With the introduction of the extended warranty for automobiles, peace of mind for drivers has never more affordable. Consumers can drive off in their brand-new or used car with the knowledge that they are protected against damage and repairs that only a few years ago would not have been covered. Financially, the extended warranty is an awesome deal for consumers who consider it a bargain to drive worry-free. For dealers, it is an even better deal financially, as most consumers actually pay more dollars for the extended warranty than they ever would for the actual repair work. Much like life insurance, you pay for the service hoping never to use it but you are very grateful it's there when you need it. However, there is much more incentive than merely financial gain for dealers to sell the extended warranty. It can also advance your customer relations by increasing loyalty, increasing customer satisfaction, and increasing the likelihood of future business with extended warranty customers.
How can an extended warranty increase customer loyalty?
The extended warranty normally requires the customers to maintain their vehicle regularly. In most cases, they will come to the dealer for free or discounted oil changes, tune-ups, etc. Each time the customer comes in, the dealer and staff get the opportunity to know them a little better, share a joke and perhaps show off new products. Customers who do not buy an extended warranty are less likely to revisit the dealership, meaning there is less opportunity for future sales.
How does the extended warranty increase customer satisfaction?
The happier a customer is, the more likely he is to return to your place of business. When a customer comes in for major repair work and you give them a bill for $0 they leave extremely satisfied (even if they've paid double that amount on the extended warranty). A satisfied customer is without a doubt one of the best ways to increase business. Remember, every time a consumer makes a report on social media, all their friends and followers will have instant access to your customer's opinions on your business. Positive word of mouth in the technology age is one of the best ways for a business to promote itself. More people trust the opinion of their peers than any expensive advertising.
How can an extended warranty increase the likelihood of future business?
When a customer buys an extended warranty, they are also buying loyalty to your business. They will come into your shop for repair work, browse in your show room and talk to your staff. This means they will have the opportunity to know and trust your sales people and you are far more likely to be their first stop when they're looking to buy a second car or to replace their current automobile. They are also far more likely to bring in their children, their parents, or friends who are looking to purchase a vehicle.
Selling an extended warranty is much more than just making a few bucks up front. It's about giving your customer peace of mind, it's about creating loyalty and satisfaction, but mostly it's about setting your business up for the future. It's simply a terrific way to create customers for life.
Share16 May 2016
After our family sedan died, I realized that we needed to focus on finding a new car. I was really frustrated because I had no idea what was out there or what would work best for my family. I started focusing on finding a car that was large enough, and that simple action really made things a lot easier for me. I tracked down a dealership that had mid-size and large SUVs, and I was able to find the right car. This blog is all about narrowing down your car choices, so that you can enjoy your new car and keep your family safe.