Topic: Retail Sales

The Key To Selling Extended Warranties In Retail Stores

By Bob Phibbs

retail protection plan sellGoogle “How to sell protection plans” and you’ll get lots of results – none of them good…

• Employees at Office Depot have been pressured to sell protection plans
• Best Buy tried the hard sell on protection plans
• Selling It With Extras, or Not at All

When I entered a Radio Shack and looked at the iPhone displays, I had no idea I was about to add to the selling extended warranties stories...

A guy shouted from behind the counter, “What are you looking for?”

I answered, “A new cord,” and he replied, “Over there by the iPads.”

I found my cord and took it up to the counter to be rung up.

The cashier told me the total and said, “You can get a three-year replacement warranty for just $1.29.”
“No thanks,” I said.

Really?” he said - like I’d just said I skated naked across Lake Ticonderoga while singing What Does The Fox Say.

“Really, NO” I said. He shook his head.

That’s when it hit me. This is the training The Shack must be encouraging. Like many electronics retailers, this location must be using protection plans in an attempt to bring back the profits that lower traffic counts and/or deep discounts have erased.

But come on…

If you are selling protection plans, you first have to develop a relationship with the customer on some level. Then you need a modicum of common sense.

Power cables warranted for 3 years – Who the hell would opt for that?

And that’s when it hit me.

This is one way this Radio Shack can exert control over employees.

Like checking the back of every credit card for a signature, protection plans are an easy thing to check-up on. This Shack must tell their employees, You must sell everyone a protection plan no matter how small. They do that because they want to make sure everyone is given the opportunity to give them money – regardless how silly the pitch seems.

I’ve actually bought and used extended warranties. When I purchased a white rug, I knew that spilling red wine on it was just a matter of time. About a year later, sure enough, at a party I hosted a friend spilled a glass. The company came out and authorized replacement.

See also, Retail Customer Experience That Works: Connecting With Shoppers 

I bought another one when I purchased my laptop. Two years later as I turned it on before a speech, it greeted me with a puff of smoke. Again, my protection plan replaced it.

I guess I’m debating the merits of a protection plan or extended warranty. Many will tell you they don’t find value in them, but I’m telling you it is a matter of what your plan offers and how the customer might benefit that makes a protection plan worth selling.

If you are a customer-focused business, the protection plan can come up as an add-on. For example, for someone who depends on their iPad or computer, a protection plan that delivers a replacement within 24 hours is a godsend.

But trying to shame customers into buying protection plans because you were told to – doesn’t make sense.

There are certain items that should be sold with an extended warranty because they cost more. But you can’t expect every item you sell to be worthy of a protection plan.

You want to anger customers? Sound silly? Pitch all of your items with a protection plan.

The Point

If you want to actually sell the protection plan, be customer-focused and train your employees on the soft skills of communicating and problem-solving. Then make sure they match the compelling benefits of a protection plan with products that deserve them.

Then you can increase your sales of extended warranties.

Really? I can still hear that guy say it….

I still can’t get over that…

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