In today’s highly competitive retail marketplace, providing valuable
add-on services is essential to increasing profitability and enhancing
customer satisfaction. But, determining the value of an extended
service plan (ESP) is often in the eye of the beholder. For some
consumers, it’s seen as a security blanket, knowing their investment is
protected long after the manufacturer's warranty runs out. Others,
however, see warranty plans as another line item on their receipt that
they can’t justify during challenging economic times. As retailers look
to bolster profit margins in times of flat sales, it’s important to drive
home the benefits ESPs offer consumers above and beyond the
warranty terms and conditions.
One Size Doesn’t Fit All
In light of slumping retail sales, extended warranty programs have become an
essential and profitable value-add for retailers. Extended warranty plans such as
product replacement programs, extended service plans, on-site service and
comprehensive service programs offer distinctly different options to help
customize a plan that best suits the consumer. By knowing the specifics, your
staff will be better equipped to capitalize on the value these plans offer.
Satisfaction Guaranteed?
The only way to have valuable dialogue with the consumer is to have a wellrepresented team selling products and the services associated with them.
Generally, there are four factors that go through the consumer’s mind when
considering an ESP:
1. Value of item being purchased
2. Price of extended warranty
3. Length of manufacturer's warranty
4. Length of extended warranty and date coverage begins
Through various sales tactics and techniques, your sales team can re-engage the
consumer beyond the normal talking points by highlighting the services your
warranty provider offers that often get overlooked:
1.Save time and money — If a product fails during the extended term, the
consumer will not have to deal with repair hassles or bills because either a
replacement (delivered same day or next day) or repair of the product will
be handled by the provider. Locating an approved service center by the
consumer’s ZIP Code is also a valuable time savings.
2. Ongoing support — For ongoing product support or questions about a plan,
consumers can call a dedicated toll-free ESP hotline for inquiries or other
details during the term of their extended warranty.
3. Trusted partner — The extended warranty plan is attached to the
consumer, not the store. Since the rate of foreclosures and bankruptcies are up
in today’s economy, it never hurts to point out the ownership aspect of the ESP.
The Bottom Line
The world of consumer electronics is cut throat — profit margins are slim, and
prices have to remain competitive or stores lose business. For retailers, finding
new ways to increase profits are not easy to come by. But, ESPs cost virtually
nothing to market, take up little to no inventory space and are easy to promote.
Retail personnel, especially, are in a unique position to sell extended plans to
consumers because the transaction takes place live, in-person and at the point
of purchase. Timing is definitely part of the sales equation, but selling value to
an informed consumer provides better customer service and sought-after
profit margins.
Article Resource:-https://warrantech.com/blog/may-2015/enhancingcustomer-service-and-profit-margins-one/