As the prices of electronics and appliances continue to fall, it’s critical that you train your team on how to effectively position your extended service plan with the benefits that will provide the best value for the price to your customer.
Extended service plans (ESPs) and accessories are helping many retailers make up the loss of margin they’re experiencing as a result of lower prices on everything from computers to washing machines. While it’s true ESPs provide the much needed margin, more importantly, they provide additional value by helping to improve customer loyalty and reducing product returns.
Most companies face two challenges that prevent them from maximizing ESP sales. One, they don’t know how to balance the benefits of the plan with the price. And two, they don’t know how to train and manage their organization to sell them. Here are a few ways to address both of these challenges.
How much of a priority is selling extended services plans to your managers and employees? We’ve found that some companies offer ESPs to their customers begrudgingly. They’ll offer them because they are told they have to or because their competitors do, but they never fully embrace the concept or the benefits. This is a costly mistake. The benefits to your company, your associates, and your customers, far outweigh the time and resources you invest in working with manufacturers, negotiating with insurance companies, and training your team how to properly present ESPs to your customers.
The return on investment of selling extended service plans includes four major benefits...
If you could reduce your returns by 25 percent, what kind of impact would it have on your bottom line? After creating a foundation for managing returns, companies such as Philips, AT&T, Best Buy, Hoover, and P&G have reduced returns by more than $100 million. Whether your company has the potential for that kind of savings or not, the impact can be significant. A streamlined product returns management plan saves money, increases productivity and profitability, and improves customer relations.