Today, customers are spending more on technology and using their products more heavily than ever before. The buying process for customers has changed drastically with research being done first, by the customer, before ever setting foot in a store. The benefits that are most compelling to customers have changed, making sales tactics evolve into a more complex process. Thus, it is important for retailers to understand what drives the decision to buy a protection plan, whether it is an appliance, consumer electronic, cell phone, or other device that is being purchased with it.
In order to help you and your team learn more about why a customer is interested in purchasing (or not purchasing) a protection plan, we’ve put together the top 5 things customers care about when deciding to extend their warranty. Understanding the core concerns for your customers will help you appeal to their pain points, and handle objections with ease.
What is Most Important When Buying a Protection Plan?
#1. Brand Reputation & Quality of Service
Because your customers are doing research on their own, before they even purchase the product, the reputation of the company you partner with must be exceptional. In fact 70% of customers want to know about the company servicing the protection plan, and nearly 60% say the reputation is an important aspect of the overall purchase decision. So, with that in mind, make sure to do your own research and partner with a company that is trusted and offers protection plans that your customers can be happy with purchasing and using.
#2. Coverage for Accidentals
Gone are the days where consumers are happy with a simple manufacturer warranty. While not every customer is educated on what a manufacturer warranty is (your staff should educate the ones that don’t know!), it is becoming common knowledge that only defects are covered, not accidentals. On the other hand, some customers may have purchased extended warranties previously that also did not cover accidentals like drops and water damage and ended up frustrated with the experience.
Make sure you partner with a warranty provider that offers coverage for real-life accidents (W3 Solutions even offers it on BYOD products!) to help ensure your customers are happy and trust the relationship you are building with them. This reduces churn and increases your revenue per customer over time.
#3. The Speed of Replacement
Nearly half (48%) of consumers expect an immediate replacement when devices break. If your warranty partner cannot offer this, make sure they have a system in place that gets a new item drop shipped to your customer as soon as possible.
#4. How the Cost of the Product Stacks Up to the Cost of the Plan
It’s not just the cost of the protection plan that customers are thinking about when they decide to extend their warranty. They are actually thinking about a few costs including:
- The total cost of the product
- The total cost of the protection plan contract
- How breakable the product is and the cost of fixing common damages
Knowing this, you can see how it would be easier to sell a protection plan on a brand new iPhone, or top of the line washer and dryer set, than an entry level product. People want to know that the cost of the protection is small in comparison to what they would have to pay in case of a catastrophe. They may not have the answer, but your sales team can make sure they know before declining the service.
#5. Transparency and Understanding the Fine Print
As you know, customers have been burned many times by the fine print and loopholes written into extended warranty plan contracts. In fact, 53% of consumers are deterred by the fine print of protection plans; 31% have experienced poor customer service and find the claims process difficult. Yikes!
The good news is that this issue is easily solved by working with a warranty program partner that has these details ironed out. For example, W3 Solutions ensures that your customer’s claim process is seamless and able to be completed online with quick drop shipping. We also offer sales training to your staff so that understanding and communicating any fine print is easy for them and appreciated by your customers. There is no stone left unturned.