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How to Sell Extended Warranty: 3 Golden Rules

Extended Warranty sign

Wondering how to sell extended warranty? This article explores 3 golden rules for you to bear in mind, revealing top tips to create an extended warranty sales pitch that converts customers…

What are extended warranties?

An extended warranty is an agreement for cover that extends beyond the time period of a manufacturer’s warranty. Every agreement differs slightly, but it typically covers repair, fitting and replacement costs as required. Retailers can benefit in a number of ways from selling extended warranties.

Benefits of selling extended warranties

Benefits of extended warranties for customers include:

Customers can benefit from knowing their new purchases are covered for a significant period of time. Benefits include:

  • Peace of mind
  • Longer product life
  • More confidence when making a purchase

Benefits of extended warranties for retailers include:

Knowing how to sell extended warranties has benefits for retailers. These include:

  • Less pressure from unhappy customers
  • Higher likelihood of high value purchases from customers
  • Profit on extended warranty packages

An overview

It wasn’t so long ago that extended warranty had a very bad time in the press. Even now there are plenty of mixed views as to how worthwhile it is for consumers to pay for something they might never need, or already be covered. Temper that with the suspicions consumers might be harbouring – is the salesperson on commission and will the retailer (God forbid!) make a profit from selling it? – and it’s reasonable to assume that nobody would ever want to pay money for an extended warranty on top of their already-expensive purchase.

So why bother even asking? Surely it’s better to not risk losing the sale and forget about extended warranty completely?

It depends on the warranty provider of course, but if there’s some good that has surfaced in the wake of its bad press, it’s that many extended warranties are now so much better. They have to be, because they are scrutinised far more closely than ever before, and not just by consumers. Reputable warranty providers are authorised and regulated by the Financial Conduct Authority, which means that consumers are protected against fraudulent and mis-sold extended warranties. The policies must deliver on their promises, and these are required to be clear and transparent and be sold correctly.

In addition, the providers are well aware that other insurance plans are available. This means that if an extended warranty is sold to somebody who is already covered for everything the warranty pledges to protect, then that sale is non-compliant and penalties could follow. Why risk your integrity, your credibility, even your company for the sake of a fast buck?

As a result, many extended warranty providers specialise, and it’s within those areas of speciality that extended warranties are able to prove their worth, because here they can cover products for breakdown and/ or accidental damage and provide a service level for which there is no real comparison with more generalised, even mandatory, insurance policies.

But still… on the shop floor? When you’re looking at someone who backs away at 100mph as soon as you mention those dreaded words: ‘extending your peace of mind’?

Well, that part is down to you, and your approach is crucial.

3 Golden rules to perfect your extended warranty sales pitch

Here are three golden rules to remember when selling extended warranty:

1. Tell everyone

Some customers may be more sceptical than others, and some people will say no on principle, but many people are open to the idea and providing they’re not already covered by another insurance plan, and the proposition makes sense and has clear benefits, then they will go for it. The key here is to tell every single customer about extended warranty.

2. Timing is everything

It’s no good ‘reminding’ someone that you can offer them a five-year service plan for a few extra pounds when they’re at the till. You might as well hit them with a cricket bat (the reaction will be similar). In order to make customers feel comfortable with the idea, and to allow enough time to show the benefits of extended warranty properly, you need to bring it into the conversation early, usually around the time you start to get interest on the product you’re demonstrating. Try it. Don’t spring it on customers suddenly but test them first, see how receptive they are.

3. Sell the benefits

This leads into rule number three, which is to think of extended warranty the same as you would a boxed product that customers can take off the shelf and pay for at the till. If that sounds too simplistic then remind yourself that an extended warranty has features and benefits the same as anything else on your shop floor, so you sell the benefits, link them back to your customers’ needs and manage their objections.

Create an extended warranty sales script

For new employees, or those that are unfamiliar with selling extended warranties, it can be beneficial to create an extended warranty sales script. Make sure this includes the key selling points and benefits. You should also prepare staff for how to deal with common objections. This can then be used as a training tool that team members can use as a basis for their extended warranty sales pitch.

Remember to allow for personalisation, as building rapport and trust with customers while understanding their concerns and pain points plays a key role in growing sales. After all, nobody wants to buy from a salesperson that sounds like they read the same script to every customer that walks in their store.

How to sell extended warranty

Selling extended warranty might take some practice, but it can be done, and the more you try, it the easier it’ll get. Just remember:

  • Not everybody will say no, so mention it to every single customer
  • Bring it into the conversation early
  • Sell the benefits of extended warranty as you would any other product on your shop floor

Extended warranty FAQs

How do I sell my extended protection plan?

The key to this is to understand the pain points that customers have and explain the benefits of your warranties. Read the rest of this article for the best ways to sell extended warranties.

What skills do staff need to sell an extended warranty?

Staff need communication skills, knowledge, confidence and the ability to solve problems. These characteristics will help to sell an extended warranty, enabling them to build rapport with customers while explaining the advantages accurately in a non-pushy way.

What do I need to sell extended warranties?

As well as capable team members, you can benefit from having easy-to-read documents that outline the benefits and prices of warranties. This simplifies the process of decision making for customers.

Learn more

Whether you are looking to learn how to sell extended warranty, or want to create an extended warranty sales pitch, it can be very simple.

T21 recently worked with an extended warranty provider and produced a series of training films to illustrate these three points. Feel free to watch them here: https://vimeo.com/channels/t21retracaresamples

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