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In an effort to increase sales, or sometimes simply compete, many companies resort to heavy discounting. While this sometimes achieves the immediate goals of increasing sales revenues, the long-term consequence is a devaluing of the product within the channel and eroding margins.
With your toughest competition a click away, the value of customer loyalty is priceless. Although extended service plans can play a pivotal role in driving customer loyalty, it continues to be a missed opportunity for many businesses.
Establishing and demonstrating service value is the better approach. This is can be particularly important when customers remove existing equipment to adjust to decreasing product sales.
The need for service to ensure the maximum availability and performance of the equipment remains, becoming more important than ever before. Extended service plans now become a vital component in the customer’s strategy to stay profitable by getting the most out of their equipment.
Demonstrating the value of an extended service plan shows how this assured service makes a significant contribution toward increasing customer productivity, profit, and in some instances, capacity. Rather than resorting to price reductions to “win the deal”, your sales team can actually sell premium service at a higher price.
Selling extended service plans requires an understanding of how the customer uses the product and the contribution the product makes to his business operations. Consequently, maximizing availability is the key to maximizing the value the customer gets from his equipment.
How do you become successful at selling extended service plans?
1. Team and Management Buy-In
If your team doesn’t understand what extended service plans mean to your company (customer loyalty, revenue, new leads for equipment sales, and ongoing business) or, if this message isn’t reinforced on a continual basis, your company will not maximize the potential. Make sure both your sales and marketing teams are aware of the benefits to your customers, so they may transfer that information effectively.
2. Communicating Value to the Customer
They must not only be aware of what the benefits of the plan are, but also understand why these benefits will save them time, money, and hassle in order for them to embrace the value of the plan. You must also ensure that you are presenting a correct, consistent message when offering the program.
Selling and the successful delivery of services can add a level of comfort and trust in your business that can lead to many years of recurring revenue and opportunities.
