wcm 2016 selling extended warranties
TRANSCRIPT
®
“Secrets to Increasing The Sale of
Extended Warranties”
Michael R. Blumberg CMC
President, Blumberg Advisory Group
®What we do…
• Blumberg Advisory Group is a full service management consulting firm specializing in the Aftermarket & Reverse Logistics Service Industry
• Our capabilities include:• Strategic & Business Planning
• Market Research & Customer Satisfaction
• Benchmarks & Best Practices
• Productivity & Efficiency Improvement
• Systems Design, Evaluation, & Recommendation
• Mergers & Acquisitions
• Expert Witness
• Founded in 1969 & Headquartered In Suburb of Philadelphia
• We posses broad industry expertise
®Experience & Credentials…
• Over 25 years Industry Experience
• Worked in all aspects of Aftermarket Service & Support • Warranty Management• Reverse Logistics &
Returns Management• Depot Repair & Field
Service • Service Logistics• Tech Support• Asset Recovery &
Liquidation• E-Waste & E-recycling
• Broad Industry Focus• IT/Telecom• Consumer Electronics &
Appliances• Medical/Scientific
Instrumentation• Process Control & Plant
Automation• Building Controls &
Automation
• Vertical Market Experience• Healthcare• Retail• Manufacturing• Banking
®
Reasons for lackluster sales of Extended Warranties
• Sales people don’t ask
• Sales people are not properly trained on how to sell them
• Sales people are not property incentivized
• Value proposition is not clear
• Warranty coverage doesn’t meet customers needs
• Not priced properly
• Customers don’t think they need them
®Keys to Improving Sales
• Design warranty to meet customer needs
• Utilize Market Research
• Employ conjoint/Trade-off Analysis
• Consider Value In Use
• Provide options
• Basic Package
• Upsells
• Develop Optimal Pricing strategy
• Cost plus vs Competitive vs Value in Use
• Consider billing periods – monthly or annual
®Keys to Improving Sales (cont.)
• Remember that it’s a sale – upsell
• Follow a structured & disciplined approach to marketing & selling extended warranty
• Promotion to customers through marketing collateral & direct communications
• Sell beyond point of purchase
• Align with entitlement process
• Frequently & timely communication on value proposition & benefits
®Keys to Improving Sales (cont.)
• Position product sales & service people for success
• Train them on value proposition & sales process
• Provide rewards & incentives
• Utilize gamification if possible
• Implement robust CRM and Analytics
• Track and measure sales effectiveness
• Spot trends and patterns with attachment rates
• Correlate service events with attachment rates
• Re-evaluate pricing and coverage
• Report usage to customers to reinforce value
• Maintain warranty expiration dates
• Launch renewal campaigns
®
KPIs associated with Selling Extended Warranties
Attachment Rates
Renewal Rates
Percentage of Service Revenue
Year over year
Revenue Growth
®
Performance Improvements from Implementing Best Practices
KPI Percent
Improvement
Attachment
Rate
53.6%
Renewal
Rate
76.5%
% of Service Revenue
From Extended Warranty
37.5%
Year over Year
Revenue Growth
50.0%
®Benchmarking Methodology
• Specify Targets
• Create action plan
• Implement
• Review
Improve
• Problem Areas
• Processes
• Peer Group
Identify
• Compare
• Define Gaps
• Specify differences
Analyze
• Internal Metrics
• Industry Data
Collect
®
For more information about our services contact
500 Office Center Drive Suite 400Fort Washington, PA 19034
Email: [email protected]
Phone: 1 (855) 643-9060
Website. www.blumberg-advisor.com