THE FUTURE OF EXTENDED SERVICE PLANS
While they are a lot lighter than a brushed stainless deluxe refrigerator and more svelte than a flat panel TV, extended warranties, or extended service plans (ESPs) aren’t as sexy. But they are as much a retail product as anything else hawked on a sales floor. And in the one way that really counts—margin-oomph—they’re a lot more impressive, than many of the items they assure. So tuck away your Ouija boards—you won’t need them—as Dealerscope lets some prominent providers talk up the benefits and challenges of selling ESPs in this age of short product lifecycles, low-priced “disposable” electronics and unassisted sales floors.
Dealerscope: What overall changes are you implementing that are designed to streamline your back-and-forth with retailers?
Mike Frosch: With retailer and consumers, in both cases, documentation is an automated process. We have our own nationwide factory authorized network of repair facilities that we contract with, and it’s fairly transparent to consumers. We validate their contract and dispatch that out to the servicer; the consumer pays nothing up front and doesn’t have to wait for reimbursement. On the retail side, if it’s a self-servicing retailer, the consumer will obtain service from that retailer. We’re a multi-billion-dollar player in the extended warranty space with 43 years of experience. Our efficiencies in automation have been a driver for our growth.