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Here's are excerpts from what some warranty company executives told us are the most important things they're doing to help retailers improve sales in the second quarter. See the March issue of Dealerscope for the full report.
Matt Frankel, president, AIG: In today's challenging economy, there's an interesting situation that occurs when retailers don't have as many people walking in the door. There's plenty of product to be sold and plenty of consumer value in those products, but customers are leery. But retailers also have more time to spend with consumers. The counsel we offer to dealers is to use that time wisely, and sell the services that go with the products to maximize the pleasure and security of the customer's purchase. People are weighing the tough decisions about whether they should spend that $1,000, and deciding on what - necessities or luxuries.
Most of the products that service contracts are attached to are luxury items. They're thinking twice about purchases, and about the security of their jobs and investments. Peace of mind is something hard to come by in a down economy. So in presenting service contracts, the peace of mind aspect is even more powerful, because consumers can be assured that their $1,000 purchase will last a long time and will be worry-free. When the economy gets tighter, like today, the attachment rate goes up because there is more time to spend with individual customers and also there is an additional tendency from the consumer to consider buying a service contract because of unforeseen events.
Bruce Saulnier, president, AMT Warranty: With retail sales expected to be flat or slightly below last year's levels, retailers are looking to boost attachment rates on extended warranties to preserve their profit margins. AMT Warranty is spending more time and resources actively engaging with them on training initiatives on a frequent basis. We're offering sales training through Webinars, tele-training and proficiency training for managers and sales associates. We're also looking at initiating a pilot program using MP3 training modules.
Another way we're helping retailers is by expanding our Protect-it product line to include a streamlined program for use in big-box retail stores. This program offers repair and replacement price bands for all covered products on one card, while still offering tangibility to consumers.
Companies Mentioned:
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