Q & A with Nate Baldwin, CEO of After, Inc.

by | Mar 20, 2018

Published on March 20th, 2018

Nathan Baldwin, CEO of After, Inc.  We did a brief Q. & A. session below:

Q.  You have been in the analytics and marketing industry for over a decade.  What are the key trends that you’ve seen that have shaped the warranty industry today?

A.  In recent years, analytical technologies and new large data sets have dramatically changed the warranty industry.  The ability to organize large unstructured data has changed the way warranties are marketed, underwritten and administered.  The early generations of these tools were mainly used to optimize each part of the warranty chain, but today, they are being leveraged to increase customer satisfaction and provide greater customer satisfaction to the products and services being warranted.

Q.  One of After, Inc.’s strengths has always been in research and analytics.  Will this expertise continue to be critical to creating and implementing successful warranty and service contract programs?

A.  Our analytical heritage has always provided us a unique advantage in the warranty industry, and I can’t see us moving away from it anytime soon.  Most in the industry have a perception that warranty analytics is a software tool or hiring a business analyst to look at data.  But for After, Inc., it’s the foundation of everything we do.  We continue to build our knowledge across many different industries with the largest team of specialized statisticians and research assets in the industry.   We include our analytics teams in every marketing, risk, and administration decision to find business insight, new opportunities and efficiency.

Q.  We understand that After, Inc. has developed with Seagate a breakthrough product in data recovery.  How was this developed and what has been the impact?  

A.  What a great story.  It’s rare you get to work on something so different and unique in your career.

It originally began as a request to solve a Seagate customer satisfaction issue for customers who experienced data loss on a Seagate hard drive.  When a hard drive fails or is damaged, a physical recovery in a laboratory with a trained technician is often the only way to recover the lost data.   As you might imagine, the cost for a technician to take apart a hard drive, develop proprietary tools and transfer binary data from broken media to new media can be a very expensive proposition to a consumer – in the thousands of dollars in some cases.   Seagate needed a solution to reduce the expensive point of need recovery and make the service affordable for all customers.

After a few meetings, we realized this could be achieved by pooling the cost of recovering the data for the consumers that needed the service across a larger customer base at risk of those potentially needing the service. As a result, the Rescue plan was born.

We conducted research to find price points, likely objections, key benefits, etc.  One of the most interesting findings showed us that people with the most sophisticated data back-ups were the most likely to purchase Rescue for added protection.

The product was launched to Seagate consumers to start and won the “Innovation in Warranty” award from the GWSCA in 2013.  After gathering additional insight on the product, we expanded the types of devices and media we recovered from, and then increased distribution to manufacturers, distributers, retailers and subsequently offered it direct to consumer.

Today, we’re proud to say that Rescue has solved a real issue within the warranty industry for digital devices.   For most consumers, the data stored on the devices is more valuable to them than the device itself.  As we continue to expand the product to new markets and bundle it with other standard warranty protections, the feedback we have received from consumers that have recovered family and baby pictures returned is the most rewarding thing I’ve ever experienced in my career.

Q.  On the cost control side, what do you see as the emerging trends?  Has fraud detection and control become critical for your clients?

A.  Yes, cost control and cost outliers (we don’t say fraud) insights have become increasingly important with new tools and statistical methodologies that can detect anomalies.  Since the beginning of warranty, outliers and anomalies were always a normal part of the business and the price of such things were passed on to the larger customer base.  But as we get smarter about detection and processes to reduce the activity, more clients are interested in passing the savings back to the consumers and lowering product and warranty product prices.

Q.  How do you see predictive technology impacting the industry?

A.  We use predictive methodology in every part of the warranty chain.  I think it is impossible to run an effective and profitable program without predictive analytics today.  For marketing, we predict the likelihood a customer will purchase a warranty product to reduce the acquisition cost and improve targeting for customer satisfaction.

For measurement of the warranty risk associated with claims, we predict the likelihood of a claim, the likelihood of when a claim may occur, and the future cost of the claim based on predicted labor and parts cost.  Predicting the claim risk and the claim cost accurately is a critical part of the warranty price and viability.  Many people overlook how important it is to get the predicted cost right to enable wider adoption of the product.   For administration of the warranty, we use predictive methodologies to adjust inbound scripts based on consumer response, we use it to detect anomalies in claim entitlement, and we use it to auto-entitle to reduce costs for repetitive claims.

Q.  There has been an upsurge of mergers and acquisitions in the warranty and service contract industry over the past six months. What’s driving these transactions?

A.  Yes, there has been a definite uptick.   As traditional insurance markets come under stress from new technologies like self-driving cars and new players like Amazon entering the insurance market, many in the industry are looking at specialty insurance companies for new revenues.  Warranty has long been misunderstood and overlooked by many of the traditional insurance companies.   The Warranty industry is still highly fragmented with companies specializing in individual sectors of the warranty chain – but my guess is you will see a greater consolidation over the next few years.

Q. Will this consolidation be healthy for the warranty and services industry?

A.  I think it will be.  In the end, warranty products are important to protect consumers from product defects and for manufactures to ensure high consumer satisfaction and consumer loyalty.  My sense is consolidation will improve the perceptions of the warranty industry, create better consumer awareness and improve distribution to more homes and businesses.

 

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