The Do’s and Don’ts of Selling Extended Service Plans
Most consumers have a preconceived view about of extended service plans as protection they don’t need. How you train your sales team to present your plan to the consumer can make a huge difference in your success rate and in customer satisfaction levels. Here are just a few tips for successfully selling ESPs:
Don’t Sell Point-of-Purchase ESPs (If You Can Avoid It)
Unfortunately, retail has experienced some struggles in the last five years, and many companies have stopped training employees to sell extended service plans. Instead, some stores put plans in plastic packaging near the checkout with other impulse purchase items. They hope the customer will take the initiative to read about, understand, and buy the ESP on their own.
This kind of impulse buy may work for gum, but not for an ESP, which requires an explanation of benefits. Customers need help understanding the value of this investment. Depending solely on a point of purchase display to sell the plan is not impossible but more than likely won’t succeed.
In addition, customers at the checkout are ready to pay. They’ve already filled out the check in their head and are prepared to spend a certain amount of money. Expecting them to spend another $39.99 isn’t very realistic unless your cashiers are skillfully trained on how to quickly create value in the customers mind. Otherwise, the customer is thinking about checking out, walking out, and driving away—not spending more money.
The Top Two Challenges Retailers Have with Extended Service Plans—and How to Master Them
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.
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Four Advantages of Selling Extended Service Plans
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...