CPAP equipment sanitizing device maker SoClean, which took its brand profile to warp speed in 2019 with a testimonial style TV ad featuring William Shatner, is partnering with Extend to offer extended warranty programs.
Extend, whose application programming interface (API) gives midsize and smaller brands the ability to offer extended warranty programs, raised $16.4 million in new capital last fall and acquired assets from Aon affiliate Affinity Insurance Services to fuel its growth in a warranty segment projected to be worth $50.2 billion by 2026.
“Before Extend, extended warranties were only accessible to the top 1% of merchants and often had a negative reputation with consumers, which left a huge portion of the market unable or unwilling to offer protection plans,” Extend CEO Woodrow Levin explained, citing major retailers such as Amazon, Apple, Costco and Best Buy, and Wayfair.
“The SoClean 2 product for us has taken off extremely well, especially after the TV ads,” SoClean CIO Keith Brown said on a joint call with Levin. At the moment, however, SoClean’s sales and growth are based on that single primary product, which cleans and sanitizes CPAP equipment without water and without the equipment being disassembled.
“We were looking, and still are, for additional products,” Brown explained. The quest to extend the product line, combined with a request on customers’ wish lists, inspired the partnership with Extend and launch of the extended warranty program in November 2019.
The cost of CPAP machines are typically paid by insurers and the machines are generally replaced after five years. The SoClean 2 comes with a two-year limited warranty. “Covering past the two-year manufacturer’s warranty would be another great product,” Brown said of the thinking behind SoClean offering a three-year extended warranty.
To have a SoClean replacement warranty aligned with the lifespan of a CPAP machine was “part of the customers’ wish list,” he said. Customers also have the option to buy a one- or two-year extended warranty. Extend offers the extended warranties thorough the SoClean call center and through aftermarket campaigns such as email. The extended warranty program will be live on SoClean.com in late Q1.
When the first version of the warranty was rolled out via SoClean call centers, sales staff saw a 15% conversion rate. “Another benefit is our employee morale and partner morale,” Brown said. “They wanted something else to sell and something else to talk about.”
SoClean has found the extended warranty to be especially popular among the children of aging adults who buy the SoClean 2 for their parents. “It adds peace of mind for them,” Brown said.
Levin remarked that these aren’t warranties from your parents’ generation, when a misplaced receipt or losing track of warranty paperwork at the bottom of a desk drawer meant tough luck. Now transactions are tracked digitally.
“We’re taking extended warranties into the modern era, and we’re making them focus on customer experience from start to finish,” said Levin. “We want to make it as simple as possible.”
“We saw that first-hand when we started to implement it,” Brown said. “We were very pleased with the implementation team and how fast we were able to get it up and running. This has definitely been a good addition.”
SoClean was named by Deloitte as one of America’s fastest growing technology companies for the second year in a row. It ranked number 39 on Deloitte’s Technology Fast 500, and grew revenue by 3,280% in the three-year period between 2015 and 2018.
Brown said annual revenue for SoClean, a private company, is between $150 million and $300 million.