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"We're kind of like the Zappos of warranties," said
SquareTrade's CMO Ty Shay, who observed that the company is looking
to differentiate itself with customer service instead of lower
prices. The company's call center is located in its San Francisco
office and has a staff of 60 out of 200 total SquareTrade
employees.
SquareTrade was founded in 1999 and started off as an
intermediary for buyer and seller dispute resolution for eBay. It
pivoted toward its current model in 2005 and began offering
warranties for consumer electronics on its website. In 2010, it
signed up its first big retail partner, Costco, which offers
SquareTrade's warranties in store at the point of sale.
Historically warranties are purchased through the retailer and
then serviced through a third party, like NEW and Asurion, which
specializes in mobile devices. But the reason warranty provisioners
are so detested is that those companies aren't consumer-facing and
thus have no incentive to provide good service or to fulfill
claims, Mr. Shay said.
"Generally there are no brands in the category," he said.
SquareTrade now has several high-profile retailers it works
directly with, including Amazon, Panasonic, Vizio, Tiger Direct
and Tesco. But it can also cover products bought from retailers it
doesn't have a relationship with, like Apple and Best Buy, through warranties
purchased on its website.
The company says it has 5 million active warranty holders
covering $2.8 billion worth of electronics, but the massive amount
of capital it's raised speaks to grander ambitions. To become a
brand known and then actively sought out by consumers, it will need
more visibility through in-store displays in retail partners like
Costco. It also wanted an ad campaign, though it remains to be seen
what form that might take.
"We're going to be very experimental," said Mr. Shay. He noted
that Mullen's pitch included TV and radio ads, as well as playful
point-of-purchase displays featuring toilets with smartphones
dropped into them. (The idea was to highlight the inevitability of
accidental damage to phones.)
Mullen's chief strategy officer Kristen Cavallo said that the
pitch tried to focus on the "human truths of clumsiness" instead of
the granular details of how warranties work.
"We knew the work had to be pretty buzz-generating and we had to
think beyond television," she said.
