With the cost to acquire new customers on the rise, new competition emerging around every corner, and customer loyalty declining, today’s ecommerce merchants often struggle to build strong customer relationships and remain top of mind for consumer needs.
However, merchants that shift their attention to improving the customer experience will create a distinct advantage over their competition. By meeting customer needs with value-added services like free shipping and product protection, merchants can stand out and continue scaling to new levels of success.
The biggest players recognize the value of offering product protection and are already making big money from it. In 2021 alone, it’s estimated that sales of AppleCare hit $8.5 billion, a 20% increase over 2020.
Product protection could give your business the value-focused boost it needs to enhance the customer experience and build loyalty — while driving incremental revenue for your business. But offering protection plans on your ecommerce website is only part of the equation; selling them is another.
Follow these best practices to help you sell product protection plans.
Before we jump into best practices for selling product protection plans, we should offer a simple definition. In the simplest terms, product protection is exactly what it sounds like: protection for a purchased product.
Product protection plans are sometimes structured as service contracts or extended warranties. Depending on the plan, service contracts protect large and small items like electronics, jewelry, furniture, etc. Some plans complement the manufacturer's warranty, while others pick up where it leaves off when it expires.
AppleCare covers what their manufacturer’s warranty doesn’t, particularly accidental damage. If a customer drops and damages their iPhone, AppleCare steps in for a repair or replacement so the customer isn’t left to pay for it themselves. This is product protection.
Of course, there are more detailed specifics about all that makes up product protection, but this is a summarized explanation of product protection.
Offering product protection is a bonus for your customers, and it creates additional value for your business, too. Product protection:
“I think having a product protection option — whether someone purchases it or not — is instilling trust. The rate of attachment we have is almost exactly proportional to the increase in conversion rate, which indicates that customers were on the edge of buying and wouldn’t have made a purchase if it wasn’t for the protection plan being available.” — Ryan Pamplin, Co-founder & CEO, BlendJet
These days, we’re seeing an increase in the number of shoppers ready to switch brands for any given reason, be that product availability, shipping options and costs, or an unsatisfactory experience with customer service. McKinsey reports that COVID-19 alone drove more than a third of customers to shop with new brands.
But merchants that prioritize the entire customer experience will win. To maximize the value and benefits that come with product protection on your ecommerce site, you have to know how to sell them. Follow these best practices to increase your protection plan attach rate and increase the lifetime value of each customer.
When a customer visits your website, you only have around 10 to 20 seconds to capture their attention before they bounce. It’s mission critical to make sure every bit of information is thoughtfully placed so the shopper can make an informed purchase decision. The same applies to selling product protection plans.
There are three places a merchant should feature protection plan offers to drive attachment:
Internal data from Extend merchants shows that the interstitial modal can drive 2x the amount of program revenue than without it. Similarly, placing a protection plan offer in a customer’s cart view can bump average order value up by 6%.
To have the most success selling protection plans on your site, make sure they are thoughtfully placed. The merchants with the highest attach rates and average order values leverage all three placements.
As you might guess, making terms and conditions available to customers before they purchase is a regulatory requirement. It’s also a good business practice.
However, when given the chance to review terms and conditions related to buying a product or service, most consumers will click through without reading them. In fact, a clever 2020 survey conducted by ProPrivacy.com resulted in 99% of respondents giving up naming rights to their first-born children — all because they didn’t read terms and conditions!
The most likely explanation for why people skip reading them is that terms and conditions are generally too long and too boring to read all the way through. Ideally, consumers shouldn’t have to pretend they’ve read through terms and conditions; they should be accessible and easy to understand.
A simple way to do this is to highlight the most important information, as the jeweler My Trio Rings does with a page dedicated to their Extend product protection plan.
My Trio Rings also includes a section for frequently asked questions, as well as a link to the comprehensive terms and conditions.
A brand’s messaging is its first opportunity to demonstrate value to a customer. Product protection is a value-added service that benefits the customer by protecting their purchase, but to gain buy-in, you must explain its value from the start.
Infuse your ecommerce site with value-focused messaging. More than that, center your website imagery and text around how the customer’s life will be positively impacted by buying product protection along with their product.
For example, merchants that have partnered with Extend can showcase Kaley, our online claims specialist that’s available 24/7 and provides most claim decisions within minutes. Kaley doesn’t require a receipt to access claim information.
That saves customers time and keeps them using their products with minimal interruption.
Say a customer makes a purchase on your website, but they didn’t add product protection — that might feel like a missed opportunity. But it doesn’t have to be.
You can use the time period after a customer makes a purchase on your site to both strengthen your customer relationship and drive product protection sales through post-purchase email, in-box offers, and more (as permitted by applicable law).
Here are some strategies.
A good example is BB Wheels, a retailer of tires, wheels, rims, and accessories, which features Extend product protection on their homepage. The badge is clickable and directs users to a detailed info page.
Modern protection plan providers grow with your business, identifying and adjusting to key opportunities for increased plan attachment and an enhanced customer experience.
Specifically, Extend works with merchants to optimize plan pricing, messaging, visual representation, and even program coverage as needed.
But to take full advantage of all optimization opportunities, you need to know what metrics to track:
When you partner with a modern protection plan provider like Extend, you’re set up with a merchant success manager who will check in with you regularly to talk through plan performance, goals, and opportunities — including optimization metrics and related strategies. The objective of this relationship is to help you sell as many protection plans as possible. To put it another way: when you win, Extend wins!
Offering product protection is more than just a revenue driver for ecommerce merchants; it’s a tested value-added service that improves the customer experience and builds brand loyalty.
There are many providers who will promise merchants high profits for a small investment of their time and effort. But only modern protection plan providers like Extend can deliver a speedy, tech-first implementation process, ongoing merchant success check-ins and optimizations, and a scalable model that prioritizes customer success and overall business growth.
Selling protection plans shouldn’t be a challenge, but an easy opportunity to delight your customers.
To learn more about offering Extend product protection on your ecommerce site, click here to schedule your free demo.