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Sponsored Post: Home Warranty Companies Doing Better Than Ever

[Note from the editor: This is a sponsored post, from this month’s Geek Estate Blog sponsor, ReviewHomeWarranties.com.]

Home warranty is a rather small niche inside real estate but it has been constantly picking up to an extent that a single company, namely American Home Shield, is turning over more than a billion dollars every year. It’s true that American Home Shield is by far the most recognizable name in this industry with an estimated market share of more than 60%, but still, it is pretty mind boggling to realize they turn as much revenue as they do considering it’s a fairly cheap service that only nets $616 per customer per year on average.

American Home Shield does not advertise the precise number of customers using their service but by applying simple maths it is safe to assume that the number is higher than 1.5m households, which is more than 10% of all American households! If we take into account that American Home Shield is not the only company around offering these type of services, we can estimate that 1:5 American households owns a home warranty.

How did such an obscure product has achieve such greatness? The answer is, as always, marketing. In fact, the product itself is notoriously problematic so the marketing departments of home warranty providers had a dual challenge – get more customers interested, and additional, fixing the poor reputation. They have successfully done so by using the following methodologies:

Working with BBB and other complaint sites

The largest and most successful home warranty companies started amending their poor reputation by working with mediation sites like the Better Business Bureau. For example, American Home Shield’s BBB rating is B in spite of 82% bad feedback and more than 10,000 complaints in total. The firm managed to resolve the vast majority of complaints and satisfy disgruntled customers, restoring its good rating and the public’s trust in it.

Working with affiliate sites

The top home warranty companies work with affiliates that send through referrals in exchange for a commission fee. Such affiliates include Consumer Advocate (massive site) and Review Home Warranties (a niche specialized guide). This makes home warranty companies appear more trustworthy and reputable, as well as the direct benefit of getting quality traffic to their website.

TV advertising

American Home Shield has a brilliant commercial airing on national TV and creating brand recognition and awareness. It provides insight on the nature of the service, who needs it, and why, within a one-minute timeframe.

These commercials made American Home Shield almost synonymous with the term “home warranty”. In fact, there are almost as many searches on Google for American Home Shield as there are for any type of home warranty!

Website content / blog

All the large home warranty companies have significantly improved their website’s content over the past few years. Most of them are boasting freshly updated blogs with helpful tips for homeowners that can attract more generic type of audience and use soft-sale technique.

A better service!

The home warranty industry could not have sustained if all clients were disgruntled for prolonged periods of time. With no ear-to-mouth recommendations or recurring clients, you just can’t reach the levels of growth this industry has been experiencing. It is reasonable to believe these companies are improving their level of service as the most substantial part of the process of restoring their reputation.

Concluding words

The home warranty industry was facing a major challenge which has been overcame through a multidisciplinary approach and the industry is now stronger and bigger than ever. There will be more challenges ahead, of course. At a market share of approximately 10% of all American households, this industry is no longer “under the radar”!

[Note from the editor: This is a sponsored post, from this month’s Geek Estate Blog sponsor, ReviewHomeWarranties.com.]

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