Yesterday, I purchased my third HP printer in just over 36 months. Buying the first new printer was my choice based on an upgrade in technology. I decided to rid my home office of a separate printer and fax machine and consolidate into a single unit that prints, copies, faxes and scans. This printer lasted just about two years until it died a quick death after an electrical storm (so much for my surge protector). The replacement printer died after a year when the ink cartridge mechanism jammed and broke off.
In both cases, my manufacturer's warranty had expired and I was told that I would be better off buying a new printer rather than fixing the old one. This recommendation considered the cost of shipping, handling, service and parts; and the time I would be without a printer. On my trip back from Staples yesterday, I got to thinking about the expected life of a consumer product. Certainly, I had hoped that a printer would last a number of years rather than months.
Often, expectations about the useful life of a product are built into the customer mindset only to be reinforced by marketing messages. Price is largely an irrelevant matter. For example, single use products range from the inexpensive -- Gillette disposal razors (@ $3.50 for a pack of 3) to the absurdly expensive -- a bottle of 1996 Dom Perignon Rose for $349.99. Likewise, there are inexpensive products that last almost forever -- a Kitchen Aid can opener for $9.99. And, there are many expensive products with long, useful lives -- the 2008 S600 sedan from Mercedes Benz, which has a base price of $144,975. For a more utilitarian, automotive example, remember the Volvo ads showcasing owners who had driven their cars for hundred of thousands of miles?
Let's leave aside the factor of technological obsolescence -- consumers have learned this will happen particularly with technology gadgets. In this case, manufacturers argue that consumers are getting direct benefits from upgrading to new models -- so at least there is a payoff. Also leave aside fashion items. Those who purchase a $2,000 suit from Armani Collezioni recognize that the appeal of the suit's design is short lived.
How long should a printer realistically last? Or, an iPod? Or, a cell phone? Products that cost between $100 and $1,000 are a no man's land for consumers especially if the life expectancy is hard to guage or the product is prone to break or fail. In essense, products like this are not expensive enough to repair but still cost a sufficient amount to make you say ouch!
In this $100 - $1,000 price range, consumers are often told that the expense and hassle of repairing s product are just not worth it -- you are better off buying a new one. For my money, this is an unacceptable consumer experience and appears to be built into the manufacturer's business model. Once or twice burned, you are convinced to buy the extended warranty. You actually pay more for the printer up front for the peace of mind that if it dies a premature death, you can have it easily replaced.
But buying the extended service policy is optional and many customers worry that they are being ripped off if they buy it. Are we really equipped analytically to calculate the risk of forgoing the extended warranty especially if we are prone to suspicions about the manufacturer? In my case, I bought the 3 year extended warranty on the new HP printer for about $95. A far simpler model in my view would be to simply raise the price of all HP printers by half this amount -- say $50 -- and then offer a LL Bean like service policy to all -- if for any reason, your printer stops working, we will fix it for free, no questions asked.
This works to every one's benefit. The consumer saves money in the long run and has a happier customer experience. And the model benefits HP as well -- not only is consumer loyalty enhanced but this approach provides the discipline to develop and produce high quality, low maintenance products. And that's what HP should be all about.
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