1. Financial Strain
If you feel that having to purchase an entirely new item or making costly repairs would drain your bank account or leave you with a mountain of credit card debt, then you should definitely look into an extended service plan (ESP). It can actually enhance the value of your product as opposed to being a financial burden in the event that something does go wrong. With an extended service plan, you’re essentially transferring risk to the company that sold it to you and trading it in for peace of mind. Regardless of the product’s cost, having a smaller monthly ESP payment instead of an unexpected, large repair bill is a wise investment that can help keep you from breaking the bank.
2. Time Constraint
Another key consideration is time. An extended service plan can help: 1) Take the guesswork out of searching for a quality repair company to fix your damaged merchandise on short notice. 2) Find a replacement product and have it shipped to you in a timely manner if repair is not an option. 3) Provide you with on-site repair in many instances.
In short, a good extended service plan is designed to provide you with immediate assistance. If you are having trouble with a product, you’ll have instant access to an authorized service professional, via a toll-free number, who can diagnose the problem and help you get on with your day – right away.
3. Product Reliability
No matter how well designed a product is, nothing lasts forever. Failure is inevitable. That’s why it’s always a good idea to go online and research the potential shortcomings of the particular product you intend to purchase. Check into the long-term durability of that brand to determine its reliability and what type of coverage would be most beneficial to you.
Also, think about the implications of being without your favorite consumer appliance – whether it’s a refrigerator, television, dishwasher, washer/dryer or other durable good. If you feel that being without this specific item would be a burden to you, then an extended service plan serves as a good complement.
4. Accidents Happen
Consumer electronics have become more mobile over the years, which means that they are more susceptible to accidental damage from typical everyday use. Keep your habits and behaviors in mind as to how you use products like these. If you travel a lot or are constantly on the go, then your mobile devices could be at greater risk. And if you depend on a smartphone, computer tablet or laptop for important things like work or college assignments, just imagine how difficult it would be if you didn’t have coverage and had to spend a lengthy amount of time without them.
5. Long-Term Investment
It is human nature that we would treat a car that we intend to purchase and drive for a long period of time differently than we would a car with a short-term lease. If it belongs to us we’re more likely to keep it cleaner, buy higher-grade gasoline and go out of our way to avoid bad roads. The same can be said of any product. If you view something as a long-term investment more than simply a fleeting purchase, you’ll want to keep it operating at its very best for as long as possible.
An extended service plan is a must-have in situations like this and can be useful for items that depend on steadfast service. As always, be sure to read the coverage terms of your extended service plan to be certain that it meets your needs, and make sure that it includes a reliable repair plan to help keep your most important appliances working longer and to the best of their abilities.
For more information regarding extended service plans, visit warrantech.com or contact us today at 800.833.8801.
Filed Under: consumer, electronics, extended, finance, investments, plan, reliability, service, time
The following article by Shara Richter appears in the TWICE Guide to Extended Service Contracts, a supplement to the April 7 issue of TWICE magazine. For more information on the stories in that issue, be sure to visit www.twice.com.
The concept, image, definition and demographic of the extended service warranty have all changed substantially over the years.
Extended service warranties were meant to be insurance contracts that retailers sold to consumers to cover repairs on products that were either not covered by the manufacturer's warranty or that went into effect after the manufacturer's warranty expired. In theory this was and is still a great idea that should have protected consumers and increased profits for retailers. In the past however, the warranty business gained a mixed reputation for leaving some consumers holding the bag. Consumers were less likely to buy warranties on electronics and retailers were losing out on all the potential profits. But that is old news. Today, consumers and retailers alike are opting in on service warranties for a variety of reasons and benefits.
Today's extended warranty service plans are an upgrade from the past and offer better services for customers — whether it be in customer service, product repairs or product replacements. Shawn DuBravac, CEA's chief economist and senior director of research says "The whole service environment has changed. It's no longer just about increasing margins, but also improving the customer experience. You want your customers to be happy and to come back," he recently told TWICE.
This expanding definition may be raising the bar on consumer expectations of their warranty coverage. Some service contracts now include such perks as 24-hour/seven days a week technical support. Consumers can tap online resources that are at once intuitive and automated and give technicians remote access for real-time troubleshooting and fixes. Plus some contracts offer protection for previously uncovered circumstances such as accidental damage and typically exempt services such as installation, says the Consumer Electronics Association (CEA).
These consumer-friendly upgrades appeal to a key CE demographic, millennials. The young consumers are dependent on their mobile devices, and those products have a greater chance of sustaining drops, spills and other accidental damage precisely because of their portability. As a consequence, millennials are more inclined than preceding generations to insure their products with repair and replacement plans. CEA research shows that these consumers are not only open to buying protection plans but want to buy them to protect their most important possession — their mobile devices.
For more information about service contracts and extended warranties from Warrantech, be sure to visit http://www.warrantech.com/partners/consumer-products/extended-service-plans/.
Filed Under: Association, Consumer, devices, Electronics, extended, millennials, mobile, service, TWICE, warranties
Sean Stapleton, Warrantech President and CEO, recently took part in an executive forum with TWICE Magazine. Here’s what he had to say about the current state of service contracts and what consumers and retailers can look forward to in the closing months of 2013.
What is your fourth-quarter outlook for consumer electronics and appliance sales?
Despite recent reports regarding declines in consumer confidence, we are cautiously optimistic about product sales growth in the fourth quarter. We continue to see the mobile device category outperforming expectations. Further, recent improvements to the housing market have aided appliance sales for many of our partners.
Our belief is that consumers have prolonged many new product purchases due to uncertainty about the economy; with so much pent-up demand it is a matter of time before we see a flurry of consumer spending on new products.
Do you anticipate any change in historic Q4 attachment rates?
During the recession we witnessed increased attachment rates for extended service contracts due to a greater focus by retailers. The lesson learned by many retailers during those challenging times was that well-managed extended service contract programs increase customer satisfaction and retention, in addition to providing revenue. We believe the trend will continue on into the fourth quarter and beyond.
Which electronics/appliance categories show the most promise for service contract sales in the fourth quarter?
The mobile device market continues to lead the other categories with regard to growth. During the upcoming holiday season we expect to see further growth of the category due to continued demand by consumers for these devices. Additionally, we are seeing a very interesting growth trend for audio equipment including high-end headphones, soundbars and portable speakers. Consequently, we anticipate that service contract sales for the mobile electronics and audio equipment categories will be strong.
Will the new generation of Ultra HD and OLED TVs have an impact on TV sales and attachment rates this holiday season?
The new TV technologies are expected to provide some improvement to sales. However, unless strong marketing campaigns are unveiled by manufacturers and retailers detailing the overall improvements to the consumer’s viewing experience, growth will be limited. The trend toward higher sales of smart TVs does provide us with good reason to be excited about Ultra HDTV and OLED TV sales in the future.
We anticipate higher attachment rates for Ultra HDTVs and OLED TVs due to consumers’ concerns regarding product performance for these new technologies.
What are you doing to help retailers increase attachment rates for online purchases?
We continually share best practices with our partners regarding optimizing online extended service contract programs, including guidance on messaging, content placement and the importance of missed point of sale solutions.
Our collective experience is that online programs, while very different in many regards to traditional retail programs, share a common trait for success with their brick-and-mortar counterparts. The most successful retail programs are based on earning trust with customers during the product sale and establishing the importance of the extended service contract during and after the sales process.
How are you addressing mobile commerce?
We continue to provide a strong online service platform for our partner programs in addition to other online tools. Our goal is to allow customers to interact with us on their terms, whether it be through social media, web chat, our dynamic online claim adjudication tool or over the phone. Additionally, our solutions are designed for rapid integration with online programs.
What new products or services have you introduced for retailers or consumers?
We are excited to unveil our newest service innovation which is designed to give online shoppers white glove assistance services and information regarding their recent purchase and can be used as a platform to make extended service contracts available to the customer.
Visit our blog frequently to keep up with the latest industry news and company updates. And make sure to bookmark warrantech.com so you can learn more about our innovative products and services.
Filed Under: consumer, contracts, devices, electronics, HD, mobile, OLED, service, TV, TWICE, Ultra