Extending Warranties’ Appeal
Extended warranty sales have always been the icing on the cake for retailers during the frenetic holiday selling season. In this year’s Christmas rush, however, the execution of a warranty sale could spell the difference between coup and calamity on the sales floor. The reasons are many for that precarious position, especially the squeaky-tight margins on most flat-panel televisions.
In light of a retail atmosphere where even titans like Circuit City—which cited a 38 percent drop in warranty sales as one reason for its second-quarter losses—are taking it on the chin, how do warranty companies view market conditions for their product? And what are they doing to spruce up their programs and follow-through strategies to ensure retail customers leave a store with both a product and a contract?
The strongest retail accounts for AMT are those that provide their salespeople with the proper training. “A while ago, retailers didn’t want to scope away from their core models of just selling product,” said the company’s president, Bruce Saulnier. “We tell our accounts that selling them is not counter to their business model because you can’t sell a warranty unless you first sell a product.”