As part if my job as salesman at Comet I have to sell warranties. The total value of the warranties I sell during the week is inputted into my sales matrix. In theory, if I meet my average-sales-per-hour target, and of my total at least 8% is essentials such as cables and tables, and another 5% is made up of warranty sales, I get a per-hour bonus. In reality bonuses are scarce but you do still get a rollicking for missing your targets.
Essentials are easy… “unfortunately the manufacturers don’t include memory cards, Sir, and the supplied cartridges only contain enough ink for fifteen or twenty sheets”… but warranties are a little trickier.
The problem with warranties is that people don’t realize that they want them. The very word ‘warranty’ sounds somehow disagreeable – it’s a dirty word that you must never use. People don’t want to pay extra for what they believe they’re entitled to anyway under ‘manufacturer’s guarantees’.
The problem with manufacturer’s guarantees is that they don’t really protect you against anything, but are often confused with independent protection plans. Panasonic might be legally required to ensure that your 32″ LCD TV performs for the next twelve months, but that doesn’t mean they’re going to do it with a cheery smile: £90 just to have it delivered to them for it to be confirmed as broken isn’t what most customers want to hear. When parts are factored in it’s easy to see where this age’s trend of viewing all products are disposables has risen from.
It doesn’t have to be like this. The protection plans we sell at Comet guarantee that you will have a functioning product for either the next 2 or 3, or 3 or 5 years. We offer two services:
- Instant Replacement Cover (or IRC) for 2 or 3 years on less expensive products;
- Total Protection Cover (or TPC) for 2 or 3, or 3 or 5 years on the more expensive products.
People don’t want IRC because they consider the products they’re purchasing to be disposable anyway, and people don’t want TPC because they’re already buying expensive products and don’t want to fork out more money. Both arguments sound agreeable on the surface, until you realize that you probably will save money and almost certainly will save yourself headaches at the end of your purchase’s life. People really don’t want to accept that. The sales pitch that Comet suggests (and that really should work) usually goes something like this:
“Hello sir, have you found what you’re looking for?”
“I think so. I’ve been looking at these irons. I can’t decide between this £25 Proline [because I’m a tightarse] or this £59 Bosch.”
“I see sir. I wouldn’t recommend the Proline because [they attempt to make everything under the sun from chest-freezers to floppy disks to televisions so they don’t specialize in anything and anything they stick their logo on turns to shite, and also] they aren’t particularly durable. May I ask why you’re looking to buy a new iron?”
“Yes, I had my last iron for 11 months and it died on me recently.”
“Ahh. Well, you might be interested to know that we offer a instant replacement scheme that effectively guarantees you a working iron for the next 3 or 5 years, basically if your iron breaks down just return it and we’ll cheerfully replace it for you for £9.99 for…”
“Ahh [I caught you off guard, I must be the only person in the world who realizes that salesmen exist to sell stuff, sometimes I amaze myself], here comes the sales pitch. Don’t try to sell me a warranty, I get through these things far too quickly, I might as well buy a new one. It’s covered by the manufacturer for 12 months anyway.”
It’s no good reasoning with this sort of customer that if his irons break down constantally he could save himself a lot of money by buying an iron that actually feels nice to use and protecting it for a tenner, rather than having to trouble himself returning to Comet every 7 or 9 months to repurchase and be surrounded by salesmen that want to sell him warranties to increase their sales matrices. This customer will take the £25 Prolin, and I’ll see him a couple of weeks later at the helpdesk and have to explain to him that we have to send his iron back to the manufacturer and it could take a number of weeks, rather than just exchange it as I did with the customer infront of him who had taken out a IRC plan.
So, to sell warranties you have to take a different approach. There are a couple of tricks you can use:
- Never call a warranty a warranty; this is the golden rule. Refer to it as ‘protection’ – if you can get a response from a customer by asking a question such as ‘have you thought about how you’ll be protecting your purchase’, even if the response is ‘what do you mean?’, you have a clear opening to start your pitch;
- ‘Plant the seed’ early on in the sale, ideally before your customer has a chance to choose a product, and factor in the additional cost of the warranty whenever you mention price;
- Ask why the customer is buying a new product, and if it’s because of a breakage then bludgeon them with warranty options and payment plans, against their will if necessary;
- Challenge them when they suggest that the warranties are a waste of money or their purchase is disposable;
- Ask the customer to ‘take ten’ (a 10-month payment plan where the customer pays nothing initially and has obligation to for 30 days);
…and that’s how you sell warranties, in a nutshell. There are some other tricks and special approaches, but that would turn this post into an article. There could be some more of this style of post coming your way, so watch this space if you’ve found this at all enlightening.