How to Create Brand Trust, Increase Conversions, and Improve Loyalty with Extended Warranties

May 18, 2021 1:30 pm2:30 PM EST

Summary

During our virtual events, we encourage senior professionals to share & network with like-minded industry peers. Each session is moderated by a BWG Connect professional to ensure that our conversations remain on topic and answer critical questions that the audience truly cares about.

All audience members will have the ability to ask live questions and will have access to introductions to any of the attendees following the event. We're always open to making connections to others within our network as well.

BWG Connect & Extend invite you to participate in an interactive discussion with your peers.

As always, there will be no sales pitches and there is no cost to join.

Discussion Topics

  • Rohan Shah explains what makes Extend different from other extended warranties programs
  • How COVID-19 has changed extended warranties for online shopping
  • The benefits of offering product protection and warranties
  • Which price points and industries are best for warranties?
  • How to apply warranties to brick and mortar stores
  • Are Extend’s warranties a white-label product?
  • Rohan talks about new developments and specific product categories in the warranty and protection plans space

Event Partners

Guest Speaker

Rohan Shah

Founder, Head of BD & Partnerships at Extend

Rohan Shah is both the Founder and SVP of BD & Partnerships at Extend, a software company that offers extended warranties and protection plans as a service. Extend integrates its system directly into eCommerce solutions such as Shopify and Magento, and works with many leading brands like Peloton, JBL, RealTruck, and more.

Rohan is also an Investment Partner at Shah Capital Partners and a Gala Committee Member & Fundraiser for the American India Foundation. In 2020, Rohan was included on Forbes’ list of 30 Under 30 in the Retail & Commerce category.

Event Moderator

Aaron Conant

Co-Founder & Managing Director at BWG Connect

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution. BWG has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.

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Event Information

May 18, 2021 1:30 pm - 2:30 PM EST

Event format

Roundtable Layout
Featuring 20+ executives, where everyone can contribute, ask questions and learn from peers
On-Topic Discussions
Q&A format, moderated by BWG Connect with group interaction throughout
Make Connections
Opportunities to network before and after

BRINGING TOGETHER INFLUENTIAL EXECUTIVES AND SENIOR PROFESSIONALS

What is BWG Connect?

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution. BWG has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.

Key Discussion Takeaways

Do you want to protect your eCommerce brand? Are you looking for services that can help you add value to your business while boosting its safety at the same time?

Extended warranties have traditionally been the domain of big-box companies. The added security and peace of mind that a protection plan brings can boost pure margin revenue, improve the bottom line, and build trust between brands and customers. Things are changing, however: these warranty-related benefits are no longer exclusive to large retail stores, but are also available to eCommerce businesses. So, how can you invest in warranty and protection services and make the difference in your eCommerce business today?

In this virtual event, Aaron Conant sits down with Rohan Shah, Founder of Extend and SVP of BD & Partnerships, to break down what makes extended warranties so valuable for eCommerce companies. Rohan goes through Extend’s warranty and protection processes, explains how these warranties are best used, and reveals the exciting projects and products that Extended has on the horizon.

 

Here’s a glimpse of what you’ll learn:

 

  • Rohan Shah explains what makes Extend different from other extended warranties programs
  • How COVID-19 has changed extended warranties for online shopping
  • The benefits of offering product protection and warranties
  • Which price points and industries are best for warranties?
  • How to apply warranties to brick and mortar stores
  • Rohan talks about new developments and specific product categories in the warranty and protection plans space

Discussion Transcription

Aaron Conant  0:18

Hey, everybody. Happy Tuesday. Welcome to the call. My name is Aaron Conant. I'm Co-founder, Managing Director of BWG Connect we're a networking and knowledge-sharing group of 1000s of brands who do exactly that. We network and knowledge share together to stay on top of the newest trends, strategies, innovations, things that are shaping growth in a digital space as a whole. I chat with about 30 plus brands a week, just to stay on top of those digital trends. And then when the same topics come up over and over again and the same areas of interest, then we host an event like this. And so if anybody like to ever have a conversation around digital strategy as a whole, what's happening across the landscape, more than happy to set aside some time, that's actually like I said, how we get topics for the call. So more than happy to network and knowledge share what we're hearing across the digital landscape. But also, they would like to pick your brain on Hey, what's the next topics for calls as a whole. That's everything from Amazon, direct consumer, performance marketing, international expansion, big questions today around third party logistics, you know, people that can do the pick pack ship without breaking the budget as everybody tries to manage the looted margins that have come with eCommerce blow up as a whole. And as we get started today, just a couple of housekeeping items, we're starting, you know, three to four minutes after the hour. And just a quick heads up, we're going to wrap up with three to four minutes to go as well. So we're giving you plenty of time to get on to your next meeting without being late. The last thing is any point in time you have a question, hit star five, we can unmute you bring you into the conversation, get the questions answered. And if you have a ton of background noise, if it's easier, you can always email me, Aaron, aaron@bwgconnect.com. And we'll feel questions that way as well. That includes an hour after the call tomorrow, next week, to have any questions in a digital space you're looking for any help any guidance. Don't ever hesitate, shoot me an email, I always love to jump on the phone or just shoot you an email back with some answers there. And with that, I want to bring it up. You know, how we got to this topic as a whole. A huge trend that I've been seeing from the brands as a whole is huge shift to eCommerce and digital sales as a whole is brought with it increased look at overall margin on this area. So look back 15 months ago, and people are cruising along and digital isn't as big of a piece of their business business. It's a little margin dilutive. But at three to 10% not that impactful. COVID hit now it's 30 plus percent. And now the lower margins are very impactful. And so a lot of people are out there looking for ways to you know, balance that how do we increase, you know, the size of the basket at checkout? How do we optimize a lot of different things and we got some great friends and great partners, the network over at Extend, and they offer a really neat solution. We've been connected with them by 10 plus brands, they hey, these guys do something really neat in the space, they increase the bottom line and they increase customer satisfaction. And so you know Rohan is here, you know, to some extent they're dealing with a ton of different brands and you know, just agree to jump on, give us the overall landscape of you know, brand trust, conversions, the impact that extended warranties can have as a whole. With that Rohan, and I'm going to 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 the overall questions as a whole. Just a quick reminder if people have questions around this area hit star five we can bring you in or emailed me, Aaron aaron@bwgconnect.com. But anyways, Rohan, I'll kick it over to you.

Rohan Shah  4:06

Yeah, perfect. Appreciate it. As always appreciate everyone for joining the call today. I I know there's an overload of conference calls and video calls every single day now as I paced around my kitchen, but really appreciate everyone making the time. So a little bit about myself. My name is Rohan Shah, one of the founders at Extend. Here at Extend I head up all of our business development, partnerships, strategy and enterprise sales. And really the way you can look at Extend as a modern you know, sort of use our tech nerdy terms API first platform for extended warranties and protection plans. You know, most people are pretty familiar with extended warranties. We've all been to Best Buy back in the day and someone's tried to sell us an extended warranty. We've been through Amazon and Walmart and Costco and seen an extended warranty offer. But what they don't typically are aware of around extended warranties is a the fact that these programs have really only been accessible to For the top 1% of retailers, those massive big box companies that I just mentioned, and be just how impactful extended warranties and protection plans can be from both a bottom line perspective, as Aaron mentioned, it's pure margin revenue that we drive to our retail partners through the extended warranty sales, but also the downstream impact on customer satisfaction, loyalty and reengagement that these programs can have when done properly. And so that's really where Extend has had a lot of success is enabling brands and retailers to offer these programs in a quick and effective manner through both online as well as third party brick and mortar telesales, etc. sales channel, but then really, really taking a strong focus on customer experience and customer claims. Something that often has been sort of discounted as part of an important part of this process. Today, you know, Extend powers, extended warranty programs for a number of different types of brands and retailers, including folks like Peloton, iRobot, JBL, Logitech in sort of a consumer electronics, home fitness space, larger retailers like Advanced Auto Parts, Zimit, and others that sell a variety of different products. So we've really had a ton of success in a pretty short amount of time. And I'm super proud and excited to announce that actually, this morning, we announced a $260 million Series C fundraise to further fuel our growth in this space. So we're really excited about you know, the partners and brands that we work with today, but especially energized about the future of this space, and what more we can do for the many partners that we maybe don't work with yet.

Aaron Conant  5:05

How much was that, again?

Rohan Shah  6:35

$260 million, Aaron.

 

Aaron Conant  6:38

Awesome, awesome, good. pumped for you guys as a whole. And just a reminder for people who have joined, if you have questions along the way, don't hesitate to jump in, hit star five, we can unmute you or always just email me questions, Aaron aaron@bwgconnect.com. So a lot of questions that come in just conversations that I'm having as a whole, you know, and one is around, you know, the impact, you know, as I was talking a little bit with COVID-19, and this massive shift to online and direct sales, you know, how has that shifted customers, like purchasing extended warranties as a whole?

 

Rohan Shah  7:14

Yeah, you know, it's really interesting. I mean, it's, I think it's helpful to take a step back and just think about sort of the evolution of the eCommerce tech stack. This is a starting point. So I mean, you first had companies like Stripe, really, that came in and enabled online retailers to start taking payments during the easy to integrate manner, right? Then you had companies like Affirm and Karna and Afterpay, who made services like, you know, pay overtime and installments and buy now pay later really accessible to a wider market. Something that you know, traditionally was called layaway that people didn't tell about, I didn't tell my friends, when I use layaway has now become sort of a sexy, modern, approachable experience, we're really seeing the same thing, Aaron in the warranty space where consumers are being more and more likely to both add these protection plans are familiar with add on services through the eCommerce buying journey, as well as the, you know, offline buying journey as well. And so with COVID-19, what we've seen is, you know, people are really looking at what am I purchasing? Where am I purchasing it from? What happens if things go wrong and thinking about sort of the negative impact that those experiences can have. And we've seen a huge uptick both in overall sales volume, but also in what we call like a tax rate or take rate on extended warranties as a result.

 

Aaron Conant  8:29

So super interesting. And how does it work as a whole? Because I tell you the other side of things where people have a concern, and they start to the consumer side is with everything that's happened with COVID and manufacturing people going in and out of manufacturing, you know, maybe you know, COVID hits, you know, that facility and new people are brought in on the consumer side, there's a concern around, you know, quality of goods as a whole. I wouldn't say it's hypersensitive at this point. But there is that thought out there as a whole. So a couple questions like, you know, that come in a lot. How does it like a digital age extended warranty work? Look, you know, you can comment on others, you can comment specifically on yours, you know?

 

Rohan Shah  9:12

Yeah, totally. I'll comment on what I know best, which is ours, our platform, but really, you know, it's actually really simple in terms of how we get the programs up and running and what the consumer experience looks like around that. So, you know, we partner with a variety of different brands and retailers anywhere from post on Shopify, selling a couple $100,000 in goods, all the way up to a retailer like Advanced Auto Parts where they have 4000 brick and mortar locations and are doing 10s of billions of dollars in sales. What we do is we have our flexible technology platform where we integrate with their different sales channels, whether that be an eCommerce website, a point of sale system, you know telesales on the back end, etc. That process can take anywhere from in some cases a few hours, on platforms like Shopify and Magento, all the way up to a few weeks on more complex systems. So fast integrations, to get those extended warranty offers up and enabled for customers. As customers go through the checkout process, really what it is, it's just another SKU, Aaron. You're adding another product to your cart that you can then check out without having any sort of change and experience or having to go to another website. Customers check out we have multiple offers, our technology actually helps merchants merchandise these offers as well. And so we're seeing three to 4x. The standard industry attach rates, just through better merchandising more transparency, and better offers for customers with better pricing. And when customers convert or purchase the extended warranty, they immediately get an email with basically like a welcome to the community email from Extend. From there, they have details around their protection plan what's covered what's not as well as how they can file a claim if anything goes wrong. And when customers go to file a claim, we actually have a digital chat bot on our website that today administers over 98% of our claims in less than 60 seconds. So just face back to some of those experiences that some of you on the call may have had of picking up the phone waiting on hold for 30 minutes, dealing with someone in a call center in another country and it taking five to seven business days to actually get a decision and you need to save your paper receipts and stuff that none of us really do anymore. We've removed all those gotchas so fast administration or judication of a claim. And then direct fulfillment in many cases where we send customers back to the retailer's website, which store credit and they purchase, again, from that retailer or brand. And the brand gets paid for that sale or for that replacement product as well. So really not just providing a margin lift on the front end of the extended warranty sale, but also driving repeat traffic and engagement and loyalty ultimately downstream for those brands as well. And we can do that, because we're integrated across the ecosystem that these merchants have to offer to their customers.

 

Aaron Conant  11:48

So a question comes in like, what is cost to implement? And then what is, how do you attribute like a return on it? You know, is it an increase in conversion rate? Is it a certain percent? Like, you know, 3% added to the bottom line? You know, I think people are looking are concerned, A: You know, what is the impact and the customer experience? Yes, 100%. But also what, what is the impact net on the business as a whole?

 

Rohan Shah  12:18

Yeah, totally. So I'll start with the cost to implement. So Extend doesn't charge anything at all, to implement our solutions. Actually, I don't make money on any deal that we sign until customers start buying extended warranties. So it's a true partnership in every sense of the word out there. There are for some websites, or some brands, who have more custom built websites, some costs internally to implement, because you'll have your development teams. In other cases on Shopify, we actually go in there and do all the work for the merchant themselves. So they do literally nothing. We show them example, and then it goes live on their website. In terms of the impact, you know, we really look at the financial impact across two lenses. One is we see anywhere between 10 to 15% of customers adding the extended warranty on our typical product categories. In some categories with more expensive products like furniture or home fitness, that take rate goes up in some cases up to 20-25%. So a significant portion of customers are buying. And typically the cost of the warranty is around 15% of the product retail price. And so by and large, what you're estimating is around a 2% top line revenue bump just by implementing the program across the eligible product sales, I say eligible product sales because not everything can have an extended warranty offer on it, right a T shirt or a sweatshirt or something like that we can't sell extended warranties on. However, electronics, fitness equipment, sporting goods, bags, jewelry, watches, sunglasses, auto parts, you know the list goes on furniture, I'm missing a few probably, but there's a pretty wide aperture of what we can cover. So a 2% ish top line bump is what we see across our merchants today, as well as we actually see purchase conversion uplift on a number of our partners websites. So in some cases, up to 10 to 15% increase in purchase conversion, just because consumers have more trust in brands and products from retailers where a third party is willing to stand behind it. You know, Aaron, I think I told you this fun story. But when we first started the business, I chatted with a friend of mine who works at Amazon and merchandising. And they were offering extended warranties on $25 Jansport backpacks, and I was kind of sitting there so confused, like why are you offering this. And what they told me was, they don't actually care about the revenue bump, they almost sell them at cost on those products. What they care about is that the products that have extended warranty offers attached to them or offered on them actually convert better because consumers trust in those products more. So there's some really interesting consumer behavior and dynamics that we see there. And again, we don't charge for that incremental benefit. That's all net profit to the merchants themselves for added product sales. So those are really the business impact metrics that I'll share is sort of a top line, revenue bump as well as the increase in purchase conversion.

 

Aaron Conant  15:02

Awesome, so the next one that comes in is there, you know, your outline. So question comes in around categories that it's most effective in or ones that it doesn't work in. So people, you know, asking either side of the gamut, right? And then is there a the next one that comes in is around, is there a price point that is prime for? So we'll tackle those. And then I have another one that comes in as well. Just a reminder, yeah, everybody, if you'd rather, if you'd rather jump in hit star five, you can just keep emailing me aaron@bwgconnect.com, but thanks for the question.

 

Rohan Shah  15:34

Yeah, so I'll start with price point, because I think that goes across all categories. You know, I think traditionally, people have an expectation that it needs to be a few $1,000 product, or at least four or 500, for an extended warranty to be reasonable. You know, I think what we found, and we sort of came into this with similar sort of assumption. What we found is that because the extended warranties are priced on a relative basis for the product, retail price, as you go down in ASP on the product itself, you actually see similar conversion rates, because the price of the warranty becomes sort of a "why not" behavior, rather than Oh my god, this is an important purchase, I need to make sure it's protected. So we see 12% attach rates on $14 pairs of headphones, in many cases. So really, we go across a wide variety of bases, I will say the profit margin is typically the best once you get above the 75 to $80 price point, in most cases. On the category side, Aaron, you know, I mentioned a few, but let me pull up my list here. So traditional categories that people expect extended warranties to be offered on are things like consumer electronics, sports and fitness equipment, furniture, but what some of the categories where we've seen a lot of success also are in jewelry, bags, sunglasses, and accessories. Auto parts is a big segment for us where we really taken that industry by storm. So there's a number of other ones where we've seen a ton of success. And again, these are all margin, accretive pure profit programs for these retailers and brands, in many cases where it takes a few days or a few weeks to implement. And so it can be really impactful both from a bottom line experience, but also just to serve customers where today, you know, some of our partners, I won't mention names, but some of our partners had customers that would browse for a product on their website, and then go to Amazon to buy it because Amazon offered an extended warranty. So not only are they missing out on margin, because Amazon's gonna charge fees, but they're also missing out on those customers and the relationships that can generate from customers buying direct.

 

Aaron Conant  17:33

Awesome, love it. The next one is and I think you answered this a little bit, is it across the entire website? Or are you able to are people able to do a trial with say, I want to do a trial on two products or five products or, you know, 50 of my 1000 products? How does that work?

 

Rohan Shah  17:51

100%. So again, when we work with merchants, what we do is we basically map their catalog to extended warranties. And we have a business discussion with every single one of them around which parts of their catalog do they want to cover, we have some merchants that cover the entire catalog, but then run AB tests so that only 25 or 50% of their customers feel the extended warranty offers. And we have other merchants that choose specific parts of their catalog so that only 5, 10, 15, 20 products have an extended warranty offered. And all of that is configurable without any technical work from the merchant themselves. What I will say Aaron is we work with over 300 merchants today on the platform and that's growing about 10 new merchants every single week right now, we have never had a merchant that turns on our solution that doesn't either end up A rolling out to the rest of their catalog or rolling out to the rest of their customers. Or B that doesn't just start by rolling out to every single product right off the bat. Again, this is not a new product for consumers. Consumers are very used to getting these extended warranty offers on every other single large retailers website. And so there's no real ramp time to the behavior here. It's just consumers expecting or not expecting to see it through the checkout process.

 

Aaron Conant  19:01

And then are you able to so that's a question that comes around in store. And that's a lot of people are looking to capture a follow up. So a few brands that would have like, if you have an actual store, it's bought in the store, they go home, you shoot them an email, and they have and so are you able to offer this in store? And then how are you leveraging this, you know, are you able to leverage it for different marketing channels as a whole? I would love to hear those two topics.

 

Rohan Shah  19:28

Absolutely. So in store 100%. Like I mentioned, we work with both like Advanced Auto Parts where in-store is truly the primary portion of their business. So in store is definitely a bigger list, I would never tell someone otherwise. There are humans that we need to train. There's integrations in the POS system that we need to conduct but we have a ton of experience doing that. Those programs typically attach or the take rates for those programs are higher, because you have a human in the loop with a consultative sales process. And so in some of those cases, we see upwards of 25 to in some cases 50 To 60% attach rates depending on the product category. So in store can be really impactful if folks have a brick and mortar infrastructure. And then the other thing you mentioned there, and that I think is really important is different marketing or sales channels. You know, as I mentioned with some of the brands that we work with today, take an iRobot, for example, they sell the majority of their products through large retailers, Amazon, Costco, Walmart, Best Buy, etc. And so part of the discussion we had with them was how do we touch the consumers that are purchasing our product at other retailers and not from our website? So what we've done with them, which again, they have somewhat of a unique infrastructure. But what we've done with them is, they actually have an app that controls your little Roomba, Zuma device that runs around your home. And we've embedded extended warranty offers directly into the app experience. So as soon as you get home, even if you bought that product on Amazon, a notification fires up on your phone that says "Hey, Aaron, congrats on your new Roomba, make sure to get it protected from abrasive spills." And customers click that and are directed back to the website for other brands that do not have sort of a connected device experience, we also have post purchase registration experiences, where customers are driven to register their product through more digital means and digital channels, rather than just like a URL on a piece of paper in the box that enabled them to register and then add the extended warranty on the merchants website as well. Again, the take rates on those is lower than what you'll find during the checkout process itself. But it's a really great mechanism and conduit to generating a relationship with that customer that maybe didn't buy from you, but in the future might direct from your website.

 

Aaron Conant  21:35

No, I love it from the standpoint of you know, especially if it's bought on Amazon, or even it's bought on direct consumer site is tied to something like an app or they have to register it, the product, being able to ping them with the follow up, hey, by the way, you know, which is kind of you know, sometimes your outlay in cash, and they don't want to outlay more, but you know, a week later, the $10 or the $50 extra warranty sounds good once they have it in the house, and you can you can reach out to them that way. But you know, from the Amazon standpoint, especially like you're saying with Roomba, how do you get that customer data? Right? How do you bring them back in? It's a super cool way.

 

Rohan Shah  22:16

And how do you pull them into your marketing flywheel, right? Where you have a ton of other services and benefits that you can deliver to someone, when you have that relationship with them. I look at that as a relationship driver. And that's the start of the relationship. Because guess what, if you have a problem with your product, or if you have a question, you're now coming directly to the brand. And if you want to buy another product, guess what, you're probably coming back to the website to buy direct from them as well.

 

Aaron Conant  22:39

Yeah, how is this different from you know, other ones that are out there today is the next question that comes in, you know, how is the Extend experience different? Today, there's gonna, there's a lot of people sitting back saying, hey, like, this is super interesting, if it's that easy to install, you know, it's a viable option. You know, I mean, totally, you guys come to most you guys come to most recommended. That's why, you know, from brands and the network, that's how we select people, you know, for these calls as a whole. But, you know, we'd love to hear, you know, kind of, you know, explain, you know, the difference.

 

Rohan Shah  23:15

100%. You know, I mean? Look, extended warranties have been around a long time, Aaron. The incumbent companies in this industry and vertical today have been around for about 20 to 25 years. Now, they've built incredible businesses, and we have all the respect in the world for them. The issue that they have is they were never built with the lens of technology. So again, these massive retailers like Amazon and Best Buy and Costco and Walmart, literally had to build these programs, from soup to nuts internally with all of the operational and execution workflows, completely controlled by them. Truly what these companies did was they were a traditional insurance carrier, where they provided premiums or rates and said, you go figure out how to market and sell it to your customers, you go figure out how to transact, figure out where to price, figure out where to merchandise. And we'll just handle the claims on the back end completely separate from what we really noticed and identified is the experience that consumers expect today is always more integrated with the brand that they're buying the product from. And so we maintain our brand partners as part of that equation. And we have the technology stack that automates all of those operational workflows that I was mentioning. And so that's really the difference. And, and why we you know, in a few years have been so successful, is we can get these programs up fast, show, you know, value very, very quickly, and then serve customers in the way that they expect to be served, which ultimately is where I think the long term value from these programs truly comes from.

 

No, agreed. Is there, you know, can you talk a little bit more, you know, somebody asked about the customer experience as a whole you know, have you found that it's been, you know, more positive. Or, you know, I mean, it's just kind of I'm trying to reshape the question here, like the overall impact on the customer experience? Is it seamless? That's the other thing that people are worried about. Is it waiting on a website? Is it applied at checkout? You know, it's the customer experience. The next question comes in, is there any impact on website speed? These are all things that I think people are concerned about.

 

Totally. So I'll start with the website speed. So we do not today have any impact on website speed with our merchant partners, we leverage completely serverless architecture on our back end. So AWS Lambda for any of the nerds out there, but the completely serverless architecture and allows us to embed our scripts on the website, and basically lazy loads so that it doesn't impact any of the site speed, or negatively impact any conversion for merchants as well. So we've had zero merchants turn off our solution because of negative impacts to purchase conversion, or site speed for that matter. The other question you asked was around, remind me.

 

Aaron Conant  25:57

Customer experience, the flow on the website is this is this an ad at checkout? Or is this, you know, on the actual product detail page?

 

Rohan Shah  26:06

So we actually have three offers through the eCommerce checkout experience, all of which is configurable and customizable by the brand themselves. So we have a PDP offer, again, through our technology, it's just a sort of a JavaScript SDK that acts as a wrapper around our technology tools on the back end. This displays a product detail page offer that has a 123 in most cases, extended warranty offer for customers that they can select directly there. We also have a modal popup sort of like modal popup upsell opportunity. However, it's tied to the product itself. This is our highest converting offer. And again, no negative impacts purchase conversion that we've seen across any of our partners today for the modal pop up. And then we have a third offer on the cart page as well, which is a button that lives underneath the line item view that was added to the cart, where a customer can select that and add an extended warranty. Also, from there, we also do post purchase email remarketing. So we don't send emails, but we enable our partners to send remarketing emails to consumers. In most cases, we give them throughout the entire manufacturer warranty period, to upsell that consumer on an extended warranty. So again, opportunities to drive those customers back to the website. So from a customer experience perspective, it's completely embedded in the existing experience that you have. There's no switching screens, changing websites or having to pay on different providers. Everything is integrated into the existing merchant experience. On the back end, as we think about claims, this is really where we excel. So we have a, as I mentioned, an automated chat bot that's available 24/7 that administers over 90% of our 98% of our claims today, in less than 60 seconds. So we see some really interesting behavior there, which is the majority of claims through our chatbot are coming in between 7 pm and 11 pm. local time. Not surprisingly, Aaron, guess what people don't want to pick up the phone in the middle of the workday to call to a call center and file an extended warranty claim. So giving that customers flexibility where, look, some customers still want to pick up the phone and call, we have a call center based in Dallas, Texas, that has SLAs around pickup times in less than a minute, right? And customers go through that same experience through that channel as well. We also do it via email. So we really give customers the option on how they want to file a claim with sort of a digital channel being the overwhelming majority of customers today.

 

Aaron Conant  28:21

Awesome. Love it next. Everybody. Thanks for the questions keep sending them in Aaron, aaron@bwgconnect.com. For those, you know, kind of joining just you know here in the last few minutes have an awesome conversation with Rohan Shah over at Extend, an extended digital age, you know, we'll say extended warranty solution for direct consumer websites, but also available, you know, in store if you have stores as well. Just you know I have any questions, shoot them over super interesting space and a lot of people have questions about so we're hosting this event today. You know, the next question that comes in is around white labeling. Are you able to white label it and would love to hear your thoughts on that. And then have one more question after that that comes in.

 

Rohan Shah  29:05

Yeah. So you know, the overwhelming majority of our business today Aaron is not white labeled for two specific reasons. One, from a compliance perspective, there are a number of licenses and regulations that brands and merchants need to abide by, if they want to have a program that's branded themselves. It's not the end of the world to get this done. However it is a significant lift and something that needs to be taken into account to be under the proper compliance in the United States. And then the second is making it super crystal clear to consumers where they need to go to file a claim. So again, if you have a branded program where consumers don't need to know don't know where they need to go file a claim that does not create for a really consistent or seamless experience. That said we do have a couple programs in the market that are white labeled, specifically because the partners have products that are incredibly complex, that they want to run diagnostics and touch claims for. So in those situations, take a Peloton for example, there is a ton of latent knowledge that they have in terms of how they want to handle claims for those products. And we enable them through back office tooling to really handle those claims appropriately. And so in those situations, we have white labeled. However, like I said, it's not the it's not a significant use case today within our business

 

Aaron Conant  30:22

Awesome, what about the option of building in a product warranty to the price. So you have a large ticket item, right? And you don't want to then ask them to add on a product warranty at the end. I mean, you can but there's some people that say, "Hey, you know, we just want to build it in maybe it's just the offer, maybe it's, you know, a marketing event as a whole" You know, free warranty, are you able to do that?

 

Rohan Shah  30:51

We are. So the simple answer those answers, yes, there are nuances to how we stand up those programs, and not to bore anyone with the regulatory side of the business. But in the United States, customers need to have the option of not including it. And so if it's an included benefit, they need to be able to not include it and then basically have a discount for the value of what that protection plan or extended warranty would have cost. So we do have programs in the market where we've done that, it can sometimes be a little confusing for customers to be perfectly frank. However, what we also do on the flip side is have folks build our coverage into their limited warranty or manufacturer warranty, which we look at those as more of a shared risk program. So we can help underwrite and offload some of the actual risk exposure of including more coverage, you know, for furniture, for example, we cover rips, tears, spills, stains, etc, which are not covered by a manufacturer warranty. And so for those programs, we can build in, basically, so that we're covering the manufacturer warranty that's been included for our customers. So there are options that we can go through, we typically go through a spread around program design. With each of our partners, we really work together to figure out what is the best program for their customers as well as for the business.

 

Aaron Conant  32:05

Love it. The next question that comes in is around what if we have a manufacturer's warranty of one year, but we want to be able to offer year two and year three? How does that work?

 

Rohan Shah  32:16

Yes, so we--Great question. So we have two different programs that we offer today sort of off the shelf program. One is what we call sort of a traditional extended warranty. The majority of our partners today have a one year manufacturer warranty included on the product. In these cases, what that traditional extended warranty does is give customers the option to add a second, third or fourth year of coverage to that product. So in year one, the manufacturer is still responsible for any issues, mechanical or electrical defects for electronics, for example, in years, two, three and four, Extend is responsible for any issues that the customer faces. The second program that we have aired is what I call sort of our oopsie program. It's called an accidental damage from handling program. This is what covers, you know, Rohan being an idiot and dropping a stone all the time and having my screen crack. This is cracks, spills, drops, stains, pears, etc. for different types of products, those programs start on the date of purchase, or data fulfillment in some cases, and go above and beyond what the manufacturer warranty covers, which is why they run in parallel. So we can really again, customize what the merchant or manufacturer brand needs for their customers during the program design process. But those are sort of the two programs that we have enforced in the market today at scale.

 

Aaron Conant  33:30

Awesome. Love it. Are there other things that is your mind if others have questions, drop them in, there are other things that have come up that come up routinely with you that we haven't kind of touched base on today. New developments in this space would love to kind of pick your brain on that side, any new offerings, maybe for a different, you know, category, whether it is jewelry or something like that.

 

Rohan Shah  33:56

Yeah, I'm glad. I'm glad you asked. So you know, coming along with this, this big fundraising news today. Really the primary focus we have is twofold across the fundraise. The first of which is building up more and more resources internally to support the existing programs that we have in the market and the new merchants that were turning live every single week. So this means you know success managers pricing and analytics experts on Team 18 data scientists and machine learning experts today that focus on price optimization, offer optimization, as well as eCommerce merchandise optimization. And that's a free service to our merchants. Again, because we don't charge for our solution nor the services we only make money when customers buy an extended warranty. So really bolstering up the resources internally. And then also adding net new resources across our product and engineering teams to take some new products to market. And so really we look at those across a few different lenses. within specific product categories, Aaron, take jewelry for example. If a consumer is buying an engagement ring for their loved one, most people will actually add an action plan, we see high attach rates there. A lot of people will also look for something like loss and theft, which is different than an extended warranty or a protection plan. That's an insurance regulated product that is different than a service contract, which is what extended warranties are. However, we'll be launching those programs into the market later this year. There's other programs as well as think any other value added services around product protection, product insurance, and things like that. I'm being sensitive here, just talking, talking about our roadmap, I'm obviously more than happy to share a little bit more detail on a call with specific folks. But these are really more broad coverage protection programs. So think what traditionally has been included as sort of like a home warranty, but really making that accessible for consumers when they're buying the products that they love. So we have a broad electronics protection program that covers the key consumer electronics that are in your home, like your home audio system, or TV or tablets or laptops. We also have more appliance focused programs and furniture focused programs. So there's a number of new products and programs that we're taking to market all under the lens of we believe that ultimately loyalty is the business that we're in. And to drive loyalty for brands and retailers. What you need to offer consumers is the services that they are expecting or wanting around the products that they're buying. And we look at services as really the driver of that engagement, loyalty and ultimately higher LTE, right, which is the metric that a lot of our partners look at.

 

Aaron Conant  36:28

Awesome. Love it. You know, is there like what do you see in this space? Are there other things that are popping up? That are key for people who are looking at customer experience in. Then actually another question that comes in. What about the scenario where somebody uses a, you know, so product breaks, I'm gonna kind of summarize this. They use Extend, the warranty. Now they go back to the website, you know, is there, does the warranty continue? Do they repurchase the second warranty? Is it just fueling this flywheel?

 

Rohan Shah  37:06

Exactly right. Yeah, so for the majority of our products today, where we have replacement programs, it's a one time use warranty where we get the customer and net new product for their approved claim. When those customers come back to the website to repurchase or replace that broken product, we see over 50% of customers buying another extended warranty on to that replacement product. Over 50. So what you're noticing there is you have customers that are already in the cohort or segment of consumers that buy extended warranties and protection plans. And because they had this amazing experience, they want to buy another one for their new product. So we see that at a large scale. And it's really successful. For other programs that we have Aaron which are more like repair focus programs right from my couch in my living room here. If I got a stain on it, I'm not going to replace the entire couch just because of that stain will typically have it repaired through a cleaning kit or with an in-home technician. For those programs. Imagine I bought a $3,000 couch and it cost $200 for the repair, I'll still have $2800 remaining on my warranty balance. So it's not a one time use in those situations. It's a multi time use over the course of term of that protection plans lifecycle. So a little bit different for different programs that we operate. But that should give you a sense.

 

Aaron Conant  38:23

Yeah, no, that's awesome, because that was the next question that how is furniture handled. So that makes sense. And then you're keeping track of all of that on the back end?

 

Rohan Shah  38:31

100%. And we have a portal for customers so that they can look in and keep track of it as well. And then we work with some of the leading partners in the country for things like in home repair. So if your TV breaks, and it's a, you know, hopefully an 85 inch flat screen, we can actually get a technician out there to fix your TV at your home. In just a matter of days similar for something large like a couch, right or a dining table. We have technicians in our network that we can leverage to dispatch to consumers homes.

 

Aaron Conant  39:00

Yeah, so another one is just around, you know, monthly plans connected devices, you know, what you think about the new paradigm of how consumers are using their hardware and devices? Are you looking at that area as well?

 

Rohan Shah  39:16

100% we've actually already launched programs in the market, which is monthly product protection, rather than, you know, a single term product protection program. So instead of just buying a two year extended warranty on my device, why can't I pay for it on a monthly basis? Or maybe you have, you know, some software as a service services alongside the hardware itself? How do we layer on the extended warranty as another monthly add on, where I'm paying, you know, $9.99 a month instead of $250 down at the point of sale? So those are programs that we've already commercialized and built and actually launched as a pilot in the market and we'll be doing so at more scale later this year. But it's one of those other areas where a legacy protection plan provider, Aaron, just can't handle the billing infrastructure required for a program like that. And so that's where we've seen a lot of success as well. You know, I mentioned a few names that we work with Peloton and others, where a monthly program makes a ton of sense, as you think about content subscriptions and other things that they've already launched. So we're pretty excited about this program.

 

Aaron Conant  40:19

Awesome. Are there other things, I don't have other like questions that are coming in, like right now. But just a quick reminder, if people do have questions, don't hesitate to shoot them over to Aaron aaron@bwgconnect.com or hit star five. And we can bring them, we can bring you into the call right now. Other, you know, just, are there other things that are popping up as we kind of wrap it up here just a few minutes earlier than we usually do? But you know, want to make sure that we give people enough time to get onto their next meeting without being late. But you know, from your side, are there other key things that people should be aware of, you know, things that we need to tackle or prep that needs to be done? You know, a common question is how long does it take to roll something like this out?

 

Rohan Shah  41:06

Yeah, I mean, so from a rollout perspective, again, it's different for different merchants based on the architecture and makeup of their, you know, online or offline experiences. In most cases, we're seeing, you know, folks on Shopify get live in a matter of a few hours, a few days, where we're doing all of the work on our end, and they don't actually need to do anything. In other cases, more homegrown websites or enterprise brands, it'll definitely take a few weeks, and we integrate with the eCommerce and ERP pretty quickly from that perspective. So getting the programs up and running is super fast. And we can slot in and support with a number of folks on our team to really handhold folks through the process and make it easy for their teams. In terms of other things that people should think about. You know, Aaron, you and I talk about this quite a bit. But I think you know, where the world is moving today is to a couple of different areas within sort of the digital retail landscape. The first of which is value added services and loyalty is how do we completely touch different points along that consumers journey that isn't just the point of sale, ultimately, because that drives brand loyalty and engagement, Right? So think, you know, a pair of sunglasses, I sit on my sunglasses when I jump into an Uber all the time. That's a moment in time for me that I get worried about buying expensive sunglasses, so I don't, I sit at the 70 to $100 price range and I never go above that because I know my behavior. How do you incentivize someone like me to buy a more expensive pair, you think about some of those issues that they're going to have downstream. So that's really how we see the world. And, you know, we started and built our business today around extended warranties and protection plans. That's not where we're ending. We're really thinking through the full gamut of post purchase experiences that consumers have, and growing with a lot of our merchants by listening to them in the market and listening to their customers in the market to deploy those solutions. So really focusing on value added services and loyalty and how ultimately, that's going to be accomplished. We see a lot of folks who you know, are hesitant at first, but as soon as they get live and start seeing the customer reception, I get messages from folks at Logitech and JBL and Peloton and iRobot all the time, as well as a number of our furniture brands and auto part brands, where they're like, wow, we didn't realize the impact this program would have. And we're so glad we prioritized it across other things that were on our roadmap, because I know people are busy. And I know it's tough to prioritize things. But we do everything we can to help merchants out on that front.

 

Aaron Conant  43:26

Awesome. Well, I love it. I don't have other questions that have popped up in here. So then I think we can go ahead and kind of wrap up this call. I'd like to say thanks to everybody who dialed in today. Fantastic conversation. Thanks for all the questions. If anybody needs a follow up conversation 100% worth having that with Rohan and the team over at Extend. They're great friends, great partners of the network for us as a whole but also for tons of different brands that are in it. And just you know, all around positive experience. So with that, I think, you know, we're gonna go ahead and more than happy to connect you. It's worth that time. And we're gonna go ahead and wrap it up early here today. Hope everybody has a fantastic Tuesday. Have a great rest of the week. Rohan, thanks again for your time. Always fun having this conversation with you, everybody, stay safe, take care and look forward to having you on a future event. Awesome. Thanks again. Take care.

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