The Secret to Selling Extended TV Warranties
At face value, the latest Consumer Reports Annual Product Reliability Survey of TV sets bought between 2004 and 2007, which hit the stands in early November, has good news in it for both retailers and TV manufacturers. A summary of the study shows plasma and LCD TVs as “highly reliable, requiring few repairs during the first three years of use,” with rear-projection TVs “more repair-prone than LCD and plasma sets.” But the organization stands by its earlier advice against buying an extended warranty for a flat-panel TV.
What does that statement mean for sales of extended service plans on TVs at a time when flat-panel sales are at their apex? And what - if anything - are dealers and warranty providers doing to steel themselves against fallout from that advice?
“They’re right—and they’re wrong,” Michael Perlman, CEO of Miami, Fla.,-based BrandsMart, said of the report. “TVs are more dependable. But realistically, they’re not repairable. When I say that, I mean, you have a TV with maybe 125 bezel screws in the back. If they’re put back on out of alignment, it might not work right. The new big screens last way longer than the old ones—but again, if you’re the guy whose TV is broken in two years, you’re not going to want to hear about your $4,000 purchase being done. When people ask me should they get a warranty on their flat panel, I always tell them the same thing: you can get one or not. But if you have a problem, there’s an over-50 percent chance that we cannot repair the TV, and it may have to be replaced.”