Product Protection

How to Sell Product Protection Plans

Aaron Sullivan
March 25, 2022

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.

Product protection defined

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.

The value of product protection to your business

Offering product protection is a bonus for your customers, and it creates additional value for your business, too. Product protection:

  • Improves the customer experience. Turn a negative customer experience (like accidentally breaking a product) into a positive one with a simple claim filing and hassle-free repair or replacement.
  • Drives purchase conversions. Internal data from Extend shows that merchants can see an overall increase in conversions of 11% or more by offering product protection plans. 
  • Motivates brand loyalty. The most effective modern protection plans, including those offered by Extend, keep customers using their products by offering efficient repair options or by sending customers back to a merchant for a product replacement. They can then purchase another protection plan with their replacement product, further extending their lifetime value to a brand.
  • Increases consumer trust. When customers see a protection plan is offered alongside a product, they gain peace of mind. This helps with their purchasing decision; Assurant reports that offering extended warranties can increase a customer’s intention to purchase by around 25%.
  • Creates incremental revenue. Merchants receive a portion of each protection plan sale, plus the potential to benefit from a new sale if a customer purchases a replacement product through an approved Extend claim.
“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

Best practices for selling product protection plans

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.

Place protection plan offers where customers will see them

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:

  1. Product description page
  2. Interstitial modal
  3. In-cart

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%.

Placing a protection plan offer in an interstitial modal can double program revenue. 

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.

Include clear terms and conditions

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 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 highlights important information from their Extend Product Protection plan on a dedicated web page. 

My Trio Rings also includes a section for frequently asked questions, as well as a link to the comprehensive terms and conditions.

Highlight the value and convenience for the customer

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. 

Continue engaging after the sale

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.

  1. Send post-purchase emails. Reach out to customers who didn’t purchase product protection and remind them that it’s not too late to protect their new product.

    You can also take advantage of key milestones on the customer journey to motivate a product protection purchase:
  • At delivery
  • At manufacturer warranty expiration
  • After product first use

Nest sends a dedicated email to inspire customers to purchase product protection.

  1. Incorporate in-box offers. Inside the product packaging, include protection plan information and a call to action to learn more and make a purchase. This could be a specific URL, a QR code, or even a phone number that routes a customer to your customer support.
  2. Leverage digital marketing. You can explain the importance of product protection for specific purposes in a blog post or various social media posts. Similarly, add product protection reminders to specific areas of your website like a dedicated landing page and/or homepage announcement bar or banner. 

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.

BB Wheels features the Extend product protection badge on their homepage.

Optimize as necessary

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:

  • Attach rate
  • Program revenue
  • Average order value
  • Conversion (i.e., What kind of overall conversion rate have you seen since protection program offers went live?)

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!

Partner with a modern product protection provider 

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.
Aaron Sullivan
Aaron Sullivan is senior content marketing manager at Extend. He specializes in writing about e-commerce, finance, entertainment, and beer.

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