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How Product Protection Increases Customer LTV and Drives Loyalty


Clyde exists for two reasons: to help merchants deliver incredible ownership experiences to their customers, while empowering those same customers to extract the full value of every item they purchase. Both of these objectives are achieved through product protection.

What is product protection?

Clyde product protection comes in a few forms:

1. Extended warranties - They start when the manufacturer warranty expires and then extend the coverage of mechanical or electrical malfunctions for a specified time. These plans are backed by insurance companies, not the manufacturer. 

2. Protection plans - Coverage for specified damages or accidents. A common plan is the accidental damage from handling (ADH), which covers damage caused by accidents like drops, breaks and spills. Think Applecare. 

How does offering product protection help me increase the value of my customer?

Profit margins are becoming thinner for eCommerce merchants, especially in categories like electronics and appliances where everyone is shopping around for the lowest possible price. Offering a protection plan with these purchases increases your order value with little to no overhead. These plans are the highest margin SKU many of our merchants sell. Retailers who offer extended warranties through Clyde see average purchase orders increase by 11%.


8 Upselling Examples and Tips that Increase Order Values

The presence of an extended warranty offering can also act as a badge of trust on your products and give consumers the additional peace of mind they need to purchase a high price item. Assurant found that extended warranties, on average, increase a consumer’s intent to buy by about 25%. This increased trust can lead to increased conversion rates and create a loyal customer who knows your company has made it a priority to be there for them when they need you most -- if something goes wrong.  

“With third-party marketplaces like Amazon and Walmart, as well as big box retailers like Target for example, offering up product protection on eligible products, we’ve seen an increase in the expectation that consumers have of brands. A few years ago, product protection and warranties were a ‘nice to have’ to stay competitive, but now they’re a ‘need to have’ if merchants want to compete with the major players on the market,” says Chloe Fisher, Director of Agency Partnerships at Clyde.

Now that you’ve acquired these customers and optimized their average order value, how do you keep them coming back?

One challenge faced by retailers is the cost to acquire new customers (CAC), especially with the new data rules in place. That’s why it's more important than ever to know your customers who purchase from third party channels (e.g. Amazon) and to provide an exceptional D2C customer experience. 

In order to provide a seamless customer experience from start to finish, you need to prioritize customer service and provide a positive claims experience. The same thoughtful attention you put into a frictionless purchase process should be mirrored in your claims process. Clyde’s digital first process allows your customers to access their product purchase history and warranty information, all in plain English, and lets them file a claim directly - no printing, no receipts, no mailing things in, and all with real-time updates.


‍“Good research tells us that one in every three customers would leave a brand they love after just one negative experience ,” says Fisher. “Furthermore, 92% of customers would completely abandon a brand after two or three negative experiences. When we think about the products we love and use regularly, none of us want those products to break. But we’re human- accidents happen. We have kids who throw remote controls at our new flatscreen or we spill coffee on our laptop. It’s not that the product is bad, it’s that the user is human. But it’s in these moments, where something breaks or goes wrong, that we have the power to either win or lose that customer for life. If we can provide a customer with a positive, tailored claims experience and leave them with positive feelings about our brand, we’re able to recover the cost of actually acquiring that customer in the first place”.

No matter what happens with the product, this interaction creates a positive experience and creates another meaningful touch point between you and your customers, building their brand loyalty and putting you top of mind when it’s time to make another purchase. 

Once you have these people in your marketable database you can continue communicating with them, building out customer groups and advertising products that might be of interest to them. 

In addition to driving passive revenue and generating happy repeat customers you can also use the data on protection plan sales, available in your Clyde dashboard, to help drive improvements in marketing, product development, customer service, and pretty much every other part of your company.