Customers Who Have Bought An Extended Warranty And … Gasp … Use it?

You approach the service counter of a typical retailer, any retailer, armed only with a defective product and the extended service you purchased on it. You recall back one year ago when you purchased the product. The sales associate spun a glowing tale of being able to take care of you and your product for an additional three years beyond the manufacturer's warranty. You were skeptical as it was explained to you about all the time, money and headaches that you would avoid if you bought their service contract. By the time they were done you were sold. You wanted the plan, you needed that plan. It was pricey, but the peace of mind it provided was well worth the investment. Besides, the sales associate was just so darn sincere.

Fast-forward one year. As you make the long walk to the customer service counter, it starts to resemble a scene right out of a Clint Eastwood western. You receive a steely look from the person working behind the customer service counter. You imagine yourself in the center of town on a lonely, empty street while tumbleweeds roll by.

On the other end of the street is someone you thought was your friend but now looks ready to draw on you once the word is given. You nervously lay down the product and place the paperwork for the extended warranty on the box. The person behind the customer-service counter looks at you first, then the box and paperwork, then back at you with a look of sheer contempt. That's when you realize you're in trouble. Faster than drawing a Colt revolver from his holster, the associate starts asking you questions meant to win this showdown:

BANG! "When did you purchase this?" BANG! "Did you call the 800# first?" BANG! "You know we're going to have to test this?" BANG! "We're going to have to send this out and determine if it's covered or not."

You stagger from the rapid fire that has just occurred. Suddenly you come to realize this wasn't what was described to you when you bought the service contract. This must be a different company, maybe under different management. No way could this be the same business that sold you that plan a year ago.

The reality is that this scenario plays out thousands of times every day across the country. The experience at the service counter is often the exact opposite of what was promised during the sale. And here's the critical business insight: a customer who uses their warranty and has a great experience will buy another one — and tell their friends. A customer who has a terrible experience won't just never buy a warranty again; they may never come back to your store at all.

The service counter is not a cost center. It's your single greatest opportunity to build lifelong loyalty. Train your service teams with the same energy and investment you put into your sales teams, and watch what happens to your repeat business.