Unravelling the jargon could boost warranty revenue

Research of car owners by Allianz Worldwide Partners UK, reveals that a lack of understanding of what warranties do and don’t cover – and technical jargon – can get in the way of a purchase decision.

Although the majority of consumers asked by Allianz Worldwide Partners understood that essential components are covered by a warranty, a surprising number thought paintwork, windscreen wiper blades and upholstery were also covered. Liz Grindell, Head of Warranty at Allianz Worldwide Partners UK explains: “Our research confirms that 45% of motorists are still unsure about what’s exactly covered by a warranty offering, and this lack of understanding reduces their likelihood to buy. Simply put, it’s important to assist customers’ understanding of a warranty to help them decide if it’s right for them.

“This is backed by analysis of consumer activity on our online warranty sales platforms. Visitors prefer ‘what’s covered’ tables, FAQs and jargon busting glossaries over paragraphs of detailed text. And it’s important to note that customers like to be provided with this type of information when interacting directly with dealers.”

Findings of the Allianz Worldwide Partners research of over 500 consumers also reported that 36% of motorists said that “clear and easy to understand policy wording” may influence their decision to purchase a warranty. And when it comes to how information is communicated, 37% would prefer an email that contained facts, figures and frequently asked questions and 31% would prefer a basic letter that included a web site address where they could find out the information they wanted about the warranty offering.

The research also focussed on understanding barriers to purchase, with the key reason being cited as a preference to deal with problems as and when they happen (45%), suggesting a lack of understanding by motorists of the financial planning and savings benefits that a warranty can bring in the event of an unexpected vehicle fault.

Concludes Liz Grindell; “When creating marketing strategies we endeavour to put ourselves in the customer’s shoes. What would they want to see to help them make warranty decision? A great litmus test is to ask non-motor industry friends and family to review a warranty wording. Crucially ditch the technical speak and the jargon.”