How to Turn Warranty Offerings From a Checked Box to a Revenue Driver

By Jon Mikow

If the prospect of offering warranty solutions seems intimidating, you’re not alone. For many retailers, incorporating a warranty pitch into an already tricky sales process may be viewed as a simple check-the-box obligation. The reality is that warranties can offer an additional line of revenue and reduce customer churn, two tremendous assets for any business. Factor in the help of a third-party warranty partner, and the entire process can be made even simpler.

Raise Revenue and Retention

In 2016, consumers spent a whopping $23 billion on protection plans for items like mobile phones, computers and appliances. If a phone breaks or a computer has an electrical failure, warranty programs can help customers save money by helping to cover unexpected costs through customized protection based on their needs. When your customer is purchasing coverage from you instead of another company, they’re saving money while creating an additional line of revenue for your business.

Warranty protection also helps customers feel confident in their relationship with the retailer. If a product’s performance falls short, they know there’s a plan in place to take care of it, providing security and peace of mind. Furthermore, recent research shows that consumers who purchase extended warranties and service contracts show a significantly higher degree of loyalty than customers who don’t. In other words, care about your customers’ satisfaction and they’ll keep coming back.

Sell With Confidence

It’s crucial to know your warranty products inside and out, especially so you can showcase their benefits to customers. And, not surprisingly, 25 percent of customers say they’re more likely to purchase a warranty if it’s offered to them in a professional manner.

But it goes beyond what’s said — your sales team needs to be providing consistent messaging when speaking to customers. Thankfully, the right third-party warranty provider can offer both presentation materials and education to ensure your sales team is confident and on point when talking with customers.

As a retailer, you have the tools to deliver the savings, security and confidence customers are looking for. By partnering with a third-party warranty provider, you can package the process, product and people together to better serve your customers and boost revenue, allowing you to do more than just check a box.

Jon Mikow is vice president of wireless at Fortegra, a provider of credit protection, warranty, and specialty underwriting products and services.