1. Extended service plans are more important than ever to consumers who need to know
that the electronic devices they rely on in their daily lives will be repaired or replaced if
something happens to them.
And, in a world of shrinking margins on virtually every category of electronic product,
extended service plans are perhaps even more important to retailers who count on the
plans to help bolster their bottom line.
For retailers to be able to sell a product that generates high profit margins, requires no
physical inventory, and offers significant value to customer’s sounds too good to be true.
But that is exactly what extended service contracts provide — and it’s the reason that
more and more retailers continue to sharpen their focus on the category.
Indeed, the savviest retailers have come to realize that extended service plans give a
much-needed boost to their profits, commanding significantly higher margins than the
products they protect.
Equally important, extended service contracts can improve customer satisfaction and
loyalty by offering peace of mind that customers are safeguarding their purchase.

2. That peace of mind is particularly valuable to consumers investing in a high-end product
or new technology; but it is also a clear benefit when applied to any device or equipment
that consumers can’t afford to be without, whether for communication, education,
entertainment, or a host of other daily activities.
Mobile and More
The exploding category of mobile devices is clearly one such areas in which sales of
extended service contracts are strong and growing. Smartphones, tablets, and laptops are
among the top products for ESC attachment, according to plan providers. But also
commanding solid sales for protection plans are televisions, cameras, and appliances,
along with categories including furniture and even exercise equipment, as retailers diversify
beyond their traditional mix.
With all that in mind, retailers are increasingly incorporating service plans into their sales
and marketing DNA, with the goal of maximizing sales and attachments. And contract
providers are right there to help retailers clinch the sale and increase their attach rate.
Recognizing that successful service contract sales are dependent on a consistent
presentation to consumers as they purchase their electronic device or other product, one
plan executive notes, “Quite simply, sales associate training is the best thing retailers can
do to increase ESC sales.” But training — offered both in person and online, for both
management and sales — is just one of the wide range of tools that providers make
available to their retail customers.

3. Other methods of support include:
Integration with retailers’ point-of-sale systems to simplify transactions;
Visual marketing tools to put plans in front of customers’ eyes and offer tangibility;
Support for sales incentives, contests, and other promotional efforts.
Of course, service plan providers’ continual development of value-added benefits,
attractive pricing tiers, enhanced bundles that give consumers more bang for their
buck, and compelling new coverage options also contribute to the positive sales picture
for ESCs. A gradually improving economy can only help, as well.
As one plan provider states, echoing the view of others in the business: “We see
increased consumer confidence for the remainder of 2013. Our outlook is that the next
six months will see more innovation of plans, stronger solutions for support, and
growth in sales of ESCs.”
Warrantech administers and markets service contracts and after-market warranties on
automobiles, automotive components, recreational vehicles, appliances, consumer
electronics, computers and computer peripherals for retailers, distributors and
manufacturers. Warrantech ESPs are underwritten by sister company AmTrust Group
insurance carriers rated “A” (Excellent) by A.M. Best Company for their financial
strength and stability. For more information, visit www.warrantech.com.