SquareTrade Taps Mullen to Make Warranties a Sexy Consumer Product
Can warranties be a sexy consumer product? Mullen's San Francisco office has been charged with making them one.
Despite landing a $238 million investment from Bain Capital and Bain Capital Ventures last year, consumer warranty provider SquareTrade is far from a household name, even in the tech world, but it wants to be. Its new agency-of-record Mullen will be tasked with getting the brand on consumers' radar and, on a more fundamental level, with recasting the experience of activating a warranty as a positive interaction with a customer service representative instead of an adversarial one.
"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.