Certifying third-party repairs retains customers, signals utility left in goods
UNIVERSITY PARK, Pa. — Certifying a third-party repair service can help companies retain customers by signaling that there’s value, or “unused utility,” left in broken products, according to a team led by Penn State researchers.
The researchers, who were raised by parents and grandparents with what they called a “fix it” mindset, said they noticed a trend toward disposable consumption over recent decades. This trend leads consumers to replace, rather than repair, broken goods, which end up in landfills. The team wanted to see if brand repair services increased repair rates of durable goods like laptops and stand mixers while addressing two major concerns: that repairs would eat into sales numbers, and the cost of hosting an in-house repair service.
The researchers found that certifying third-party repair services — external companies that are brand-approved to fix specific broken products — benefitted brands, third-party service providers and consumers. Those third-party certifications signaled to consumers that there was unused utility — or life left — in their broken products, increased repair rates and helped brands retain market share by avoiding customer switching behavior. The team reported their findings in the Journal of Consumer Research.
“Having an in-house brand repair service is a cost center, it’s effortful,” said study co-author Karen Winterich, distinguished professor of marketing at Penn State’s Smeal College of Business. “We found that third-party certification helps the brand reap the same benefits as having an in-house repair service, seem more sustainable and keep customers satisfied with their purchases.”
To determine the impact of certified brand repair services on third-party providers, consumers and companies, the researchers conducted a series of six experiments.
First, the researchers collaborated with third-party computer repair companies. As part of the study, 2,056 American consumers saw one of two identical social media posts advertising laptop repair services. When a consumer clicked on the social media post, they were directed to one of two landing pages: both pages featured a major laptop brand’s logo, but only one version of the landing page advertised that the repair service had brand-certified repair technicians. The researchers found that consumers were nearly twice as likely to initiate a repair with the brand-certified service compared to service without brand certification. A second study followed this same design for a different third-party repair service and major laptop brand, again finding that brand certification increases repair leads with over a 700% increase.
In the second experiment, the researchers asked 501 online participants in the U.S. to imagine owning a pair of headphones from a fictional brand that broke after two years of use. The participants were then divided into three groups: one group saw advertisements for a third-party repair service that did not mention brand certification; another group saw advertisements for a brand-certified repair service; and the third group saw advertisements for repair offered directly by the brand. Then the participants answered questions about their likelihood to have the product repaired or replaced, and their likelihood to switch to another brand.
The researchers found that participants in the brand-certified and brand repair groups were more likely to have their headphones repaired than the non-brand-certified group, and that there was no significant difference between the two groups. They also found that of the participants who indicated that they would replace their headphones instead of repair them, 76% said they would switch to a different brand.
“Our findings suggest that when a product breaks and consumers don’t intend to repair it, more than two-thirds of consumers are more likely to replace the broken product with a different brand,” Winterich said. “This means that a brand is losing market share and giving up sales to a new company when they don’t have a repair service or certify a third-party repair service.”
In the third and fourth experiments, the researchers asked 350 and 230 participants, respectively, about their likelihood to repair their broken product based on their expertise with a product domain and their emotional attachment to a product, like wedding gifts. In the third experiment, they found that likelihood to repair was higher for a certified third-party repair service, but only for individuals with low expertise that needed the brand to signal remaining value in the broken product. In the fourth, they noted that individuals are more likely to repair products with high sentimental value regardless of who repairs the product, and that certified repair services are more influential for products with low sentimental value.
The final experiment looked at how likely nearly 400 video game console owners in the U.S. were to repair a broken console around the time when an upgraded version was slated to be released. The researchers found that consumers were more likely to replace their broken consoles with a newly released upgrade than to have them repaired by a certified third party.
The overall findings of the six experiments suggest that brand certification of third-party repair services present a win-win-win situation for companies, consumers and third-party service providers, according to the researchers.
“Consumers don’t want to be wasteful, but replacing is massively wasteful in many cases,” Winterich said. “Our findings can help companies signal to consumers that there’s value remaining in their broken products, and it’s worth getting them fixed.”
Nathan Allred, assistant professor of marketing at the University of Virginia who completed his doctoral degree at Penn State, co-authored the study. Penn State, through the Center for the Business of Sustainability at the Smeal College of Business and the Susman Professorship in Sustainability, and the Tom and Linda Buday Purposeful Brands Excellence Fund supported this work.
Journal
Journal of Consumer Research
Article Title
Repair Service Signals: How Brand Repair Services Signal Unused Utility and Increase Product Repair
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