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As many retailers know, the toughest obstacle to selling breakdown cover is, frequently, the cost of three or five year protection - which, as far as the customer is concerned, is something he or she hasn't budgeted for when buying an electrical appliance. Since the implementation of the Competition Commission's review of the warranty market, a number of initiatives relating to the breakdown product have found their way on to the electrical retailer's shop floor.
Of these, possibly, the most successful has been the advent of Pay Monthly, which allows the customer, literally, to Pay As You Go for service plan cover. With no big initial outlays, the Pay Monthly allows the customer to pay the minimum in terms of payment outlay but, at the same time, receive the maximum protection.
As the name suggests, rather than pay for the full three or five years for the service plan in a lump sum at the front end of the sale, customers only pay per month as they use the product. This, of course, means the customer no longer has to budget for the full service plan payment at the outset - which has often proved to be the insurmountable financial stumbling-stone to the customer opting for a service plan. This, in turn, makes the introduction and sale of service plans much easier for the salesperson - particularly when it is linked with one of D & G's New for Old plans. As the customer is covered for as long as the Pay Monthly is being maintained, this means the customer never needs to worry about buying the product again. As soon as the appliance can no longer be repaired - it will be replaced, without charge.
“Being able to quote monthly payments rather than the lump sums of three or five year cover makes the concept of breakdown cover sound much more affordable to the customer,” comments Taj Mian, director of sales at Domestic & General. “Having the convenience of being able to easily opt out of cover in the future is also a big selling plus for the customer.”
The new service, having been successfully piloted with several leading independents, was launched at the CIH Show at the NEC in September 2007 and, since then has attracted major interest amongst retailers in the build-up towards the busy Christmas period.
“The Pay Monthly Plan will ensure that customers can make a claim for a repair or a replacement appliance in almost any eventuality,” continues Taj Mian. “It includes both the breakdown of the appliance and damage caused by accidents.”
D&G is currently re-formatting its inter-active training DVD to include Pay Monthly.
The introduction of Pay Monthly means retailers using D&G now have a complete range of payment terms to offer customers. As well as the three or five-year plan payment in full, retailers can also offer a ten-month interest free option. With this facility customers merely divide the service plan cost by ten and pay monthly until the full service plan cost has been satisfied. There are no costs or interest charges with this option.
Now, with the advent of Pay Monthly, retailers can take advantage of the low monthly outlay to give their customers the most convenient and affordable payments yet. For a £200 digital camera that's just £1.99 a month!
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