Enhancing Customer Service and Profit Margins One ESP at a Time

By: Jeff Hatch

May 26, 2015

In today’s highly competitive retail marketplace, providing valuable add-on services is essential to increasing profitability and enhancing customer satisfaction. But, determining the value of an extended service plan (ESP) is often in the eye of the beholder. For some consumers, it’s seen as a security blanket, knowing their investment is protected long after the manufacturer's warranty runs out. Others, however, see warranty plans as another line item on their receipt that they can’t justify during challenging economic times. As retailers look to bolster profit margins in times of flat sales, it’s important to drive home the benefits ESPs offer consumers above and beyond the warranty terms and conditions. 
One Size Doesn’t Fit All
In light of slumping retail sales, extended warranty programs have become an essential and profitable value-add for retailers. Extended warranty plans such as product replacement programs, extended service plans, on-site service and comprehensive service programs offer distinctly different options to help customize a plan that best suits the consumer. By knowing the specifics, your staff will be better equipped to capitalize on the value these plans offer.
Satisfaction Guaranteed?
The only way to have valuable dialogue with the consumer is to have a well-represented team selling products and the services associated with them. Generally, there are four factors that go through the consumer’s mind when considering an ESP: 
1. Value of item being purchased
2. Price of extended warranty
3. Length of manufacturer's warranty
4. Length of extended warranty and date coverage begins
Through various sales tactics and techniques, your sales team can re-engage the consumer beyond the normal talking points by highlighting the services your warranty provider offers that often get overlooked: 
1. Save time and money — If a product fails during the extended term, the consumer will not have to deal with repair hassles or bills because either a replacement (delivered same day or next day) or repair of the product will be handled by the provider. Locating an approved service center by the consumer’s ZIP Code is also a valuable time savings. 
2. Ongoing support — For ongoing product support or questions about a plan, consumers can call a dedicated toll-free ESP hotline for inquiries or other details during the term of their extended warranty.
3. Trusted partner — The extended warranty plan is attached to the consumer, not the store. Since the rate of foreclosures and bankruptcies are up in today’s economy, it never hurts to point out the ownership aspect of the ESP.
The Bottom Line
The world of consumer electronics is cut throat — profit margins are slim, and prices have to remain competitive or stores lose business. For retailers, finding new ways to increase profits are not easy to come by. But, ESPs cost virtually nothing to market, take up little to no inventory space and are easy to promote. Retail personnel, especially, are in a unique position to sell extended plans to consumers because the transaction takes place live, in-person and at the point of purchase. Timing is definitely part of the sales equation, but selling value to an informed consumer provides better customer service and sought-after profit margins.

Filed Under: consumer, customer, extended, margins, plan, profit, retail, service

AmTrust Announces Solid Profit Growth For The First Quarter 2015

By: Jeff Hatch

May 06, 2015

AmTrust, the parent company of Warrantech, issued strong earnings today for the first quarter ended March 31, 2015. 
Operating earnings were $121.4 million, or $1.45 per diluted share, an increase of 24.6%, compared to $97.4 million, or $1.24 per diluted share, in the first quarter of 2014. First quarter 2015 net income attributable to common stockholders grew to $154.7 million, or $1.85 per diluted share, an increase of 54.9% from $99.9 million, or $1.27 per diluted share, in the first quarter 2014. First quarter 2015 annualized operating return on common equity was 26.1% compared to 27.8% in the first quarter 2014. Annualized return on common equity was 33.3% for the first quarter of 2015 compared to 28.5% for the first quarter of 2014. 
First Quarter 2015 Results
Total revenue was $1.11 billion, an increase of $0.16 billion, or 16.6%, from $0.95 billion in the first quarter 2014. Gross written premium was $1.73 billion, an increase of $0.24 billion, or 16.0%, from $1.49 billion in the same period a year ago after excluding from the first quarter 2014 $174 million in non-recurring gross written premium from the Cut Through Reinsurance Agreement with Tower Group International, Ltd. in first quarter 2014.
A summary of Q1 results is listed below, and the earnings release is linked below as well. Thanks to all of our employees and agents who contributed to these results. We look forward to having another strong year and appreciate everyone’s hard work in making it happen.
Financial Highlights
First Quarter 2015
Gross written premium of $1.73 billion, up 16.0% after excluding from first quarter 2014 the impact of $174 million of non-recurring gross written premium related to the Cut Through Reinsurance Agreement with Tower Group International, Ltd.
Net earned premium of $949.4 million, up 14.5% from first quarter 2014
Operating diluted EPS of $1.45 ($0.07 attributable to gain on life settlements) compared to $1.24 ($0.02 attributable to gain on life settlements) in the first quarter 2014
Diluted EPS of $1.85 compared with $1.27 in the first quarter 2014
Annualized operating return on common equity of 26.1% and annualized return on common equity of 33.3%
Service and fee income of $112.9 million, up 24.1% from the first quarter 2014
Operating earnings of $121.4 million compared to $97.4 million from the first quarter 2014
Net income attributable to common stockholders of $154.7 million compared to $99.9 million in the first quarter 2014
Combined ratio of 89.0% compared to 89.9% in the first quarter 2014
Book value per common share of $24.00, up from $22.34 at December 31, 2014
AmTrust's stockholders' equity was $2.46 billion as of March 31, 2015

Filed Under: 2015, first, highlights, Q1, quarter, revenue, Warrantech

Warrantech Sets Itself Apart From The Competition

By: Jeff Hatch

April 22, 2015

Sean Stapleton, Warrantech president and CEO, recently took part in an executive forum with TWICE magazine. Here’s what he had to say in response to the following question:
In such a competitive category, how do you stand out and differentiate yourself from amongst the competition?
Warrantech Corporation delivers customized programs tailored for the unique needs of our partners. We do not agree with the “one size fits all” approach which is becoming pervasive in the industry. 
Unlike other providers, we offer partners the flexibility of extending their brand to their service contract programs. We believe that this approach reinforces our partner’s brand and helps drive customer loyalty and retention.
Additionally, we offer extensive missed point-of-sale programs designed to enhance the relationship between our partners and their customers and drive substantial incremental revenue. 
Warrantech is also a subsidiary of The Amynta Group — one of the strongest and most financially stable companies in the industry. Recently named “2014 Best-Managed Company (Insurance)” by Forbes, their financial strength allows us to offer a unique, bundled underwriting and administration approach that most competitors simply cannot provide.
Look for the full article, as well as an overview of Warrantech, in the Extended Service Contracts supplement to the April edition of TWICE. 
And be sure to follow Warrantech on FacebookTwitter and LinkedIn so you can keep up to date on company initiatives as they happen. 

Filed Under: administration, Best, customized, Forbes, Managed, partners, programs, revenue, TWICE, Warrantech

Introducing CampersEdge, Protection For Motorhomes

By: Jeff Hatch

April 07, 2015

Warrantech is proud to now offer dealers and customers alike the finest overall RV program in the industry — CampersEdge. As industry leaders since 1983, Warrantech developed CampersEdge to strike the perfect balance between providing comprehensive coverage choices while keeping it simple to use. 
Only CampersEdge offers the flexibility to choose the coverage plan, length of coverage, number of miles covered and deductible to fit the way you drive and the budget you live with. Whether you drive 5,000 or 50,000 miles a year, Warrantech has made it easy to pick the coverage that’s right for you: 
Two Simplified Coverage Levels
- Comprehensive stated component coverage
- Exclusionary coverage
Coverage available for motorhomes, travel trailers, fifth wheels, pop-ups and slide-ins
Fewer add-on or surcharged items than found in competitive programs
New plan terms up to 7 years
Used plan terms up to 4 years
Coverage available for units up to current plus 15 model years old
Features And Benefits For Customers
Multiple time and mileage terms
24/7 roadside assistance
Coverage that meets your needs and fits within your budget
Motorhome coverage available for:
   - Units with up to 100,000 miles 
   - Units up to $500,000
Unparalleled customer service 
Deductibles: 50, 100, 200 and 100 disappearing
Features And Benefits For Dealers
Offers your customers the best coverage available
Simplified, transparent reinsurance opportunities with no hidden fees
Ability to transact business online through Warrantech’s “VSCOnline” Platform
30 minutes or less claims payment
Offers significant income opportunities from a strong, stable company that treats your business with respect
For more information about CampersEdge and other Warrantech programs, call 800.833.8801 or visit our website at warrantech.com.

Filed Under: CampersEdge, coverage, fifth, motorhomes, pop-ups, slide-ins, trailers, travel, Warrantech, wheel

Warrantech Featured In Dealerscope Magazine

By: Jeff Hatch

March 18, 2015

Sean Stapleton, president & CEO of Warrantech, recently spoke with Dealerscope magazine regarding current company initiatives. Here’s an excerpt of what he had to say in “Making the Warranty Connection,” which explores how “extended service plans are resonating more than ever with cash-careful consumers” and how Warrantech intends to give them and retailers the best deal for their money.   

Warrantech plans to expand its successful monthly protection program offered through our retail partners. The existing program, which provides monthly billing solutions for mobile device protection, is being expanded to offer comprehensive protection options for an extensive array of equipment owned by customers, regardless of where it was purchased. 

By enrolling in the program, customers will enjoy additional benefits for products purchased through the retail partner, including disappearing deductibles and in-store service. The goal is to drive both recurring protection plan sales and traffic to the participating retail partner’s stores. The enhanced offering, known as our Loyalty by Warranty™ program, will provide retailers with an innovative way to increase both revenue and customer loyalty.  

Visit dealerscope.com to read the article in its entirety and for more industry insight. 

And be sure to follow Warrantech on Facebook, Twitter and LinkedIn so you can keep up to date on company initiatives as they happen. 

Filed Under: consumers, Dealerscope, loyalty, mobile, products, program, protection, retailers, revenue, service, warranty, week

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