At Your Service
In contrast to independents, Donaldson says, "We know that the box stores are selling closing service plans at about five to six percent of sales. Independents are lucky to get one percent on average." He says that there are exceptions, with independents selling plans well, but Donaldson notes that the reason big boxers are outselling when it comes to service plans is, "They do offer them to every single customer, number one."
He says, "We talked to one of our dealers who used to own the catalog stores of Sears, and he said that no matter how lousy a job he did of selling service plans, one in five would buy one. The customer isn't thinking about the service plan when they buy the product—they're thinking about the product." He believes that big boxes approach the customers with service plans after that customer decides to buy the product. And while he says, "You wouldn't want buy it on a toaster," there are cases, like plasma televisions and DVD recorders, where repairs can become expensive.
"Our research shows that 63 percent of today's consumers will be expected to hear a presentation of a service plan," says Donaldson, noting that this statistic is specific to the electronics and car industries. "They expect to be asked."