Extended warranty service "proteger" that makes users say "There is no reason not to install it!"

Proteger, an extended warranty service for products sold on EC. It is said that there is even a company that has achieved a CVR increase of 120% by introducing it. Mr. Kota Nojiri, Representative Director and CEO of Kiva Co., Ltd., which provides proteger, and Ace Co., Ltd., a bag manufacturer who has already introduced proteger and feels a great response to this service We interviewed Mr. Hiroshi Kitayama, Deputy General Manager of the three divisions.

Extended warranty service "proteger"

--What kind of service is proteger? Nojiri: This is a service that allows e-commerce sites to offer extended warranties. Guarantees like Apple Care can be incorporated into EC in an outsourced fashion. ――Apple Care is a service that replaces products free of charge when they are broken or defective. Nojiri: That's right. It's a service that replaces and repairs. At proteger, we will guarantee it in the form of exchanging it for a new product. When proteger is installed, a button to select additional guarantees will be displayed on the cart screen. Suppose a customer purchases an extended warranty and the suitcase breaks after a year and a half. You can then submit your warranty claim by entering your warranty number and email address into our chatbot. Of course, you can also make a warranty claim by phone or email. If there is a warranty application, our customer support will issue a replacement request to the EC business operator on the management screen, and we will handle the replacement. ――For example, if an item worth 10,000 yen breaks down, you will be sent a replacement item worth 10,000 yen to the customer. ? Nojiri: Kiva will cover the cost of the guaranteed product. We will invoice you for the difference from that month's guarantee fee. This is a new exchange flow that is currently supported only by Shopify, but after receiving a warranty claim, we issue a Shopify coupon code for the retail price to the customer. When the customer presses the sent link, they will jump to the payment screen of the EC site and complete the exchange in the same flow as when purchasing on the EC site. Such functions are now in operation at several companies. E-commerce businesses do not need to take any special action for exchange, and it is possible to have it sent from the sales inventory of the warehouse.

Unlikely extended warranty service

--I don't think such an extended warranty service was likely in EC. Nojiri: Yes. In the current situation, if it becomes an alternative to proteger, I think it will be a contract with an insurance company. However, most insurance companies have dealt with large companies. And in the product category, home appliances, etc. There has always been demand, but the target audience was very narrow. However, many of the people who have needs for extended warranties are still growing e-commerce businesses. However, insurance companies do not take risks against such business operators. So, most of the business operators are currently unable to deal with the insurance company even if they try to use the extended warranty. Kitayama: Customers constantly ask me, "Does this product come with a warranty?" I couldn't However, by using proteger this time, you can also ask for peace of mind. I think this is a service that our customers will be very pleased with. ――Will it take time and money to introduce proteger? Nojiri: If you use Shopify, you can install it in as little as the same day. With the extended warranty packaged as Shopify's app, getting started is super easy. In addition, there are no introduction costs and no operating costs. ――When you say “free,” do you mean that it is operated only with the guarantee fee paid by the customer? Nojiri: That's right. We operate solely on guarantee fees paid by end-users. There is no cost to be borne by the EC business operator who introduces it. Kitayama: That's why I recommend other e-commerce businesses that there is no reason not to enter. It's free and there are no particular inconveniences, so I don't think I'll switch to another service. There are some services that you can add but you can't use at all. I can't use it, and I'm going to cancel it in 1 years. Proteger is not like that. All we have to do is install the app.

No need for tuning after installation, you can continue to use it without touching it

--Please tell us your frank impression when you first learned about proteger. Kitayama: I feel like I'm already here. If you actually try to realize the extended warranty other than proteger, you will have to partner with an insurance company. Determine the insurance premium for each product, then register the product that supports the warranty, move to the management screen, and calculate the cost for each product, including what to do when a claim is made, who will operate it. To go. Considering the time and effort involved, it was not realistic. With proteger, all you have to do is install the app and import the CSV, so if you are an EC operator and have even the slightest request from a customer, you should introduce this service. Nojiri: Unlike insurance companies, proteger is managed by a system, so we can have variations in the warranty period. For one product, we offer both a 1-year warranty and a 2-year warranty, allowing customers to choose. Since each customer uses the product differently, the required warranty period also differs. Being able to handle that is a big advantage of proteger. ――Did you need to make individual settings after the first installation? Kitayama: Not at all. There is really no burden on the operator side. For example, even if there are many requests for guarantees for replacement of a specific product, the EC business operator will not take any special action. Nojiri: This is something we can do because of the system, but when the guarantee application rate rises, an alert will automatically come up and the guarantee fee will be raised. Kitayama: Therefore, there is no need for the EC side to tell customers that insurance premiums will go up. The revised warranty fee will be presented at the time the price is displayed, so the customer just looks at it and decides whether or not to add an extended warranty. --I see, that's easy. Kitayama: Since we introduced proteger, we have not received any questions such as "Does this product have a warranty?" If you want to buy a product, you will see two proteger buttons next to the cart button: 1 year warranty and 2 year warranty. Seeing this, customers came to understand that "warranties are something you buy yourself."

proteger is suitable for the following products

-Are there any products that are difficult to introduce? Nojiri: We have not fully covered the food and apparel industries, but we have begun to provide a guarantee for shoes. I think we can improve here. ――Is there a product price range where proteger is effective? Nojiri: I think proteger's extended warranty service works best for products priced between 10,000 and 30,000 yen. In this price range, you can get a warranty for a few thousand yen, so it's easy for consumers to get an additional warranty. While analyzing the current situation, the most compatible home appliances are 10,000 to 30,000 yen. I feel that the fact that a culture of guarantees has taken root is a big factor. For example, at a company that handles smartwatches, 40-50% of all purchasers purchase extended warranties.

Improve Customer Satisfaction at No Cost

--You said that you now handle warranty for shoes. Was it? Nojiri: There seems to have been a need for repairs, such as hydrolysis. However, the shop could not handle it, so he only guided the repair shop. Even if you replace it, you can't quite take the risk on your own. For that reason, we have introduced it to a company that originally felt the need. The heels of pumps can also break. As a customer, the frustration is accumulating, so I sometimes receive complaints such as "I will never buy it again." However, we can respond by saying, "We will replace it immediately." Shoe exchange services are gaining popularity in the United States, but we aim to improve the customer experience by “immediate exchange”. Of course, it's cheaper to repair, but I think the big difference is that by daring to replace it there, we increase the value of the experience and encourage customers to choose that brand. Kitayama: I think the customer experience there is the crossroads between whether LTV will stop or not. When a problem occurs, if you improve the customer experience, they will say, "That's ACE, isn't it?" Then, wouldn't you say, "Would you like to buy the next one?" However, if you replace this with your own money, the cost will rise. Therefore, using proteger can improve the customer experience and cost less. If you think so, I think there's no way not to use it anymore. ――It is full of good things for EC business operators. Kitayama: When we set up our own customer center, we would get a phone call with complaints in the very first thing in the morning. Just getting rid of this stress will make you feel very comfortable, and you can also reduce the time involved. Instead of negative work, time can be devoted to positive work such as attracting customers, and the entire business runs in a virtuous cycle. Considering that, I think this is already an essential service.

Future Prospects

-How do you plan to promote extended warranties in the future? Nojiri: Nowadays, credit card payments are taken for granted. Without it, users will leave. I would like to make extended warranties as commonplace as credit card payments. ――The area around payments is an area that has a lot to do with conversions. It's like the last push. Nojiri: There is an example of a smartwatch company improving CVR by about 120%. The company is based in Singapore, and although the products are good, they are not yet well known. Under such circumstances, I think that the fact that a third-party company provides a guarantee has eased the barriers to new purchases. This is another advantage of the extended warranty. ――Proteger knows how many exchange requests are coming, so you can understand that "this company's products are safe". Nojiri: Yes. In addition, data on what kind of event caused the failure is also useful for business operators. There are companies that have return rate data, but few companies have detailed failure rate data. Even major manufacturers only guarantee one year, so it's impossible to follow up on whether it's broken two years later. In that respect, we will continue to work with you on a long-term basis. When we receive a warranty application, we will listen to the details of how the failure occurred and tell the business operator. For business operators who want broken products, we will also hand over the actual product, so it is possible to improve quality by providing feedback to the factory saying, "Please improve this part." Regarding here, I think that it will be enhanced if more warranty applications come. ――Is there anything that ACE would like to ask proteger in the future? Kitayama: I am very satisfied with the function itself. After that, if the number of member stores increases, the number of users increases, and the overall insurance premiums decrease further, it will become easier for customers to use it. As I have said many times, this is a service that does not pose any risk to the EC business operator. There is no reason not to enter. I think that shops that do not introduce proteger do not know about proteger or are hesitant to use the startup service. However, when e-commerce businesses try to do new things or provide better services to their customers, there are times when they have no choice but to use startups. It may be a little risky, but just because it's a big company doesn't mean it's perfect. There is no such thing as absolutely no risk. I always recommend everyone to take the plunge and give it a try. It will be a differentiator and will definitely be an indispensable tool in the future.