Sunday, February 15, 2009

Selling Replacement Warranties

I have had a request from Robert who works for Staples in the States seeking information on how to sell replacement warranties? My response to him was along these lines -

"In Australia I used to do a lot of work with "Office Works" which has a similar product range to what you sell at Staples.

They had 2 programs - a replacement program for all products below $500 - premium a flat 20% and then a repair or replace program for products over $500 with individual carded pricing.

Overall the pricing at Staples is similar except Office Works operated on a percentage basis where you have a rate card.

Replacement Warranties - we used to sell them at POS (Point of Sales) and on the floor. From my experience they are probably the easiest warranties to sell.

Golden Rules -
  • Ask everyone
  • Don't prejudge the customer
  • Give them the opportunity to buy
  • Be yourself
  • Be positive
  • Believe in the product

Process - (the following is a mixture of processes you could use at POS or floor sales - vary around the lead in for floor sales - it is very important to be yourself and find words you are comfortable with - there should be enough here to give you the intent)

  • Greet

Remember to smile - look them in the eye

  • Acknowledge/Reaffirm customers purchase

"That's a great printer we sell lots of those"

  • Ask a qualifying question

"What happened to your last one?"

  • Introduce Warranty

"Has anyone spoken to you about our replacement warranty program?"

"The good news is for only $X (or less than the equivalent of $X per month/week) your printer qualifies for an extra years replacement warranty - in other words if it breaks down in the extended warranty period we will give you a new one"

"Did you know that qualifies for our replacement warranty? In other words for only $X you are protected against breakdown in the next 2 years (manufacturers warranty plus extension) and if you are unlucky enough for it to breakdown we will give you a new one."

"Did you know this qualifies for our wear and tear warranty? If it breaks down in the next 2 years through wear and tear we will give you a new one?"

  • Close the Sale

"How does that sound to you?"

"Would you like me to include that with your purchase?"


  • Always clarify the objection by asking a question e.g.

"Why is that?"

"Tell me more?"

"What exactly do you mean?"

"Why is that important to you?"


  • Restate the customer's objection back to them in your own words to ensure you have a common understanding, then respond to the objection

Isolate it - " Is that your only concern?"

Example Objection

"It is only $50 if it breaks down I will get a new one!"

  • Ask a question

"How long do you expect it to last?" (they often will say something like it will be lucky to last the manufacturer's warranty period)

  • Listen to the answer and respond

"Gee, If it did break down I don't know where you would be able to buy a replacement printer for only $X. I know what I would do!"

I hope this helps some of you.

Sunday, August 31, 2008

Building Customer Loyalty

Today instead of talking about warranty I am going to talk about one of my pet gripes - after sales care and building customer loyalty.

One of the things that Electrical Appliance Retailers are not good at is building customer loyalty.

Now that may seem hard and yes it is a generalisation but over the years having visited many retail stores from the slow moving department stores to the fast moving pure appliance retailers I have found it really just doesn't happen!

We tend to love them, get the cash and then leave them. Is there any wonder they choose to go to a competitor or be very price conscious when the next time they come to buy. It is interesting when you ask someone where they bought that Fridge, washer or TV and half the time they just don't know! Is that a warning? Is it telling you something?

Go into any big ticket area in the store where sales are slower and you tend to find sales people who have been working in that area for centuries - very experienced and good at what they do.

What I have found they always seem to have lots of free time on their hands but do they use it to best advantage? No! These people can be like gold in your organisation if they develop a personal brand and develop a reputation for advice and service. Repeat sales will follow.

Alas many don't!

With most big ticket sales there is a delivery involved and so the sales person will know when the new washer or plasma is being delivered so why not use this to your advantage to develop a reputation for care and concern for the customer.

So why not take this sort of approach -
  1. Ring the customer to reconfirm delivery, day, time, etc..
  2. Ring the customer the day after the delivery to check that the appliance has arrived alright.
  3. About 2/3 days later send the customer a card and thank them for the sale.
  4. Two weeks later ring the customer to
  • check that the appliance is running all right
  • ask if they got any questions on the operation of the appliance
  • ask if they have any other concerns
  • use it as an opportunity to mention any other relevant promotions (depending on the customer and what you learnt from them while in store)
  • ask for referrals - do they know of anyone who maybe looking to buy a similar type of appliance.

The reason I suggest asking for referrals is that when ever someone gets a new appliance they tend to skite about it, show it to friends and often it will come out in the conversation that they are looking for a new appliance.

Now if that happens what are they going to do? First of all if you have been doing the value adding which I suggest, they are going to talk about you. They are going to talk about the sales person who has rung them up, sent them a card, made sure they are all right. Why are they going to talk about you? Because you will be an exception! No body in the industry is doing this, and if they are it is very rare and so you are setting them up to talk about you.

5. One month after purchase send out a customer satisfaction survey with a reply paid envelope.
6. When they return the survey, send them a thank you letter but include with it an offer for them to earn say $50 off their next purchase no matter what value of purchase for just referring one new customer to you who spends more than say $500. The referred customer would also get $50 off their purchase.
7. Ensure the customer is invited to any future special buying nights and receives other special preferred offers
8. Get the customers birth date so you can send a birthday card - must be handwritten
9. Send the customer a Christmas card or other special occasion card

Now what have I done - built a customer loyalty chain and I am sure you can think of ways of improving it.

Now this may sound a lot of hard work - but build a diary system and it becomes easy. Don't forget you do this during the down times in the day/week.

The goal is to get the customer to come back and buy from you, which means more commissions and more profits for the store. Take a long term view of the relationship and you will win.

A common comment I used to get when I would suggest this was "the customer may not be happy, they may have a complaint, I don't want to know about it, I might have to fix it!"

Sorry tough! You are better to talk to the customer, help them through the issue and you will have a friend for life! The alternative is to have them bad mouthing you, your store, your product all around town. I know what I would prefer.

Some of you may have concerns about paying for referrals as suggested in 6. Can I suggest this in response. You are only going to pay out when a customer actually buys, but you have got the customer thinking about you and so you are building top of mind awareness for future promotions.

The other thought is appliance retailers spend thousands of dollars on advertising each week and spending $100(retail cost) to bring some one to buy a larger appliance is actually cheap marketing as it only costs you a postage stamp to send out on a targeted basis and you only pay when the referred customer actually buys. The other way is to spend thousands on advertising with no guarantee of return.

This way you are acquiring a new customer that could then be feed into your targeted customer loyalty program and the cycle goes on. So you can see it is very easy to build a chain of regular customers but you need to make them feel loved and special.

Finally, I am reminded on one of the world's top sales people - Joe Girard - a car salesman who sold something like 77 cars a month with no fleet sales. He used some of the techniques I am talking about here and many more like learning the customers favorite music and then having it in the car so when the new owner turned on the ignition they were in "heaven!"

Check out for more of his story and sales ideas. He has some great books and training resources.

Friday, August 15, 2008

Make Sure You Ask for the Sale!

This may sound very obvious but you will be very surprised how many actually don't listen for the signals and actually ask for the sale.

The key rules are:
  • Ask for every sale

  • Don’t prejudge the customer

  • Assume in every sale the customer is going to buy

  • Treat it as an exception when they don’t buy

  • Be politely assertive

  • Be enthusiastic and positive about the product you are selling

  • Focus on benefits and how the customer is going use the product not the price

  • Watch for key buying signals e.g. change in distant to friendly relationship, change in pace of talk, questions about price, credit terms, delivery, timing, etc

  • Carefully pick your timing

  • Always be closing – it is not uncommon to ask 5 times during the sale in different ways

You could use these techniques -

“Why don’t you give it a try?”

“Can I help you with it to the cash register?”

“Will that be cash or charge?”

“Why not save yourself some money and take the warranty today?”

“What have got to lose? This qualifies for our 30 day satisfaction guarantee if you take it today”

Happy selling!

Wednesday, March 19, 2008

Brian Tracy's Tip of The Week

In my ecourse "The Secrets of Selling Warranty" I strongly recommend Brian Tracy's book "The Art of Closing the Sale" as an invaluable resource to those working in sales and in particular those working with the sales of warranty.

Below is an excerpt from this book on objections.

Nine Objections You Must Answer:

1. Unspoken Objections
The first type of objection you will get is an unspoken objection. The customer has concerns with your offering but doesn't tell you anything. He or she nods and listens to you, but you get no feedback to tell you where you are or how you are doing.

The solution to unspoken objections is to let the prospect talk more. Ask open-ended questions, lean forward, and listen intently to the answers. The more a prospect has an opportunity to answer your questions, the more likely it is that she will tell you exactly what might be holding her back from buying.

2. Excuses, Excuses
The second form of objections is excuses. These are usually instinctive reactions to any sales approach.

"We already have all we need."

"We are really not interested at the moment."

These are just excuses. They are really not serious. The best salespeople nod, smile, agree, and then ask a question to take control of the conversation. The very best way to handle any initial sales resistance, including excuses and impulse is with these words: "That's all right. Most people in your situation felt the same way when I first called on them. But now they have become our best customers, and they recommend us to their friends."

This response immediately shifts the focus of the conversation away from your product and onto other satisfied customers. It almost invariably triggers the response you want: "Oh really, What is it, then?"

3. Malicious Objections
Then there are the malicious objections. Because you call on many different people, you will occasionally call on individuals who are unhappy or angry about their current situations. Since they cannot shout at their bosses or spouses, they take it out on the friendly salesperson. These people tend to be negative in their demeanor and behavior. They criticize your product or compare it unfavorably to those of your competitors. They sometimes imply that you charge too much or that your product is not pf particularly good quality.

The way to deal with malicious objections is to realize that you are not the target. The person you are talking to has problems of his own that have nothing to do with you. You are just caught in the emotional crossfire between him and other factors in his life. You job, as a professional, is to remain calm, confident, positive, and polite throughout. Very often this behavior on your part will soften the negativity of the prospect and eventually encourage him to open up to you.

4. Requests for Information
The fourth most common objection is a request for information. This is the best type of objection for you to hear, because you know how to answer this as well or better than any other part of your presentation.

Whenever a prospect asks for information about the results or benefits she will get from your product or service and how she can get them, you are moving into excellent field position to make a sale.

Use all your objection-handling skills. Welcome the objection. Compliment the person for asking the question. Thank her for bringing it up. And then answer it completely, ending with, "Does that answer your question?"

5. Show- Off Objections
Another type of objection is the show-off objection. Sometimes prospects try to show you how much they already know about your product or service. They make sophisticated observations or ask you complex questions about your product, service, or industry.

When this happens, respond by taking the low road. Show how impressed you are by how much the prospect already knows. Dominate the listening and let the prospect dominate the talking. Be conciliatory and polite. Remember, when you make a prospect feel important by listening to him with rapt attention, he is much more likely to warm up to buy from you.

6. Subjective Objections
The sixth most common type of objections are subjective or personal objections. These objections are aimed at you as a person. Prospects say things such as, "You look like you are doing pretty well in this business." Ort "You seem to be making a lot of money selling this product."

Whenever a person becomes critical of you, it could be a sign that you are talking too much about yourself. The prospect is attempting to bring you down a little bit by criticizing your appearance or behavior.

When you find yourself talking too much about your company, your product or service, or your personal life, stop and ask a question. Start talking about the customer rather than yourself. Ask questions about what the customer wants and needs. Make the customer the center of attention, and the subjective objections will stop.

7. Objective Objections
You may also hear the objective or factual objection. These are directed at your product offering and the claims that you make in terms of what it will do for the customer. The prospect may say, "I don't think that it will do the job that we require." Or "It looks good, but it's not satisfactory for our needs."

If you can answer an objective objection, you can often get the sale. The very best way to do this is to provide testimonials an other proof that make it clear that your product will do what you say it will. Assure the prospect that she will get the benefits that you promise and you have just made it easier for her to buy from you.

8. General Sales Resistance
The eighth most common form of objection is what we have called general sales resistance. This always occurs at the beginning of a presentation. Until you neutralize the general sales resistance, the customer will be listening to you with a closed mind.

Lower initial sales resistance by using the approach close. Say, "Mr. Prospect, thank you very much for your time. Please relax. I'm not going to try to sell you anything today. All I want to do is ask you some questions and see if there is some way that my company can help you achieve your goals in a cost-effective way. Would that be all right?"

When the prospect relaxes and gives you permission to ask him questions, you immediately begin your preselected open-ended questions to qualify the prospect and find out what he really needs that you can provide for him.

9. Last-Ditch
The final most-common objection is called the last-ditch objection. You have make your presentation, and the prospect clearly sees how she would be better off with your product or service. She knows and understands what you are selling and how much you are asking. She is on the verge of making a buying decision, but she still hesitates.

"How do I know I'm getting my money's worth?" she might say. Or "Are you sure this is the best deal I can get?"

Listen with respect; then assure the prospect that yours is an excellent product or service, at a good price, and that everyone else who is using it today is very happy with their decision. You have then overcome the last-ditch objection.

To get a copy of this book
click here


Sunday, March 9, 2008

The Art of Closing the Sale: The Key to Making More Money Faster in the World of Professional Selling By Brian Tracy

Have you seen my recent review of Brian Tracy's "The Art of Closing the Sale" posted on

"If you are working in Retail or Direct Selling the techniques for framing and closing a sale are all here.This little book is literally worth thousands of dollars in sales commissions if only you would stop and apply some of the well proven ideas in this book.
The ideas are simple, well proven and easy to apply.

I have trained literally thousands of sales people in the Retail Electrical Appliance Industry in Australia to sell extended warranties. I encourage them to use some of the techniques in Brian Tracy's book and have literally watched individuals sales figures skyrocket over night as a result.

If I was a business owner or sales manager working in sales I would give a copy of this book to every team member and then use it as a focus for team meetings and skills development.

Highly recommended"

To see this and other highly recommended books click here.


Tuesday, February 26, 2008

Getting Price Shoppers to Buy!

One of the challenges in working with consumer electronics is the price shopper! They have recognised what you sell is a commodity and so they just want you to give them a price. They have been on the internet and checked out the prices, they have been down the road and knocked on your competitors door and know it all! They just want a price.

Does this sound familiar? I am sure it does.

The question is how do you respond to this?

Most retailers just give the ship away. They immediately just “drop their pants” and go down to the most common level which is price. It is easy to compete on price. In fact why do you even need a sales person if that is what you are going to do! You might as well just put a bank of machines in the store where the customer enters a price and it automatically responds with a price that is lower!

Yes, I am being smart, but the reality is if your total focus is on price you are on a natural road to disaster as margins are squeezed to a point that even with manufacturer rebates gone, so are you!

So one thing is critical is that you train your sales people to handle price shoppers so that they stop and buy with you! But not only do they buy the product that they came in for but you use the opportunity to sell another at the same time also.

So how do you do that?

By asking questions!

In my eCourse “The Secrets of Selling Warranty” I teach a couple of techniques for deflecting price questions. One is by asking “Is price your only concern?”

Sadly, most sales people don’t ask this! They think it is too contrived. In fact what am I getting them to do? I am giving them a simple way or system if you like for getting them to understand what is important to the customer!

Customers only buy for their reasons! Not yours!

You can give them all the features and benefits under the sun! But if you are not talking in their language and thought patterns they won’t buy.

So you must train your staff to have a questioning system in place that gets to know your customer. What is important to them? What is their situation? How, why, where or what are the using the product for? Don’t assume you know. Ask lots of questions.

Have they shopped with you before?

Are they responding to a promotion?

Have they been looking for long?

Where have they been looking?

Have they used the product before?

What happened to the last one?

What didn’t you like about your last one?

What did you like about it?

When would you like to take delivery of it? (Timing can be very important)

Would you be able to install it?

How long do you want to keep it? (Good warranty intro)

What other brands have you been looking at?

The questions are limitless! The value and information they bring you the sales person are invaluable.

By asking questions you will get to know what the customers concerns are. What are their fears, frustrations, wants and needs? You will also get to know how valuable this customer is to you now and in the future.

Armed with all this information you can then position/ package the sale of your product or service so that price is not the main decision criteria.

Focus on delivering value in the customer’s terms and you will win every time!

Know Your Numbers!

For Commission Based Sales People Working in Retail

I get absolutely amazed at the number of commission sales people working in retail that do not simply know their key sales figures. Then they wonder why they never make commission or never grow their income figures.

Why do they fail? Basically because they drift! They never go that extra mile! They never focus on the end result! They never think about how they can help their customer by finding add on solutions and thus growing their income.

So how do you change that?

Firstly, the sales person must believe they are working for them selves. They need to change their hand out mentality. Instead they need to take total ownership, accountability and responsibility for their role as a professional sales person. This means they must plan for their success. Be totally responsible for their results and be responsible for their own personal development. They need to stop being excuse merchants but to take total responsibility for their outcomes. After all they create their own destiny and have the power to change their income.

Secondly, they must plan for their success. This means setting goals. Many hate the “G” word. If you don’t know where you are going how will you know when you have got there. One of the most powerful things that you can do to build your own self esteem is to set goals for yourself as you can then measure your success. Not only does goal achievement make you feel good about yourself but achievement will flow in to making you feel more positive about your job and how you treat your customers. This will flow into making you more successful. As they say “Success breeds success”.

Setting goals for yourself, and I am not talking about boss imposed goals provides you with a great way of accessing your own performance. If you are under performing then it is like having a car that is misfiring. Do you need a tune up! In sales if you don’t know your numbers daily then how do you that your sales machine is misfiring. Once you know your numbers you can then take remedial action or seek help before it is too late. Where are the gaps in your performance? Are you asking enough customers for the sale? Are you having difficulty closing sales, handling objections, have enough product knowledge or having difficulty in building rapore with your customers?

What ever the problem unless you are measuring your performance daily you are setting yourself up for failure and the disappointment at the end of the week, month or quarter when the boss says ‘Sorry Fred. You have not made your sales targets so we are unable to pay commission this month. What a pity you only missed your target by $30.”

If you know your numbers you can quickly compensate for the low days but also stretch yourself further so that you do get that pay rise or promotion. Why drift when by knowing your numbers you can quickly help yourself to rise above all your peers and lead the field in your chosen career.

Finally, doesn't it feel good when you exceed your sales goal. You immediately feel more successful and those who feel good about themselves always go on and do more!

Monday, February 11, 2008

Business Owners Don't Buy Tax Deductibility

To be successful at selling anything to business owners you need to think like a business owner, not an employee. Sales people often struggle with this concept as until you own and run a business yourself some of the concepts are foreign.

The sales person tends to focus on the features of the product rather than address the key benefits to the purchaser’s business.

The classic statement a sales person will make is that the cost of this widget is tax deductible. Blah! Anything purchased for use in the business is tax deductible. Wake up! So what if it is tax deductible! It is a cost! A cost, is a cost, is a cost!

The businesses core reason for being is to make profits for their shareholders or proprietors. Selling something on the basis of increasing a cost does not make any sense to a business owner and in fact will dilute the respect they have for your advice.

Business owner’s buy for three key reasons

  • How can it reduce business costs?
  • How can it improve revenue?
  • How can it improve business efficiency? In other words how can what you are selling improve profitability?

Of course there are other things a business owner will consider like service, convenience, processing times, past experiences and a multitude of other issues. Of all of these things the key reasons a business owner will buy will always come back to these three core reasons listed above.

So when selling to business owners all benefit statements need to be expressed in these terms –

“With our replacement warranty the cost of replacing a faulty printer during the extended warranty period can be reduced by 80%”

‘The cost of replacing the ink cartridges on this printer is 30% less than the nearest comparable model”

“The new Microsoft Office package has many forms and templates available which will save you time and help improve the efficiency in you office”

Sales people tend to make the classic mistake of trying to sell on price rather than focus on what that widget can do for the business expressed in terms mentioned above.

If you understand the key customer benefit, want, need, fear or frustration and then communicate your solution in a way that addresses those key things you are well on the way to creating an irresistible reason why a customer should buy.

The golden rule in selling is to think like a customer, put yourself in the shoes of your business customer and watch how over night your sales results will grow.

Wednesday, February 6, 2008

Handling Price Rises

Everyone hates a price rise!

"We can’t do that!", " It is too expensive!", " No one will buy that!", " We are uncompetitive!". The comments go on.

Interestingly having watched warranty sales people over many years handle pricing and product changes it is the sales person who has more problem with the price change not the customer.

Prices change daily up or down with any other tangible product with hardly a murmur but when it comes to the intangible product, “the warranty” all hell seems to break loose!

Sales results immediately plummet! Sales people stop asking! Confidence is gone over night!

Why is this? I guess over the years we have trained sales people to have great empathy with our customers. To put themself in the shoes of the customer so they can then position their sales presentation that satisfies the customer’s needs and wants and at the same time overcoming customers fears and frustrations.

The reality is the sales person is turning their thoughts “It is too expensive! No one will buy that! We are uncompetitive!” into their reality. In essence we all create our fears from our thoughts and so don’t take action because we are more scared of the perceived outcome; “They won’t buy that! Or, they are going to complain about the price.” In other words the salesperson has created a blockage to action in their mind which flows through to their words stopping them continuing to present the product in a positive light.

So how do we overcome this?

First the sales person needs to understand what is happening – their thoughts are creating their reality. Remove the negative thought and replace it with positive ones and overnight you will see a change in performance. You need to change the underlying belief levels.

This is a very powerful concept to understand and can be life changing for many people. Not only for selling warranty but all parts of life. Many people fail in life to achieve their dreams as they have already created their reality by thinking and focusing on all the reasons why they can’t do something, rather than thinking of the end result and all the positive things that will bring.

You can change many of these negative thoughts by

  1. Developing positive self talk – "This warranty is cheap", "I am really looking after the customer by showing them the benfits of the warranty!", "We have got the best warranty in the market place!"
  2. Holding a team “Grist Session” to get out all the issues, to develop positive strategies going forward that help each other develop a positive mindset
  3. Create the right atmosphere that encourages a positive, supportive and fun loving, achievement orientated team
  4. Regular one on one coaching – this is very powerful and often overlooked and under valued

The other reality which is often overlooked by sales people is that the warranty is not being bought by the same customer every day. In other words your customer on average only buys a new Plasma or Fridge once every 5 years or so, and the customer doesn’t know the warranty price. Only you the salesperson is aware of any changes. Not the customer.

Remember the customer doesn’t buy price! They buy the benefits. Focus on the benefits and value the warranty brings. Not the price! In Part 2 of “The Secrets of Selling Extended Warranty” e-course I teach you how to understand those benefits. You can sign up for the course at the top right hand corner of this blog.

I look forward to hearing your thoughts.

To your sales success!


Sunday, January 20, 2008

Early Notice! "The Secrets of Selling Extended Warranty" e-Course is coming!

Yes, the finishing touches are being added!

The technology is being primed!

The testing is being sorted!

I am on the verge of delivering to you a global first!

A way that will help you to sky rocket your warranty income!

For the first time I am about to spill the beans and reveal to you "The Secrets of Selling Extended Warranty". Many of these strategies and techniques have never been told before.

When you are in store training you are always under time pressure to get a sales person back on the selling floor. As a result short cuts are taken and the training process is rushed.

Your boss is on your back to sell, sell, sell! But you don't know how!

So now we are going to give you an in depth day by day look at the process of selling warranty and boosting your income.

Yes, we are going to give you access to a 14 day e-course that will take you step by step slowly through the process. Imagine each day for 14 days you will receive a personally addresses email to you in your inbox which focuses on just one small part of the sales process.

Each day you can focus, apply and refine the one step and after 14 days you are well on your way to success.

Watch this site over the next few days and more will be revealed.

Register Early for notification of "The Secrets of Selling Warranty" e-course by sending an email with your name and email address to and get a surprise early registration bonus.

Don't forget to tell you friends to register too!

To your success!

Alistair Gray


Thank you for visiting and stopping by.

Firstly, I should briefly introduce my self. My name is Alistair Gray and I am a specialist trainer in the art of selling Extended Warranty in the retail electrical appliance market.

I have literally trained thousands of sales people in the art of selling warranty with some of Australia's largest retailers.

My total focus is about helping young people be more successful in their sales roles, by encouraging them to set goals and to focus on their own professional learning and development.

I have been directly associated with the industry for over 6 years. It is now time with the advent of new technologies to share some of that experience with you and the wider global community.

The goal of this site is to provide you access to training resources that will help you significantly boost your income and sales performance. Not only directly in regard to warranty sales though that will be the main focus but to other resources that will assist you in excelling at your job.

My next post will tell you about some of the exciting news that is on its way.

To your success.