The Warranty Group, the global warranty and underwriting resource, has released a comprehensive study of consumer attitudes and purchase behaviors toward extended service contracts, and the findings are eye opening.
The year-long study was conducted worldwide, and queried consumers ages 18-70 who had purchased appliances, automobiles and tech products within the past 12 months.
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In the U.S., 700 consumers were surveyed about their purchases, which covered 14 product categories including TVs, mobile phones, computers, cameras, gaming systems, major appliances, exercise equipment, lawn and garden equipment and power tools.
Despite mixed consumer press about the efficacy of service contracts, nearly one third of respondents bought a protection plan for their tech and appliance purchases on average, the poll showed.
Attachment rates were highest for exercise machines (54 percent), major appliances (41 percent) and digital cameras (32 percent), and lowest for mobile phones (28 percent) and computers and tablets (22 percent each).
Attachment rates also rose in accordance with consumers’ familiarity with service contracts and how they work — suggesting that greater investments in consumer education can pay financial dividends to retailers’ and manufacturers’ warranty programs, TWG marketing VP Bob Bean observed.
Conversely, those who passed on extended warranties tended to believe their new products would last longer before needing a repair than did their service-plan-purchasing counterparts.
The good news for retailers and vendors: The study found that consumers who bought a service plan along with their new appliance or device were generally more satisfied with their purchase than those who didn’t. The disparity was greatest among buyers of dishwashers and exercise machines, the survey showed.
The study — U.S. Appliance & Technology Consumer Market Research Report — was commissioned by TWG and conducted by Ipsos, a Top 5 global research firm. TWG considers it to be one of the most comprehensive market research studies conducted by the extended service contract industry on consumer attitudes toward tech, appliances and automobiles, how customers shop for them, and the service plans that protect them.
For more information, contact Bean at [email protected].