Carolyn Heinze

For consumer electronics and appliance dealers, it has been standard practice to give away a number of services and accessories as part of a big-ticket sale. Everything from haul-aways, deliveries, cords, connectors and even installations have been thrown in to sweeten the deal. The philosophy: if the customers are happy, they’ll come back and, better yet, tell their friends about you. A legitimate argument, and the practice has without a doubt helped to foster that valued customer loyalty. But as product margins continue to grow tighter, dealers are discovering that it’s costing them a lot more than they originally bargained for. Decreasing margins

Mention the word ‘accessories’ to a salesperson and images of small, low-ticket items immediately come to mind. But as consumers invest more money in big-ticket gear, many of the accompanying accessories have been rising in quality and price. To add as much functionality to their investments as possible, consumers are reaching for their wallets to buy the appropriate accessories. “There has been a definite trend toward more premium-priced accessories. The iPod is a current example of it, but I think it was Harley Davidson that started this trend,” said Chris Lyons, manager of educational and technical communications at Shure, Evanston, Ill. After purchasing a $20,000

Historically, customers were wary of buying an extended warranty or service agreement with their purchases. The increasing complexity of consumer electronics, however, is driving consumers to think twice before turning these policies down. “People are buying them more,” said Peter Kotsakis, sales manager at Flanner’s Home Entertainment in Brookfield, Wis. “We have a pretty good attachment rate as far as selling warranties with video products.” Customers today are seeking peace of mind and are willing to pay for it. When buying a plasma television, a home theater or a whole-house audio system, the extra cost associated with covering failures or breakdowns seems like an

You can tell something’s taking hold in the retail channel when, without actually looking, it hits you from all sides and from a variety of sources. The overall message became clear while I was editing the stories for this month’s issue: To survive in this tough environment, in which competition increases as fast as margins fall, retailers of all stripes must take the initiative to recommend full solutions to their customers and clearly explain the services they offer to optimize, maintain and upgrade those solutions. Ignore the full solution—the combination of hardware, software and services—and you’re leaving dollars on the floor. This isn’t new. What

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