How Manufacturers Can Boost Extended Warranty Sales: Strategies to ConsiderMar 30, 2023
Tips and Tricks to Maximize Revenue and Improve Customer Satisfaction
Extended warranties are a significant source of revenue for manufacturers, but convincing customers to purchase them can be challenging. According to a study by Square Trade, only 20% of customers purchase extended warranties for electronics, even though 65% have experienced a device failure. However, there are several strategies that manufacturers can use to increase the sale of extended warranties. This blog post will explore some best practices to help manufacturers maximize revenue and improve customer satisfaction.
Offer Competitive Pricing
Price is a significant factor when customers decide whether or not to purchase an extended warranty. Manufacturers should research the market to determine the average price for extended warranties and offer competitive pricing. According to an article in Warranty Week, "pricing strategies that focus on providing customers with the right combination of price and value will attract more customers to purchase extended warranties."
Many customers need to be aware of the benefits of extended warranties, which can lead them to decline to purchase one. Manufacturers should invest in educating their customers about the benefits of extended warranties, such as protection against unexpected repairs and potential cost savings in the long run. According to Warranty Week, "the key to successfully selling extended warranties is to educate the customer on why they need the warranty and what it covers."
Provide Easy Access to Purchase Extended Warranties
Customers are more likely to purchase an extended warranty if it is easy. Manufacturers should provide multiple ways for customers to purchase extended warranties, such as through their website, in-store, or call center. Warranty Week states, "by making the purchase process easy and accessible, customers will be more likely to buy an extended warranty."
Customize Plans to Meet Customers' Needs
Offering a one-size-fits-all approach to extended warranties may only work for some customers. Manufacturers can improve sales by offering customizable plans that meet customers' needs. According to Forbes, "customizable extended warranties can help manufacturers differentiate themselves from competitors, as they are offering a unique product tailored to the customer's needs."
Partner with Retailers/Resellers
Manufacturers can partner with retailers to offer extended warranties at the point of sale. This can help increase the visibility of extended warranties and make purchasing them more convenient for customers. Warranty Week states, "by partnering with retailers, manufacturers can increase their visibility and improve the chances of customers purchasing extended warranties."
In conclusion, manufacturers can increase the sale of extended warranties by offering competitive pricing, educating customers, providing easy access to purchases, customizing plans to meet customers' needs, and partnering with retailers. Manufacturers can improve revenue and customer satisfaction by implementing these strategies, making it a win-win situation for both parties. As David Bilbrough, Director of Strategic Initiatives at SquareTrade, states, "when customers understand the value of an extended warranty, they are more likely to purchase it, leading to increased revenue for manufacturers."
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