How to Sell Extended Service Warranties:
Tips for Handling ESP Objections
Part 2 of 3
by Tom Egelhoff
In Part One of How to Sell Extended Warranties you learned how to present your product to the customer and include the ESP (extended service policy/warranty) in your presentation.
Selling Extended Warranties is not easy but if you can master the tools to do it your business can get a very good financial boost.
In this segment I'll discuss how to overcome some of the common objections that you and your sales staff will run up against.
Two Kinds of Objections
In sales there are only two kinds of objections. Valid and Invalid.
Most objections are invalid. You would never have gotten to the point of writing up the sale if the customer were not a valid customer.
So keep in mind that in almost 70% of the cases they can afford the Extended Service Policy (ESP) but object to it because you have not fully shown them the value of buying it.
So do not automatically assume that price is the problem. In some cases it might be but in most it's not.
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Ask For The Order
The biggest mistake that most salespeople make is simply not asking for the order.
If you've presented your product and the ESP as a team and created value in the product there should be no objections.
But if you did not create value then you will have some objections to overcome. Here are some of the most common.
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Objection #1 -
"I just can't afford that right now." I wish I had a nickel for every time I heard that and I still ended up selling them.
There are several ways of handling this one.
"Mr. Customer if I could include the ESP in the price of the unit you'd take it wouldn't you?" Answer, "Yes." So what you are telling me is that you like the program but you are having trouble justifying the cost of coverage that you might not use."
Answer, "Yes" again. "Do you realize that with labor at $50.00 per hour and parts almost as much that you could save more than the entire price of the ESP in just one service call?"
"If you don't have this coverage and something does happen to your system are you going to bring it right in?"
"Or, are you going to live with a system you're unhappy with until you think you have the money to have it repaired?"
"Suppose the problem isn't fixed to your satisfaction the first time?"
"With the ESP you can bring it in any time you feel it's not performing at peak efficiency."
"And as a bonus feature you will get the latest upgrades in parts and technology that have taken place since you purchased your system possibly giving you a better system than the one you originally purchased."
"Do you think the latest technology will cost more or less over the next 3-4 years?" "You can lock in today's labor and parts costs for the next three years."
"You can't afford not to do it."
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Objection #2 -
"I don't need the warranty, if it breaks I'll just throw it away and buy another one." This usually happens on lower end equipment and you just need to show them the error in this kind of thinking.
Let's assume that you're dealing with a $200.00 item with a factory warranty of 90 days labor and one year on parts with a $75.00 ESP for 3 years.
"So Mr. Customer, are you saying that you would rather spend $200.00 twice for a total of $400.00 and STILL end up with only 90 days of warranty?"
"How many times would you do that before the ESP makes sense?" (You might not want to ask them that.)
"Doesn't $2.08 ($75.00 over 36 months) per month make more sense than $11.11 per month to know that it will always perform at peak efficiency?" "And, if at any time it's not repairable, we'll throw it away for you and the next ones on us."
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"It's not in my budget." "Mr. Customer, isn't your budget designed to control costs?" "You will never be surprised by an unexpected repair bill."
"I may not keep this car that long." "Mr. Customer, the ESP is transferable which can actually add to the value of the vehicle at sale time."
" I think the manufacturers warranty is enough." "Mr. Customer, let me show you the parts that are not covered in the manufacturers "limited" warranty." "With my ESP there are no parts exclusions."
"I'm thinking about moving out of the area." "Mr. Customer, our plan is covered by over 12,000 repair shops in all 50 states, Canada and Puerto Rico."
There is never enough space to cover every objection and this is just the tip of the iceberg here.
Each shop is going to be different because the salespeople in it are all different. In most cases you will only hear about 4-5 common objections. Learn to handle those and watch your income rise.
My best suggestion is to discuss objections at your weekly sales meetings and learn from each other how to overcome them.
Review your ESP's coverage compared to the manufacturer and learn the strengths and weaknesses of each.
In the final installment I'll show you how to develop an in-house training program for your sales staff to make them ESP stars.
Part One - Click Here
Part Three - Click Here
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Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 406-585-0219 or PO Box 271, Bozeman, MT 59771-0271
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