Polaris Industries wins the Excellence in Service Contracts Award at the GWSCA
After, Inc. is proud and excited to announce that Polaris Industries was recognized with the Excellence in Service Contracts Award on September 22nd at the GWSCA (Global Warranty and Service Contract Association) Conference held in Chicago. The GWSCA Conference is an industry event focused on the warranty and service contract management space.
Polaris Industries and After, Inc. have a long history of mutually beneficial business practices, and have built a strong, symbiotic relationship that has helped both companies outperform their expectations. Headquartered in Minneapolis, with annual sales of $4.5 billion and over 8,000 employees in 16 countries, Polaris Industries is a recognized leader in the power sports industry. Polaris designs, engineers and manufactures innovative, high quality off-road vehicles — and then markets through an extensive network of dealerships. Their Extended Warranty business, run by their Finance organization, is a critical source of revenue and profits — and in many cases, their only direct connection to their end customer.
Founded in 2005 as a subsidiary of Fulcrum Analytics, After Inc. was formally created in 2015 to offer the most advanced warranty products and services our industry has ever seen. As an independent partner, and leveraging our dual expertise in data analytics and consumer marketing, we go shoulder-to-shoulder with our clients to establish world-class post-sale businesses.
The Polaris warranty marketing team, led by Director of Financial Services Kelly Clawson, faced a four-fold challenge in achieving their aggressive growth targets.
- First, their point-of-sale conversion rate on extended warranties was low – due mainly to a lack of customer awareness and education around the program benefits and values.
- Second, it was difficult to train their large network of dealers on how to effectively sell the program – even their own dealers struggled to prioritize extended warranty education.
- Third, their team knew that there was much room to improve on their existing after-market postcard program, but felt they didn’t have the necessary time or consumer marketing expertise to evolve the program.
- Fourth, the Polaris team believed that they could avoid a large rate increase proposed by their underwriter, and actually reduce rates and take control of their program if they better understood the program risks, administration needs, and cost structures.
Clawson’s team reached out to After, Inc. to help transform their program into a best-in-class marketing operation that could quickly ramp up to achieve their revenue, profit, and customer experience goals. The action items revolved around: limited customer awareness of extended warranty product and benefits; insufficient POS staff training and priority on selling extended warranty products; low converting after-market postcard campaigns; and limited finance team resources, time, and service contract marketing expertise.
After, Inc. asks our clients to take a “leap of faith” with us – one that we’re willing to sign up for ourselves. In stark contrast with other companies, After, Inc. provides a true bottom-line profit-share model for our clients. This arrangement puts the risk on After, Inc’s shoulders and incentivizes After, Inc. to make programs work for our clients. A typical fee for service approach would incur a large bill-back for all support – regardless of the success of the program. After, Inc. is confident in taking on this risk by doing a joint pro forma analysis to determine the expected costs, revenue, and profits. After, Inc. is experienced in all areas of service contract management and marketing, and builds a coordinated, multi-channel marketing operation that is custom-tuned for each specific client. Advanced statistical models, using both internal and external variables, are built at the customer/product level – driving customer specific timing, messaging, and channel strategies. The latest technologies are deployed on all web, mobile, and call center based assets, giving customers several options on payments, methods of communication, FAQs, etc. All marketing is personalized and each customer is presented with a personal URL and their own specific landing pages if they choose to communicate via web or mobile.
Even as some prospects are skeptical of this “too good to be true” approach, Polaris Industries was willing to take the leap with After, Inc., and our partnership has been successful for both of us.
Polaris Industries and After, Inc. have worked tirelessly to make this partnership a success, with Polaris taking the position of treating After, Inc. as an extension of their team rather than a ‘vendor’. The first phase focused strictly on after-market sales and overhauling the direct marketing program.
Within months, they transformed the single-postcard marketing effort into an intelligent, data-driven, self-updating system that generated a marketing-ready customer list; established an outreach strategy and budget per customer based on the customer’s predicted lifetime value; leveraged a multi-channel marketing approach to create awareness to customers across mail, email, call center, web and mobile; and implemented a state-of-the-art ecommerce infrastructure that took the friction out of the customer response process.
No matter which channel a customer chooses to respond, they were met with personalized interfaces and information and quick, convenient enrollment mechanisms. The bulk of the work was performed by After, Inc., focusing the Polaris team’s limited time on key decisions and inputs. Focal points included: organize and enhance the customer list; run predictive analytics to set marketing strategy and budget per customer; launch intelligent multi-channel marketing; and test, optimize and manage ROI to the penny.
Within 3 months of launching Phase 1, after-market conversion had almost doubled, and the investment had already paid for itself. As continuous improvements were made in the post-launch testing and optimization phase, conversion rates achieved a 130% improvement to the baseline. Revenues continue to compound every quarter, driving a high-contributing annuity business for the team. Customer satisfaction scores have also improved, as a reflection of the increased sense of knowledge and security that extended warranty protection provides.
- After the launch of Phase 1, accurate warranty analytics were deployed to provide an accurate analysis of extended warranty cost per unit for each product category, coverage term/type, etc. This analysis directly led to several program implementations – leading to further improvements in all areas of program performance.
- Eliminated a substantial rate increase
- Polaris moved administration entirely in-house
- Program term/offer expansions
- Price optimization to ensure competitive pricing, great customer value, and improved dealer participation
- A new risk road map was developed and followed, resulting in a pragmatic change in risk structure with significant improvements in costs and control – all while maintaining accurate oversight to ensure accurate ongoing optimization strategies.
Polaris and After, Inc. continue to improve the program on a monthly basis, achieving multi-million dollar annual increases in both revenues and profits. In reviewing the Polaris Industries Warranty Program, they have achieved:
- Increased aftermarket conversion rate by130%
- Grew service customers by 200%+
- Increased revenue by over 250%
- Raised customer satisfaction scores.
- Have achieved more than a 50% increase in dealer penetration at POS
- Increased dealer participation levels to all time highs, and continues to climb
- Revenues continue to compound every quarter
- A substantial rate increase was eliminated
- Moved to a new risk structure with much lower costs
- Program administration has been moved entirely in-house
- Both revenues and profits achieving multi-million dollar increases
In conclusion, Polaris Industries and After, Inc. have defined what it means to have a strong business partnership. After, Inc. has become a trusted advisor with their warranty program, and has helped Polaris Industries with ongoing analytics and decision making information, allowing them to move to underwriting their own programs, saving significant ongoing costs. Together, we are also looking at warranty administration software, price optimization for after-market products and audit support for ongoing underwriting.
“Our partnership with After, Inc. has become one of the fastest and most visible ROI drivers I’ve seen. The ongoing collaboration has been incredibly satisfying and a huge win for our internal teams.”
—Kelly Clawson, Director of Financial Services at Polaris Industries
http://www.warrantyweek.com/newsroom/releases/20160922-gwsca.pdf
See photo: William Sinclair, Extended Warranty Analyst for Polaris Industries (right) alongside Paul Swenson, EVP Business Development for After, Inc. (left).
