Warranty Wise

Back from another Trip

So funny. I just got back from another trip and what voice mail did I get, “hey man are you ever home?  All I ever read in your blog is you are going somewhere like Vegas or New York or Bike riding in the Sierras?  Yes, you may have noticed that I took a little vacation….Bike pedals worked just fine…..

While I was away, I stayed in touch with my contacts asking about a plethora of positions on insurance and underwriting for the bike industry….what a challenge….it seems that if we want to sell accidental damage there may be a challenge unless it is sold as an augmentation to a service plan or replacement plan.  If we want to sell maintenance there is not a challenge.  We can take the approach of having the customer join a bike repair membership program that if the part of the bike breaks the part or the entire bike will be replaced for free as long as they understand that they replacement part or bike belongs to the membership, not them……then we have to ask, what do we do about consumables like tires and things like intertubes?

What a trip…what to do….

Here is what I think.

IBD’s, (Independent Bike Dealers) need to offer maintenance….they need to offer it all.  Big retailers should offer the same plans they offer on Consumer Electronics, but with two options, either with or without consumables coverages…..

I’ll be getting going on pricing now so if you want anything else added in chime in soon.  There are 15 million bikes sold each year in the USA alone.....Think we can tap into this?

Selling ESP with DPS

Going back to my early days of sales I was fortunate enough to be trained by a guy name Jules Gilbert.  His partner in training Jack taught us that sales was an honorable profession.  What that means is if you learn your products and practice your trade with the customers best interest at all times, you are being honorable and deserve the same respect as any other profession.

They used a visit to the doctor’s office as an example and taught us Diagnostic Prescriptive Selling…D.P.S.

Think about it, if you visit a doctor he doesn’t prescribe a medicine or procedure without asking a few questions.  If he did you would think him a whack job.  He or she asks, what is wrong, how did it happen, how long have you felt like that, does it run in the family, on and on.  As you answer their questions they are diagnosing your condition or need.  That enables them to prescribe the correct fix. Some do it better than others just like in any profession, but generally there is a trust and respect because if this process….

Selling of ESP and the associated products is no different.  If a customer comes in for a computer and you don’t ask what they are using it for, what happened to the last one, what their environment is and a host of other questions and just try to sell them whatever you want instead of what they need, they will consider you a whack job and walk out. You do ask a series of questions so you can diagnose what they need and prescribe the appropriate product to benefit them the most….that is the right way of honorable selling and if you do that you will earn respect and sell lots of ESP to boot.

Practice DPS as a general way of selling….it works…..as a reminder, have a look at this Jackson Browne video…..even if it isn’t about selling it is a great tune with Doctor in it…..maybe it will remind you to use DPS.

http://www.youtube.com/watch?v=pCTYxIsLThA

Dare to be Different—Hold on to What you Got

Square Trade made the extended warranty business about price….different in perceived value.

Harbor Freight made their extended warranty business about over the counter replacements on tools…different in convenience for people that need a tool to get the job done.

Hyundai made their purchases include IUI, (Involuntary Unemployment Insurance) where you can get relief of payments if you lose your job….different in Peace of Mind.

Assurion enables Verizon and others to put the mobile phone coverage right on the bills….difference in affordability and close rates.

Many companies now offer accidental damage on your tools, laptops or other products…different in your oops coverage….

What else can be done to make your program different?   Don’t let anybody tell you that you can’t offer what you think your customer needs.  It can be priced. It can be administrated.

Want to make a difference?  Always build your programs to the benefit of making a difference in your customers’ lives….that will enable you to get new customers, but as importantly hold on to the ones you got!

This may be a stretch, but I have always dug this video by Bon Jovi I found on You Tube.  Oldy but a goody.   

http://www.youtube.com/watch?v=lDK9QqIzhwk

Customer Experience…When I break down

What do you think of and automatron digitally saying, “please press this if you need this” instead of a live person asking, “how can I help you”?  I for one hate it.  Are they efficiencies and cost savings in setting up a tree of questions that is based upon Frequent needs, maybe.  I say maybe because I can not believe that a company who prefers to give good customer service would utilize this method of steering you instead of having a human.  I will always do business and continue to do business with companies that use real people instead of robotic solutions.

In the warranty business this is especially important because people begin their call with a problem to be solved and paid for the solution in advance….

If you lead a company, ask yourself, “How do customer drop offs pencil out”?

 

Have a listen to these songs as hint to what I am saying and always remember the line, “When I break down…..”  Alan Parsons band really knew how to write them and compose them.

http://www.youtube.com/watch?v=3NnQ8HCYoVQ

and just for grins and giggles and a little syncopation, listen to IRobot

http://www.youtube.com/watch?v=NQi-OSXznrY&feature=fvsr

Tell Me What you Want

Today, call your top ten customers.  Ask them to tell you want they want?  Beg them. Plead with them.  Implore them to be honest.  They are your best Quality Control and if you do not think that is true, watch your barriers to the competition fall and your business go away.

The warranty business is an interesting business.  It amazes me how many times over the years I have heard, “The only clients we have ever lost are ones we didn’t want anyway”, or “that guy was on the take” or, “the loss ratios were so high it didn’t matter”, or what have you.

Maybe it was because you weren’t listening.

Ask.

Replacement Plan Options

What type of replacement plans do you offer your customers?  Did you decide by what benefitted them the most or what made it the easiest on you and your company?

1.      Over the Counter/In Store

2.      Mail In and Wait for a Replacement or Gift Card?

3.      Advanced Replacement Mail In

4.      Hybrids or combos of the above

This week we will explore a variety of options and terms out there today.  Think about your programs and your competitors programs.  Each have operational advantages and disadvantages.  Each have consumer satisfaction advantages and disadvantages.  Each have benefits and risks.

Guarantee or Warranty

What do your guarantee?  What do you warranty?  Here are definitions according to the on line Encarta Dictionary.

Guarantee:  a formal promise that a product will be repaired free of charge if it breaks or fails within a particular period or that substandard work will be redone.

Warranty:  a guarantee on purchased goods that they are of the quality represented and will be replaced or repaired if found to be faulty.

I laugh when people try to tell me there is a big difference. You can look up and memorize all the other legal definitions of these words and no matter how hard you try, you still will not defer your customer from expecting you to stand behind your product, your extended warranty or any promise they believe you have made when they gave you their money.

Do the right thing always and you will enjoy the benefits of raving customers.

Check out this video opening of the Spike Lee monvie “Do the Right Thing” with Rosie Perez featured in the opening credits.  I am not sure it will remind you to stand behind every thing you do, but it sure is entertaining!

http://www.youtube.com/watch?v=dyDWNT0TnZE

Managing Is Marketing and Sales…You Ought to Know

If you want to be an effective manager with your Extended Service Program, (or anything for that matter) you ought to know.

You ought to know:

• Your goals, attach rates and results numbers
• Your benefits for the customers
• Your pay programs for your employees and you
• Your competitions’ programs
• Your employees ideas for improvements
• Your most effective approach to selling so you can help your crew be effective

If you don’t know, you ought to know!  Otherwise how are you going to succeed?

Have a listen to Alanis Morissette as a reminder.  This is a pretty strong version.

http://www.youtube.com/watch?v=dR6mEu5-egA

The Five R’s

So often in our travels we see managers who struggle managing their ESP programs within their stores.  Years ago, and previously in the blog, we have posted the 5 R’s.  No they are not Reading, Riting and Rithmetic.  These simple steps are easy to remember, easy to follow and guarantee success.  You can even see a little video on my own website:  http://www.warrantyconcepts.com/video.html in the video “Pirates of the ESP”.

 

• Require the Use of the Brochure
• Require the Use of a Script
• Review the Qualifying Products
• Run and Review the Previous Day/Week/Month Figures—Acknowledge Good, (Publicly) or Bad, (Privately)
• Run and Review Goals for the Day

Memory Assets VS New Energy

employees motivated to sell ESP.  The can sell with aplomb if they put the effort in, but they seemingly choose to bomb.  On the flip side, it is notable to watch excitable new employees sell with PPP with abandon often to bomb because they do not have the experience how to properly present or handle objections. However, the newbies often outsell the long-termers because they try.

 

How do we get experienced employees to sell with abandon and aplomb?  Aplomb versus bomb.  How do we get the new people trained well enough to sell with abandon and aplomb?

 

Put them together.  Mirroring, Shadowing, whatever you want to call it.  You can not replace experience with on line or written training.  However, make your choice wisely.  The teacher needs to tap into the energy of the student, not drain it or dull it.  This assignment can rejuvenate the one with experience that there is so much positive to share.

 

How are you communicating this and managing this important part of running your business?  Is all about the mix and proper balance.

 

Watch this old Milton the Monster Opening.  Talk about memory assets.

 

http://www.youtube.com/watch?v=4S13Dpt1U_g