When I consider an extended warranty, I generally evaluate 3 things: the cost of the plan, the cost of servicing, and my ability to fix it myself.

Many sales people I worked with used the fear technique, and I wholeheartedly agree that this is not the best way. In my experience, people buy warranties for the same reason they buy any other product or service; it provides value and addresses a current or future need. In taking this approach you go from selling a ‘warranty’ (major stigma attached to this word) to a maintenance or service plan, the words maintenance and service imply value, and the word plan suggests an intrinsic purpose to the additional purchase. But how do you communicate this value?

I always began every sale reminding myself that people want to feel good about their purchase and believe they’re a smart consumer. This is especially important when selling an item or service they didn’t originally intend to buy. It’s important to broach the topic of maintenance/replacement/service/warranty plans early in the sales cycle as you’re discussing the primary purchase. Tie the plan to the value of what they’re purchasing:

Salesperson: “Laptops today are terrific desktop replacements, you’ll be able to do all of the tasks you had mentioned on this particular unit and it’s powerful enough you won’t grow out of it in the next 2 years. To help make your laptop experience even better, we offer an extended maintenance plan that will allow you to leverage our in house technicians if you ever have any issues. Factory warranties are pretty minimal and this will ensure you get your laptop back much quicker and we cover much more than the factory warranty. I will provide you with more details if you choose to make a purchase today.”

At this point you haven’t sold anything yet, but you planted the idea that maintenance plans can be a good thing and superior to the stock warranty. You’ve tied it specifically to the item the customer is purchasing and without using a fear statement. This sets you up much better for a close when the moment of truth arrives at the cash:

Salesperson: “Alright, so we have the laptop bag, wireless keyboard and mouse, anti-virus, laptop and did you want to go with the maintenance plan I mentioned earlier, as I said it’s a much more comprehensive plan then the factory warranty and the turn around is far quicker on any issues that could arise”

Customer: “How much does it cost?”

Salesperson: “Well the one year plan is $129.99 but we offer a comprehensive 2 year plan at $199 that is our best value. To put it in perspective, the average laptop repair is over $300. If you ever need it for anything over the next 2 years it will pay for itself and the turnaround will be much quicker. I typically don’t buy these plans on most purchases, but with laptops I feel better knowing I’m covered if anything happens.”

In my opinion, this a very effective sales technique for what is traditionally a difficult sale in retail. It starts with planting a seed, presenting the value, empowering the customer to make a decision and feel good about it, explain why the alternative to buying an extended plan presents a potential risk and of course empathize with the customer (I typically don’t buy these plans on most purchases, but…). At the end of it, the customer made the decision, is leaving with peace of mind and feels good about their experience with you the salesperson.

If people were browsing or wasting time, that was o.k. with me. But when greeting customers you must ask the open ended question. Whatever the answer, you go from there. “Hi, watcha looking for” is much more relaxing than the canned greetings. How do I know this. 38 years experience! Will this put some people off? Obviously it might. But that’s always part of the package.

There seems to be an issue of balance. How can you approach people to:
a) help the people that need it, and
b) not annoy people who don’t want help, while
c) doing your job the best you can

Seems like a tall order!