Just as brands fight back to hold their value against continually changing consumer habits, so to should omni-channel retailers. These retailers know their niche market better than anyone and should seek opportunities to maximize those relationships.
You see your sales distribution and know the data points around repeat traffic, target markets and your ever-evolving inventory management. I encourage anyone reading to leverage what you know about your business and partner with a highly-qualified provider to get the most out of your service contract programs.
The benefits of these programs in today’s retail environment are well known – ranging from strengthening brand loyalty to increasing revenue. A meaningful portion of any retailer’s income, seemingly irrespective of industry, can potentially come from service contract sales. By customizing the overall service contract program and incentivizing behavior that aligns with your core differentiators, retailers can make the purchase of service contracts more efficient and more attractive to customers. This will enhance customer engagement and improve attachment rates leading to even greater revenue results.
Despite an ever-changing world, we’re seeing a consistent pattern of success for clients implementing specialized service solutions. These particular clients are making data-driven decisions on programs and offerings, and are not just deciding solely on price or commissions alone. They have taken the view that the transaction has to hold value for all constituents involved. While we gladly support their efforts, and would love to take credit for these programs, the irony is that in most cases the solutions created have been done in a highly consultative and collaborative manner. In nearly every case, the client knows where they play best and how to drive change in their business.
Consider the retailer that is carving out a niche in the specialty gaming arena. Currently offering new and refurbished equipment, upgrades, buy-back programs and repairs, this retailer needed a solution for service contracts that matched the flexibility of its product offering. By partnering with a specialty solution provider that had the willingness to help facilitate the creation of a customized service contract program tailored specifically for gamers who often build their own computing and gaming paradise, this retailer now provides a solution that better targets its customers’ unique needs. The program offers a complete in-store service solution that allows its customers same-day repairs and replacements – ensuring their gaming clients are back up and running as quickly as possible.
Customized structures can also enhance the sales environment. This is especially relevant when consistent messaging is difficult to ensure with ongoing staffing changes or needs. An indirect retail partner of ours customized a program that not only provided the necessary services for the products – such as mechanical repair benefits – but also supported in-store sales efforts with online service product information and point-of-sale displays that explained benefits to educate consumers and drive sales. This partner elected to go above and beyond what their competitors were doing in order to help drive the point home that they cared about the customer as well as this particular product set for their core business.
These types of strategic and intentional program designs tend to have lasting effects on both the consumers’ experience and the retailers’ profitability. In the best scenario, they become an extension of your brand, your culture and the expectations of your customer base.
Justin Thomas is executive VP of The Warranty Group’s recently formed North America Specialty Solutions unit, which grew out of and continues to include the appliance, technology and administration group serving prominent OEMs, retailers, financial institutions, utilities, third-party administrators and other larger companies.