asking the app not to track that. It's now you know, more important than ever to you pull every possible lever there is totally, and I mean, you know, you know, what's crazier, and I was reading this article last week about the new FinTech company that Walmart is building in house. So if you think about credit, right, which is what buy now pay later is a spectively. Alone, credit facilities are just a transaction mechanism. It's just a payment solution. And so you can, as a company, as a brand, have three different financing solutions on your website and give customers the option if you want it, right, you can pay pal two, you can have stripe, you can have whatever, as a payment option to the customer, the beautiful thing and the thing that you know, I feel lucky about is you're not going to have three extended warranty providers on your website, it doesn't make any sense. Until really companies are having to make a decision. And I think it's fantastic around who is going to treat my customers the right way. And who is best positioned in the market to continue to grow. And frankly, one of the other brands that I want to be associated with in terms of provider for my extended warranty program. These are things that bigger retailers, it's harder to build, because there's a ton of operational complexities, legal aspects around insurance and underwriting as well as handling claims, which is a cost center right? today. Unlike something like buy now pay later, which you can build in house as a large retailer, you can also leverage multiple services. So you know, we think it's one of those markets where much more so than buy now pay later is kind of a winner take all market, and ultimately, the other companies won't really be able to compete once you have someone with a ton of scale and the right technology stack or their staffing requirements. You know that to handle this? No, is the simple answer for online and eCommerce. It's fully turnkey, fully managed, we need a business decision-maker to sign on the dotted line, we work with our teams or in some cases, do all the integration work ourselves to get it live. And then it completely operates in the background, there is some training and FAQs that we provide to a support team, for example, on how to handle a customer if they were to call the brand or retailer around an issue with the product for in-store programs there is so we we actually have a Field Services Group that goes out and trains in store staff on how to market and sell those these protection plans. Again, as you might expect in-store has a ton of operational complexities that eCommerce does not. So there there are resource requirements, if you will, not dedicated, but we do take time from those folks to inform them, train them help them learn around how to best operate these programs in the in-store environment. Awesome. Well that are there. So this is a question that came to earlier as well as like, you kind of address it like, what should people be thinking about? You know, over the next year in this space? Are you seeing the same thing? It's optimizing conversion? And

Aaron Conant 39:02

you know, are there other benefits there that that might pop up? Yeah, totally.

Rohan Shah 39:06

I mean, look, forgetting about extended extended warranties, like I think focusing protocols on the call want to hear about it, like what are other people thinking about that's similar to what I'm thinking about which what I see a lot is, you know, taking the time to map out your customer journey after the point of sale. I think so much is done in so many dollars, frankly, are spent on how do you get someone through the purchase flow and purchasing a product and it's obviously incredibly important to get someone to convert, right and all of us know that I think where a lot of attention is now being spent is how do I map out exactly what that experience is going to look like from you know, a marketing perspective, what are the touchpoints I should be leveraging and when should I get a customer talking to them about a new offer an upgraded product or a different experience that I can deliver. So map that customer journey from the moment that customer clicks buy through the next few years and think about where it's relevant to engage with customer, no one likes being spammed, but people do like relevant and timely messaging. And so how do you really understand that is you really dive in and talk and learn and listen to your customers and empathize with them. And we're, you know, lucky that we're positioned, you know, being the company that we are that doesn't charge monthly and annual fees that people trust us to really go in and dive into that and help them map those things out. And I'm always happy to hop on calls with any of our partners to help them think through that because it was what I did for, you know, four or five years in my consulting days, working with large companies. So it's been pretty fun, frankly, to see the evolution of the market and the growth in the market around people really diving in and focusing on that customer journey because I think that's ultimately what's most important to drive success.

Aaron Conant 40:44

I love it. Just a quick reminder, if you have any, you know, last questions here, hit star five, hands up in the screen, we can bring you in otherwise, you know, you can keep emailing them to me, Aaron aaron@bwgconnect.com to set a few minutes left before we take off a little bit early here on a Friday. But you know, in this space they do you know, Rohan, thanks for being such a great friend, partner supporter of the network as a whole. You know, everybody on the line today anybody wants a follow-up conversation 100% we're setting that time up. Just all around great industry leader thought leader in the space as a whole and you know, customer service, customer retention, lifetime value in everything that goes around in it and just is an awesome company to Extend it's, it's worth putting some time on the calendar Connect, you know, from my side would love to have a conversation with you to pick your brain and get other topics for calls. But you know, Rohan is you think here, key thoughts or key takeaways? I don't have any more questions rolling in right now.

Rohan Shah 41:43

And so we can kind of Yeah, wrap up a little early in a Friday. What's top of mind for you, as we wrap up here? I think what's top of mind for me is what's top of mind for everyone on the call, which is how, how the hell am I going to keep things afloat as we head into Black Friday, Cyber Monday. So you know, I mean, what's the one of the things we think about a lot is, how do you take advantage of the influx that is going to happen? No. 40% of our business, if not more is generated through the q4 and holiday season. How do we really take advantage of that is a question that we get a lot from our partners, both prospects that we're talking to in the sales cycle, and as well as my partner's, right where we're digging in, and we actually give them marketing resources and whatnot to help them build up their businesses. So you know, I would say, as you think about those, those opportunities that are on the horizon, as we head into that, that busy season, you know, we would love to be a part of that conversation. And there's a lot of things that we're doing right now in terms of preferential commercial structures for folks that commit to going live before the holidays and things like that. So we're more than happy to talk, even if it's just, you know, educational, and we can tell you some stories of what we've seen in the market. I'm always happy to talk and we have some lovely people on our sales team as well that can help out but you know, really, hopefully, people here can can look at us as a thought partner and a true partner in terms of our relationship and how we can help them build up their businesses headed heading into the busy season. Well, I

Aaron Conant 43:04

love it. Yeah. Again, encourage anybody do you have time, you know, connected around the team of Extend awesome, great friends and partners and supporters. The network is whole. And with that, I think we can wrap up prayer your early. I mean, I hope everybody has a fantastic Friday. A great weekend, everybody. Take care. Stay safe. I look forward to have you at a future event. For a follow-up email from us. We'd love to be in touch. All right. Appreciate it. Thank you, everyone.