Some add-ons are a hard sell on the front lines of retail. Consumers still wading through the molasses of economic recovery are averse to splurges, staying focused on the bare-bone necessities for their next purchase. But that very same sentiment aids retailers in pushing warranties, an add-on that offers tightly belted customers the peace of mind they need when making a large purchase. Here’s what execs at some major warranty companies said about what they have planned to help dealers make more warranty sales in 2015.
With 2015 here, it's a great time to look at the trends shaping the service contract business.
With 2015 nearly here, it’s a great time to look at the trends shaping the service contract business. The future of service contracts is strong, but will require change and adaptability. Service contract sales continue to be driven by the needs of consumers. Those needs are being influenced by product innovation, new distribution channels, service-model changes and globalization. These changes are more than slight modifications; they are fundamental change.
Warranty companies discuss their 2014 growth plans
Chartis, which acquired Service Net in early 2012 and then integrated it into its U.S. Warranty Division, announced in November that it would rebrand as AIG (American International Group) – a brand that took heat as America was in the throes of the late-2008 financial crisis, when AIG became a recipient of government bailout money. But since then, AIG has paid American taxpayers back and then some, with a positive return of $15 billion, and is positioned to leverage the brand’s global presence to full effect, James Mostofi, president of AIG’s U.S. Warranty Division, said.
Best Buy and the American International Group (AIG) agreed to a multi-year renewal this week of their Geek Squad Protection Agreement. AIG's Warranty Division remains the exclusive service provider of Best Buy's Geek Squad Protection Plans.
To strengthen their cases with retailers and end-users, warranty companies are shoring up efforts on all fronts - marketing, customer support and sales training - while driving home the perennial "peace of mind" message the category has been built on.
Sales of extended warranties, despite a few glitches right before last year’s fourth quarter, seem to have stabilized going into the new year, due mainly to providers that have ramped up dealer programs and retailers who have discovered new strategies and leveraged market trends to push the coverage.
Maximizing a product sale nowadays means attaching an extended service plan, which is often challenging in this age of the penny-conscious, Internet-educated consumer. Sales associates need to be prepared with the right customer-qualifying gambits, all the necessary background information to answer questions simply and accurately, and a logical defense strategy to fend off arguments against spending a little extra now to avoid spending a lot more later. Some of the industry’s key executives spoke to us about how to perfect the art of the warranty sale. Tune in for Part II next month. What are the best strategies retail salespeople can use
Thin is in. And that’s not just for flat panels. It’s also true for the in-box warranties that accompany them. The trend emerged about 18 months ago when appliance manufacturers started offering shorter terms on warranties. CE manufacturers are now adopting the practice, which is helping retailers sell more margin-rich ESPs. Since the limited in-box warranties make one of the best tools for convincing customers they need an ESP, retail sales associates should keep up with the manufacturers’ terms for different brands in various categories, warranty providers said. Kevin Rupkey, president and CEO at Bankers Warranty Group, pointed out that “the biggest change has