Extended warranties – often called “protection plans” – can help retailers achieve greater profitability while improving the customer’s experience during the sales process and years after. Understanding consumer motivations behind protection plans will help you train your sales associates and create an exemplary customer service experience for your customers. Additionally, when you know the concerns of your buyers, it will help you explore what to look for in a warranty partner, and demonstrate how an effective warranty provider can increase revenue and attachment rates. This article discusses the five most common considerations consumers have when purchasing a wireless protection plan, and how to sell to the concern.
5 Things Customers Consider When Buying an Extended Warranty
1. Total Cost of Product
56% of consumers care most about the total cost of the product when deciding whether or not to purchase a protection plan. Why is this so important? Typically, if the item is expensive, or a large part of the consumer’s budget, replacing the item becomes a concern. With a cracked screen, a faulty button, or any other of the many problems today’s devices can have it is imperative that replacing the product be easy and cost effective.
Selling Tip: Stress the need to protect high-priced items due to the cost of replacement. Underscore the details of your plan that cover personal damage above and beyond factory malfunctions.
Soundbite: “This is a really nice phone. You should strongly consider adding a protection plan. When you have a protection plan, you are covered for any damages including cracked screens, broken phone bodies, water damage, and anything else that could potentially go wrong. In fact, did you know that 25% of people will break their phone in the first year? You will save yourself from having to buy a new phone, at retail cost, should that happen to you.”
2. Cost of Protection Plan
When consumers are looking to purchase a mobile device, they often are not thinking about whether or not they need a protection plan. When the idea of adding on a protection plan is presented to the customer, price becomes the major factor in deciding whether or not to accept the extended coverage. According to Consumer Electronics Association (CEA), 51% of consumers say that the cost of the plan is critical when deciding whether or not to purchase the device.
Selling Tip: Highlight the affordability of protection plans, and how the cost will offset any large expenses likely to occur at a later date. Additionally, you should lead with the benefits of the plan when speaking to customers to help close any education gaps they may have.
Soundbite: “The total cost of the protection plan is $7 per month. That’s only $84 per year. Most people will need a replacement phone within 18-24 months, so you will be saving about $900 with the protection plan vs. having to buy the phone outright.”
3. Immediate Replacement of Product
Most customers do not want to be left without a phone. In an age of bring-your-own-device (BYOD), and a constant connection to communication tools, not having a phone can be a major frustration. Thus, it is critical that you explain how quickly a product can be replaced once reported.
Selling Tip: Explain the claim process, how to report, when it is necessary to come back to the store (if ever), and what a typical turnaround time is when a claim is made. Reassure that your warranty program is meticulous in ensuring the supply chain moves quickly without hiccups or mistakes.
Soundbite: “I’m glad you’re considering a protection plan. It is a great value, and our company is the top player in the industry. Because we specialize in mobile device protection, we can ensure that the claim process, especially turnaround times, are fast and efficient. You can expect for a working phone, of the same model, sent to you the next business day.”
4. Breakability of Product
The breakability of a product is an important factor when consumers decided to purchase an extended warranty or protection plan. 42% of consumers say it is important or very important. When a product is more vulnerable to breakage, the total future cost for your customer is increased. Leverage this in the sales process.
Selling Tip: Remind the customer of risk scenarios that could potentially happen to them. Many people drop their phones while walking and texting. This could cause a cracked screen that needs replacing, or it chips the body. Water damage is also common and can be costly to replace without a protection plan. Remind your customer how these risks relate to the real cost of the product replacement as they will be outside of their contract and the total cost of the phone will be their only option, not the discounted contract rate. Finally, sum it up by giving the customer peace of mind and state that protection plans cover them in case of any accidents.
Soundbite: “When you don’t choose a protection plan, you set yourself up for risk. For example, how often do you drop your phone? How many close calls have you had near water? All it takes is one drop, one spill, one accident and you are responsible for the total cost of the phone which is $900 retail as the subsidized contract price will not apply.”
5. Customer service
Transparency and a strong understanding of the kind of customer service the consumer will receive from your extended warranty program is extremely important and should be emphasized throughout the sales process. For example, 53% of consumers are concerned about loopholes and fine print from the warranty company and site misleading contracts as their biggest frustration. 31% of customers have already experienced poor customer service in a previous plan and are shy to purchase another one. This makes your selling process more difficult, but also provides an opportunity to rise above and be seen as trustworthy. It all starts with training your sales team to be empathetic to the customer’s needs and concerns. Once you’ve built that trust, your sales associates can start to demonstrate their knowledge about the product, how easy the claims process is, and how quick a claim turnaround can be.
Selling Tip: Emphasize the ease of communication with the warranty plan provider; walk through any contract questions and spend time answering the customer’s questions. Empathize with concerns of those customers that have had poor customer service with brands other than your’s and explain that there is little to no hassle when making a claim and receiving their mobile device back. A helpful sales person can take your warranty program to the next level, win new customers, and retain current customers.
Soundbite: “I’m truly sorry you had to experience such a poor quality of customer service during your last contract. I can assure you that our protection plans are the exact opposite, and strive to make your experience hassle-free with clear and open communication. Would you like to look through the contract to see what is included in your contract so there is nothing left unturned?”
Your customers may not be purchasing protection plans because not all of their concerns are being addressed during the sales process. Make sure your sales team is trained appropriately and can bypass any pitfalls that come their way through empathizing and clearly communicating with your customers the expectations of a protection plan.