It’s a common thought process for Independent retailers: “I can’t sell more warranties because then I would have to service them, and I just don’t make enough money in service.” But let’s try to debunk that theory. If we start by shifting our mindset away from the idea that a claim on a broken unit is a bad thing, we can begin thinking about how Protection Plans are actually great for your service department.

Step one is to truly buy into this idea: “A claim is an opportunity to provide service for our customers who already purchased a product from us.” You, the retailer, get to fulfill the promise you made when you sold the customer the protection plan by way of your service department. The fact is, that unit would have broken down regardless of if you sold them a protection plan or not. But now you get the chance to provide yet another solution to your customer.

At 50-60 points of margin, there is no arguing that protection plans are a profitable business. The industry numbers for appliances suggest that no more than 30% of protection plans sold will have a claim on them. That means 70% (or more) of the protection plans a retailer sells can be seen as pure profit. In the event of a breakdown, a protection plan ensures that you become aware of the claim and are given the chance to be the hero for that customer. The alternative could be the customer calling a third-party repair servicer and you never hearing from them again, even when it comes time for them to buy their next appliance. Further, when a customer’s product is replaced under a protection plan, they will get their replacement unit from you, giving you a chance to sell a new protection plan.

The shift in mindset from ‘claims as a negative’ to ‘claims as a chance to serve our existing customers’ is integral in making protection plan sales an important part of our service business.