Extending Customer Service

Warranties are gaining teeth in the boating industry, those that cover new products and others that add or extend protection on pre-owned products. It’s becoming more common to see five years of warranty coverage on newly purchased outboard engines and some hulls. Longer coverage is a boon to buyers and a plus for the overall industry since many consumers are accustomed to getting five-year or 100,000-mile warranties on their cars. This should raise boat prospects’ comfort levels when they are considering buying.
Marine dealers sell extended warranties, also known as service contracts, as a function of the F&I department for several reasons. They are a source of profit beyond the sale. They can help in recovering service costs that might not be totally covered by the new product manufacturer. And, when they work as promised, customers are taken care of without having to dig deep into pockets to cover a product flaw or repair and will end up being more satisfied with the overall ownership experience.
That final point is integral to growing boating. Though there are few hard figures on consumer experience with extended warranties, J.D. Power & Associates does track manufacturer warranty satisfaction. Since 2002 when marine tracking began, warranty satisfaction has improved, but it has a long way to go to catch up to other industries: boating is running in the low “7s,” motorcycles at “8” and autos about “mid-8s” (see chart).
Notes Todd Markusic, director of J.D. Power’s marine unit, “The best warranties are the ones that are used the least, which correlates to higher quality in the product. So it’s not just a matter of arbitrarily extending a warranty from one year to two or more. When the owner does come in for regular service or warranty work, he or she bases satisfaction on treatment by service personnel, how quickly the repair is made, and ultimately, if the repair solves the problem on the first visit. The auto industry has been addressing and improving these service factors for a long time and achieved fairly high success. The boating industry should strive for these auto industry benchmarks.”
What the public is reading about service contracts is confusing. Consumer Reports tells visitors to their Web site to “just say no” to extended warranties with few exceptions. In response, the Service Contract Industry Council ran advertising prior to last year’s holiday season citing a Consumer Reports survey indicating “23 out of 25 product types tested had double-digit failure rates and needed repair within three to four years.” SCIC said an extended service plan, “Increases the value and enjoyment you’ll get out of the product you’ve bought … saves you time and hassle and anxiety in the event something does go wrong.”
Of course, not all service contract providers are created equal, so it’s important that businesses choosing them do their homework.
“Unlike the auto industry where dozens and dozens of warranty companies exist, very few exist in marine,” says Jamie Gaskins, president of SeaSafe Group. “The auto industry has had its share of problems with companies under reserving and going out of business, leaving the dealers and customers hanging. Manufacturers and dealers need to recognize that you get exactly what you pay for, especially when the time comes to pay claims in years four and five. Look to the best individuals in these fields for advice and consultation before entering into an agreement,”
Consumers will likely also equate warranty coverage on their boats to their cars, and there is inherent danger here. “Warranty trends within the marine industry tend to float all manufacturers equally, both the innovators and the wannabes,” says Caroline Ajootian, BoatU.S. Consumer Protection Bureau director. “What the Cobalts and Tiaras offer spills over to the lesser makes. Consumers, particularly those who are new to the game, tend to assume that everyone offers pretty much equal coverage and has equally good intentions. It’s unfortunate and inaccurate, but the buying public still makes the comparison with the auto industry.”
Bottom line: warranty, original or extended, is as good as the original product is made and capability of the repair shop that stands behind that product and any service contract written. Going forward, certification, both in service repair and in certifying “pre-owned” boats will play decisive roles in boosting consumer satisfaction in all of this.