Vision - November/December 2008 - (Page 31)

Fear Factor Quite a few accessory sales are nobrainers. If a customer buys a 60-inch plasma TV, for example, a purchase of $5,000 or more, a retailer should introduce a surge protection device that will protect the display. “Savvy retailers understand that in order to get the best performance and protection for a home theater or A/V system, clean, on-demand power is necessary,” says Richard McCarthy, CEO of Richard Gray’s Power Company in New Orleans. “While it sounds a bit ominous, fear is a big factor in marketing power accessories. Fear that a $20,000 purchase could be rendered worthless from a lightning strike. Fear that a system won’t perform to its capabilities because the refrigerator, dryer and microwave are all on the same circuit. Sometimes a doomsday scenario is all it takes to seal the deal.” McCarthy warns against exaggerating risks simply to make a quick sale. But educating consumers about protection (whether for service plans or accessories) can be an effective way to gain customer trust and business. “Accessories are not just little luxuries that may or may not improve the quality of a system,” he says. “They serve speciﬁc purposes and can actually save a customer money and aggravation in the long run.” One way to introduce accessories is to advertise FAQs about many common A/V issues that can be remedied with add-on products. Common complaints, for example, are audio hums, scrolling video bars and overheating. “This will allow the customer to identify which issue is affecting their system and immediately point them to an accessory solution,” says McCarthy. “All accessories were designed with a preventative or performance-enhancing purpose in mind. With a little explanation, and sometimes a horror story or two, most customers will appreciate the recommendation and their system will beneﬁt because of it. Likewise, a retailer potentially can eliminate a costly service call in the future while improving their margins on each sale.” Lee from Monster Cable tosses the ball into senior management’s court, saying retailers need to make accessory sales more of a priority. “In our economy, you’re not going to get more consumers into the store,” he says. • www.CE.org CE Vision got the scoop on service plans with NEW Customer Service Company’s Senior Vice President of Client Development Joe Romano. A 25-year veteran of the industry, NEW is an independent third-party adminis trator of extended service plans, buyer protection services and product support programs. With headquarters in Dulles, VA, the company protects the purchases of more than 150 million consumers annually. Check out our Q&A below to gather tips on integrating service plans into your business. What are some ways retailers can introduce service plans? Listen to the customer, introduce service plans earlier in the sales process and make the plans’ beneﬁts meaningful to the customer by explaini ng how they will use the product they are purchasing. How can these plans beneﬁt consumers? Consumers can purchase extended service plans for the conven iences they offer and to protect the value of their investment for an extende d period of time. With one-call convenience and 100 percent coverage for parts and labor with no deductible, extended service plans offer considerable peace of mind to families on a budget, especially in an uncertain economy. If a product needs to be repaired, the plan provides convenient service by qualiﬁed repair technicians. And if a product is beyond repair, the plan will replace it at no additional cost to the consumer. What incentives exist for retailers to sell service plans? For retailers, offering extended service plans gives their customers an option to protect their purchase while giving the retailer an additional revenue stream, a way to build loyalty through the delivery of great service and increas ed touch points across the product ownership experience. Additionally, the service and support offered, particularly troubleshooting and set-up, are effectiv e in reducing product returns. And by offering a solution for post-sale service and parts, the plans can help ease the customer concerns that may arise over unfamiliar manufacturers’ and private-label products. What are some examples of products where service plans may be especially important? Several factors deserve consideration when purchasing consum er electronics and the extended service plans that protect them. Portable product s, such as laptop computers, MP3 players and GPS navigation systems, tend to experience more wear and tear and beneﬁt from extended service plans, especially ones that include accidental damage protection. Extended service plans are also important for products that are subjected to frequent use, such as cell phones, gaming systems and computers. Consumers ﬁnd the in-home service feature of the plan especially attractive for installed products, such as wallmounted ﬂat-panel TVs and built-in household appliances, becaus e returning them to the retailer or shipping them to the manufacturer can be a real hassle. What about new products? Consider added protection for consumer electronics that are new to market, especially those with enhanced features, such as iPhones and the new OLED TVs. For consumer electronics manufactured under a private label, extended service plans provide additional assurance that the product will be repaired or replaced regardless of parts availability. Know It All November/December 2008 31 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - November/December 2008

Vision - November/December 2008 Contents Shapiro's Spectrum In this Issue The Economist C4 Trends Going Global Visionary CES Unveiled Eco-Intelligence Is Vital in a Sustainable Global Market XGP— A Game Changer Enhancing the Tech Experience High-Definition Decade Public-Private Partnerships CEA Newsline Tech Speak Tech Policy Eye on Business Market Insider Just the Stats

Vision - November/December 2008

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