NEW YORK – How have extended-service plan (ESP) attachment rates fared online, where the influence of a sales associate is absent? TWICE put the question to the industry’s leading ESP providers:
Jennifer Monasterio, Mack Worldwide Warranty: The online consumer is a savvy shopper purchasing without the aid of a sales representative. Due to this, we have launched multiple software packages that assist e-commerce retailers in attaching warranties without ever having to pick up the phone. This has made e-commerce one of our fastest growing sectors. Our dealers who use our APIs [application programming interfaces] have seen 10 times the growth in sales compared to simply listing the warranty as an accessory on their website.
Chris Smith, Service Net: These two distribution points have typically produced significantly lower attachment rates for extendedservice plans. There are select retailers and mobile sellers that are effectively leveraging customer intelligence to strategically position service contracts in the purchase path and achieving attachment rates that are appreciatively higher than the norm. Companies such as Newegg support their consumers’ buying decisions with online videos and other rich media to educate and provide confidence to consumers.
In the mobile space, the rising reliance of these products among consumers and the convenience of having an extended-service plan is a major driver in exceptional attachment rates, which can be as high as 50 percent.
Joe Romano, NEW: What we have seen with our clients is that, contrary to conventional wisdom, the online attachment rates of the best merchandised plans often equal the attachment rates of the same plan when sold in-store. As we extend our best online practices to a mobile environment, we expect those attach rates to be equally as high.
Sean Stapleton, Warrantech: The lack of human interaction dictates that the service plan must be presented through concise marketing materials, which captivate the consumer and quickly convey the service plan’s value. If the message is not specifically designed for these channels and presented properly, attachment rates can and will suffer.
Charles Pipia, Global Warranty Group: Ecommerce and m-commerce have helped us extend our reach to consumers. Launching our new product, FreeBuyBack, has allowed us direct-toconsumer mobile device text and email opportunities and an added channel for growth potential.
Michael Frosch, The Warranty Group: Ecommerce has impacted low-cost replacement plans, as there is no one to explain their value. But the take-rates of mobile and portable products, where consumers are looking for accidental damage coverage, do very well.
Brett Menke, general manager at Bankers Warranty Group: Increasing e-commerce and m-commerce popularity means more consumers are purchasing extended-service plans in an unassisted sales environment where the services provided by the plan need to speak for themselves.