How to Sell Extended Warranties Service Pack Extended Warranties Non- Physical Extended Warranties 1
Agenda Product Definition Customer Benefits Anticipated Attach Rates Target Customer Positioning Why APC Extended Warranties Critical Power & Cooling Services APC-MGE - 2007 2
What are Extended Warranties? Two types of Extended Warranties Service Pack Non-Service Pack Each offers the same service and benefits to the customer, but uses a different delivery mechanism for the entitlement Service Pack Extended Warranty A physical product that represents a service Stocked and sold just as a UPS would be sold Used for concurrent sales 1 or 3 years of coverage beyond the factory warranty Non-Physical Extended Warranties Non-physical product Ordered on a drop ship P.O. Used for large orders and non-concurrent sales 1 or 3 years of coverage beyond the factory warranty Critical Power & Cooling Services APC-MGE - 2007 3
What are the benefits to my customer? Features One or Three Years of additional product failure coverage Dedicated 24 X 7 Customer Service Support with Toll Free Call-in Telephone Number Next Business Day Shipment Service Warranty Certificate Warranty Duration Options Benefits Provides peace of mind and complete factory warranty protection for up to six years. Extended Warranty customers are provided with a dedicated toll free number and priority call handling. Calls are handled 24hours a day, 7 days a week by call center professionals. Extended Warranty customers receive upgraded shipping status, which means, next day shipment of the replacement UPS, battery, or parts. APC evens pays the return shipping for the used UPS or battery. E-mail Service Entitlement Certificate provides a detailed record of the service registration, along with the service expiration date. The One Year protection option offers the lowest cost solution, while the Three Year option offers the best value solution. Critical Power & Cooling Services APC-MGE - 2007 4
What should be my Attach Rates? Industry standards show us that attach rates for Extended Warranties increase along with the value of the product they cover. KVA Range Anticipated Attach Rate > 500va 3% 500va 1500va 7% This is your sweet spot 1500va 3000va 17% 3kVA 8kVA 21% 8kVA 16kVA 27% If your current attach rate is less than the recommended percentages, there is significant opportunity for increased revenue! Critical Power & Cooling Services APC-MGE - 2007 5
Who is my target customer? IT Customers SMB to Enterprise Purchasing Single Phase UPSs to support PCs, Workstations or Servers Who are worried about downtime and continuity of service to their internal customers Service Pack Extended Warranties are designed for customers purchasing individual or small quantity orders They are only sold concurrently Non-Physical Extended Warranties Your sales should focus be sold will be anytime a customer purchases large on Service volumes of Pack entitlements or wants Extended to renew Warranties an existing entitlement Critical Power & Cooling Services APC-MGE - 2007 6
Why should I sell extended warranties? Or What s in it for me? Selling an Extended Warranty is an easy way to add to top line revenue and increase your average order size 1 Year Extended Warranty end user pricing is typically 10-12% of the product price a nice addition to any order They offer an opportunity to strengthen your relationship with your customer through increased contact during the warranty period And at expiration, it offers an opportunity to contact the customer to offer a renewal or to upsell additional products and services Critical Power & Cooling Services APC-MGE - 2007 7
Why APC Extended Warranties? Warranties from third party providers may be cheaper but cannot offer the quality and reliability offered by the manufacturer. Manufacturer offers factory certified replacement parts, for quality parts availability As well as a dedicated technical support team that has direct access to the engineers that designed the equipment, for accurate diagnosis and repair And priority access to the Manufacturer supply chain and logistics for faster delivery Critical Power & Cooling Services APC-MGE - 2007 8
How do I position an Extended Warranty? Service is a natural addition to any product sale To sell most effectively, should be offered at time of original product sale Market research shows that the number one reason a customer did not purchase an Extended Warranty is that it was not offered to them at the time of equipment sale! Offers the customer one or three years of additional coverage for extended Peace of Mind. In the unlikely event of a failure, APC will repair or replace at no additional cost. Batteries will always fail over time. This service covers the cost of replacement batteries, plus any other failure that might occur. Without an Extended Warranty, these things must be paid for separately. Critical Power & Cooling Services APC-MGE - 2007 9