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Top 5 Mistakes and Solutions for Retailer’s Selling Warranties

Historically, Protection Plans (Extended Warranties, Service Plans) or whatever you call them have had a tough go in the market.  Consumer Reports says that you shouldn’t buy them.  That consumers shouldn’t trust “Extended Warranty Companies”, that they don’t honour their obligations and that they make too much profit on selling them.

The reality is that Protection Plans provide great value for customers if they are priced right, provide the coverage that the customer needs, and if they are provided by a company that knows what they are doing.  One of the key requirements is some form of insurance underwriting to protect the customer and the retailer should something go wrong with the provider.

The problem is, most salespeople have been brainwashed and are scared to offer this valuable service to their customers because of bad press and urban myths.  The important thing is to understand the difference between reality and what everyone “knows” about extended warranties.  Let’s start by tackling some of these myths head on and try to shed some light on this traditionally taboo subject.

To be successful at selling Protection Plans, you need to understand the misinformation and the bad habits that impact sales performance.   AND, you need strategies to overcome them.

Here are the Top 5 mistakes that my team and I see on a daily basis:

MISTAKE #1: Assuming The Customer Doesn’t Want It

What does the first three letters of the word assumption spell? Exactly! Never assume.

iStock_000022362258SmallHave you ever read a book called The Secret? Basically it explains that what you think becomes your reality.  So if you are super positive and believe you will be rich (assuming you are not delusional AND you are actually willing to put in the focus and effort to achieve your goals ) you can turn your thoughts into your reality.

Industry research has proven that 25% of customers who come into your store will purchase an extended warranty if it is offered to them in a positive and professional manner.


1. Stop making assumptions – just like cables, case, installations and mounting, Protection Plans should be included in your presentation to every customer.  You never know who is going to be a buyer. Don’t make assumptions, because in most cases you are likely wrong.  If you properly qualify a customer based on their needs and their situation, you can effectively position a Protection Plan as critical part of their purchase decision.

2. Use special promotions to force you and your team to include Protection Plans in the sales process.  We used a promotion which enabled customers to get the warranty for 50% off if we didn’t offer it before check out called Catch Me and Win.  The result was a 5x increase in our attachment rate because the salespeople knew that if they didn’t present the Protection Plan, the cost would be charged against their commission.   After a few people were “caught” they started offering the Protection Plans every time and drive sales through the ceiling.

MISTAKE #2: Not Knowing The Price 

It seems obvious but its amazing how many times salespeople will try to close the customer on the sale of Protection Plan without knowing the actual price.  Of course its one of the top question most customers will ask, right after “what does it cover” or statements like “those things are a rip off” or “no thanks”.  The sales person just stands there with a stunned look on their face, and no idea what to say other than “its a good deal, can I write it up for you?”


1. Post the price on the product specification card.   Even better, quote the TV with a Protection Plan  as a total solution (warranty, cables, mount, install) and then quote it again as a monthly payment.    It’s makes the purchase seem much more reasonable for the customer

2. Create a mobile quoting tool – like the one we use with our Performance Protection Plan @ www.p3support.com    It makes you look like a total pro.

MISTAKE #3: Not Knowing What Is Covered

See above. If you don’t know the features and most importantly the benefits of the Protection Plan,  there is no way you can appear credible to your customer.  Customers make purchase decisions based on emotion, and trust in you as a sales consultant – they have to “feel” what will happen if they purchase the plan. Also, they need to “feel” what the pain might be if they don’t.  But most importantly, they need to like you and trust you.


  • Qualify your customers so you can provide a soluiton to meet thier needs

  • Use brochures and features sheets for easy reference

  • Create program checklists to help you walk through the key features and benefits

  • Use a mobile apps to provide quick reference (like our P3 Support mobile site)

  • Study – this is your business, you need to become an expert to be best.


MISTAKE #4: Waiting until the Last Second to Introduce The Protection Plan

Out of the 2,000+ locations currently offering our protection plans,I can only think of 2 that are successful when waiting until the last minute to offer the plans.  The first is a successful grocery chain, without salespeople on the floor, who have programmed a prompt for the cashier to offer the plan.  The have to virtually override the system to complete the sale.  Incredibly they still close 15% of the customers.   The other is a hard nosed retailer who will literally chase their customer into the parking lot to close the protection plan sale. Not the greatest experience for the customer but certainly effective from a sales perspective.

The truth is, if you want to really rock at selling Protection Plans, you need to take the consultative sales approach and lead the customer to their buying decision.


  1. Practice your pitch – role play with your fellow salespeople on how to present the core product and the related services.  You need to be knowledgeable, trustworthy, and credible.

  2. Merchandise the store with information that supports the value of the Protection Plan program

  3. Create promotions like Catch Me ( can we show an example of what this is in a little side bubble?  and Win and actively promote it with promotional posters, buttons, and brochures.  Don’t be scared to try different things.

MISTAKE #5: Not Believing in The Product

einsteinYou need to believe in your product to close more sales.  If you don’t, you won’t build trust with your customer and will only close sales based on fear and pressure.


  1. Get Real Feedback – Ask your warranty department for feedback on customer claims.  When you hear about “real-life” experiences customers have had, it will give the confidence that the program you are selling has value.
  2. Ask yourself – would I buy a new product without a warranty?

The best salespeople I know are passionate about the product, eager to provide good value for their customers, and know how to build rapport and trust.   Hopefully some of the ideas above help you to be more successful and build long and profitable relationships with your customers.
Scott Walker is the CEO of W3 Solutions.  A 45 year old family owned financial services and marketing company.

Top 5 Mistakes and Solutions for Retailer’s Selling Warranties was last modified: March 21st, 2016 by W3 Solution

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