Old fashioned extended warranties received a pretty bad rep' but largely for the way they were sold. Modern service plans from providers like D&G have revolutionised repair protection. Not only will a successful warranty sale add to your bottom line, you will acquire a loyal and happy customer for life.

OK, people who actually ask for repair protection plans are very rare but that doesn't mean they don't want or need one. It is more likely that their minds are focused on buying a new product or they don't realise the benefits of modern plans. A great question to open with is: "Why do you want to buy a new TV or washing machine?" If it because their old model has broken down or was damaged accidentally that leads naturally into highlighting the benefits of warranty protection.

Even when it comes to a claim, there is an ideal chance to improve your customer service. If they have a service plan on the product you can reassure them that you can sort everything out. Simply call D&G's customer service line, make the introduction and hand over to the customer.

In fact, as an industry we need to stop apologising about selling repair protection. All the customer wants is working TV or domestic appliance you are in the position to offer them just that - for life. That sort of peace of mind comes with customer loyalty built-in.

Types of service plan

Three and Five Year Plans

Running for three or five years, during the manufacturers' guarantee period they also offer protection from damage caused by accident. What you are offering is complete peace of mind because the customer will never have any unexpected repair bills. With D&G plans, there is no limit to the number of claims the customer can make, our call centres never close, and if they move home the plan moves with them.

Pay Monthly Plans

Pay Monthly Plans are by far the easiest to sell. No fixed terms, no lump-sum up front and the customer can cancel at any time. Moreover, the cover is just as comprehensive as D&G Three and Five Year Plans. Sell in Pay Monthly Plans by highlighting the flexibility and low-commitment while reminding the customer that if they keep up the plan they will never need to buy replacement product again. When a product becomes beyond economical repair the customer will receive a new model of equivalent (or usually better) specification. Replacement products are always purchased by D&G though the original retailer.

Replacement Plans

The Replacement Plan makes a lot of sense for customers buying small, high-tech electronics such as MP3 players, mobile phones and camcorders. If the product breaks down, D&G pays for a replacement - as simple as that. The cover runs for three years from date of purchase and makes a lot of sense for personal devices that the customer does not want to be without while waiting for a repair.

Promotional Plans

Repair protection is a powerful incentive to buy so including a ‘free' repair protection plan can clinch the sale. Not only does it give added value to a product, it increases your customer service and has far less impact on your turnover and margin than simply cutting the retail price. Free basic repair protection plans are a great way of differentiating your store from the competition and can be used to leverage an upgrade to a full Five Year Plan as an add-on sale.

Legal compliance - what you need to know

Selling repair protection plans or extended warranties are governed by the Domestic Electrical Goods Act 2005 but the requirements to comply with this legislation are relatively simple. It is the retailer's responsibility that repair protection must be sold ethically, following these stipulations:

• Customer information leaflets must be readily available
• Leaflets should be clearly visible and close to the goods
• Price and plan duration must be clearly displayed
• Tables of prices and POS must be easily understood
• It must be clear that the cover is optional
• Customers have the right to request a written quotation
• Customers must confirm in writing they have received this quote
• You must keep all customer signature slips on file
• Quotes must remain in force for a minimum of 30 days
• Pay Monthly customers can cancel at any time with no refund
• Warranty customers can cancel within 45 days and claim a full refund

D&G plans go beyond the 45 day cancellation legislation, allowing customers to cancel and receive a full refund at  anytime within the manufacturer's guarantee period, and cancel for pro-rata refund at anytime thereafter.

Handling Objections

OK, it's not always easy selling a service plan and many customers have objections based on preconceived ideas or lack of knowledge of the types of plan now available. Just because a customer comes back with an objection it doesn't necessarily mean the customer is saying ‘no'. Think about what the customer has said and don't be afraid to ask them more questions to fully understand their objections. Don't forget that your value as a retailer is in knowing the features and benefits of all your products. Here are the four most common objections and how to handle them:

1: "I'm spending enough already, I can't afford to pay for cover"

Enquire whether it is the initial lump sum cost that is the problem. Suggest that they could break the cost down into up to 10 easy payments or have they considered a Pay Monthly Plan offering cover for a small fixed monthly fee that they can cancel at any time.

2: "The manufacture's guarantee will take care of it if it goes wrong"

Many breakdowns happen in year two or later. Moreover, most problems from two years onward are caused by wear and tear or accidents - neither of which are covered by a manufacturer's guarantee.

3: "If it got damaged I would just claim off my home insurance"

The trouble with any household insurance is that claims can possibly affect the no claims bonus and you are likely to end up paying much more in increased premiums and policy excess.

4: "I can't believe I will never have to buy another product again"

D&G ensures that plans can be renewed for the viable life of each and every product, meaning most customers can keep a plan active until the product expires, receiving a new replacement model, sourced through the retailer, when it does.

Domestic & General has recently launched a sales training DVD specifically to help retailers to improve their warranty conversion rates. ‘Selling Repair Protection Plans... Because Better Service Pays - For Everyone' is available to D&G retailers now. For a free copy of the DVD or further information on retailing D&G service plans, contact the Domestic & General dealer support line on 0870 6008088