The explosive growth of connected devices combined with consumer preference for retailer-brand protection plans creates a growing opportunity for retailers to boost revenue and shopper loyalty.
As connected devices become more prominent in every part of our lives, a shopper’s need for product protection also increases. Traditionally many in the retail industry have treated extended warranties and other product protection services as just add-on opportunities for revenue at the point of sale. However, protection plans are more than just an impulse buy for many shoppers. Many consumers are very savvy about their protection plan purchases—and they have opinions that retailers need to understand.
At Asurion, we are focused on driving shopper loyalty to the retailer by providing protection services that surprise and delight the shopper after the initial sale. So we wanted to fully understand how and why shoppers chose their product protection plans, to help exceed their expectations. Our research looked at important factors that shoppers used to decide where to purchase their consumer electronics, and to gain insight into their preferences between retailer-branded protection programs versus third-party programs.
Retailers may find the results surprising:
Shoppers prefer retailer-branded protection plans about six times more than third-party branded plans.
Additionally, the higher the cost of the product the shopper planned to purchase, the greater their preference for a retailer-branded protection plan. This preference is driven by a strong sense of trust towards retailer-branded protection plans and convenience since the shopper is already using the retailer for other services.
The right protection plan can also help build shopper loyalty and repeat purchases. Shoppers filed a claim with a branded Asurion plan intend to spend 20% more with the retailer that sold them the Asurion-backed plan, whereas shoppers who filed a claim through a third-party protection provider plan to spend 23% less with the retailer where they purchased the third-party plan, according to another Asurion study. Additionally, shoppers who have a product serviced through an Asurion-backed retailer-branded protection plan report greater loyalty and affinity to the retailer, as reflected in a 41% lift in customer satisfaction (CSAT), and twice the likelihood that they will recommend the retailer’s products and services to others.
Suddenly, that “add-on” purchase takes on a much greater importance—for the shopper and the retailer.
Retailers can take advantage of all these opportunities to increase shopper satisfaction and loyalty in today’s hyper-competitive marketplace. Ask yourself:
- Do our product protection plans support our brand?
- Does my customer’s interaction with product protection give them a positive experience and grow their trust with our brand?
- Once we’re competitive on price, are we doing all we can with supporting services to make the sale?
Click here to learn how branded protection plans can improve your profits.