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Whatever Happened to Standing Behind Your Products and Services?

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Remember the days when you purchased a product or service and the company actually stood behind its wares? Well, looks like those days are waning. Unless, of course, you buy the product insurance! Now, there's a great money-making rip-off.

It seems like more and more retail outlets are getting wise to the concept of marketing their own product insurance. And is this because they are thinking about you,  the customer? Doubt it. This additional revenue must add decent profit to the bottom line because many stores have incentive programs for their employees. The more insurance they sell, the more bonuses they make.

I can somewhat understand this concept when it comes to electronic, electric, and other goods with microchips or moving parts. It seems that appliances, computers, and other big ticket items just don't last as long as they did in years past. But, my friends, get this. Have you ever heard of insurance on shoes?

When Sports Authority sold me a pair of New Balance tennis shoes in December of 2009, I declined to purchase the added insurance, which can run up to $16, depending on the cost of the shoes. That's supposed to cover usual wear and tear for up to one year. Do they think I'm nuts?

Well, two months later, the shoelaces completely fell apart, so I went back to the store to ask for new laces. The manager took a look at my bill and reminded me that I hadn't purchased the insurance and that the warranty was only good for 30 days without it. But ... this time only, he'll let me have a pair of new shoelaces (worth $2.49 in his store). Gee, what a pal. After exploring the Sports Authority website, I discovered that shoelaces are not even included in the warranty, so I'd be out of luck anyway. Besides, the floor sales rep handed me the wrong lace length after I showed him the shoes, so the replacement laces were useless.

But, the bigger picture here is ... what happened to standing behind the products they sell? Has manufacturing gotten so bad that retailers need to add this insurance to protect themselves from the multitudes of returns? Shouldn't retail buyers ensure that the products they buy match quality for price?  The guy in front of me at the store spent $155 on Nike runners and declined the insurance. If his shoes fall apart after 30 days, does that mean the store will tell him he's out of luck for $155 shoes?

Why aren't these retailers standing behind the products they sell and then dealing with their distributors or manufacturers after they look after their customers? If consumers continue to accept this practice and it becomes more commonplace, wouldn't it make sense that more and more retailers will jump on the bandwagon?

So, what do you say? If you've paid for product insurance, do you think you got ripped off or was it worth it? If you didn't, is it because you think it's a rip-off or did you prefer to take your chances? Share, please!


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A Canadian who relocated to the U.S., Elaine Fogel is president and CMO of SOLUTIONS Marketing & Consulting LLC, a boutique marketing and communications agency located in Scottsdale, Arizona. During her career, Elaine has worked for, and with, many organizations, associations, and businesses, across North America, on marketing strategy and communications tactics.

From her earlier agency career assignments freelance copywriting Procter & Gamble, Nestlé Carnation, and Kraft materials, to “inside” senior-level marketing positions, Elaine’s passion for marketing has evolved to helping clients reach new heights through strategic brand-building, integrated marketing communications, and customer orientation.

She has been a contributing writer for The Business Journal and her articles have appeared in many publications, including the Stanford Social Innovation Review, Marketing News, The Arizona Republic, Advancing Philanthropy, and several association publications. She has been interviewed by CNN, Connect Magazine, and The Capitol Times, and her content was included in Guerrilla Marketing for Nonprofits by Jay Conrad Levinson, Frank Adkins, and Chris Forbes. Nonprofit Consulting Essentials by Penelope Cagney. and Share of Mind, Share of Heart by Sybil F. Stershic.

Elaine is a Faculty Associate at the Arizona State University Lodestar Center for Philanthropy & Nonprofit Innovation and a professional member of the National Speakers Association – she does keynotes and presentations on business and nonprofit marketing, branding, customer orientation, and cause marketing at conferences and meetings.

Elaine’s career has also included stints as a cookbook author, teacher, singer, and television show host. A golf and tennis enthusiast, Elaine is enjoying life in the sunny Sonoran Desert while serving clients across North America.

Solutions Marketing & Consulting: solutionsmc.net

Speaking: elainefogel.com

Elaine's Blog: http://elainefogel.net

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  • by rogier van der veen Fri Mar 5, 2010 via blog

    Hi Elaine,
    Great post, and oh so true, not only for shoes I'm afraid! And marketers are wondering why there is no more loyalty!

  • by Paul Barsch Fri Mar 5, 2010 via blog

    Elaine, enjoyed this post. I think another issue of importance is counterparty ability to pay. Specifically, imagine you buy "insurance" for a product at a store. Does that mean that the company you bought the insurance from will have the ability to pay when the time comes?

    What if you bought insurance from a product at Circuit City - and suppose they didn't outsource that insurance but provided it themselves. You are out of luck! Insurance- of any kind - is only as good as the ability for your counterparty to pay. That holds true whether it's product insurance, car ins, life insurance or credit default swaps!

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    Thanks, Rogier. It appears to be a growing trend - one I don't relish as a consumer.

  • by Alison Heath Fri Mar 5, 2010 via blog

    On the other hand, there is tremendous opportunity here for businesses that are willing and able to give great customer service. A local running shoe store, for example, could promote free laces for the life of the shoe.

    When we spend all of our time as marketers worrying about advertising creative, social media strategy and shrinking budgets, we forget that great customer service just requires a little time and attention to detail.

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    Thanks, Paul. You are so right. Especially now, people have lost trust in companies and institutions that used to have solid brands. Insurance, of any kind, now means it's a gamble for both sides!

  • by Don Fri Mar 5, 2010 via blog

    Hi Elaine,

    Yes insurance is on the rise. Of course we all rush along to the next merchant (big box?) who has the lowest price ... but oddly we pass on by the local merchant who does stand behind his/her product because they weren't as cheap. What I am trying to say is we are creating our own problem by always shopping on cost alone.

    I buy my running shoes at one of three local running stores for example:
    The Runnery - http://therunnery.com
    Striders - http://stridersrun.com
    Gazelles - http://gazellesports.com

    Occasionally I'll also go to MC Sports (which is a regional company based locally) - http://mcsports.com/

    (Having said all of that I not to recently did by a pair of basketball shoes from Eastbay and they were excellent when we had a problem -- and no I didn't have insurance, but that was more because we couldn't find what we needed locally in that instance -- but I'd go back to them -- however in the running market trying them on and jogging/walking/running around a bit before buying them is important to me.)

    In all cases I've had good service. If I didn't, being equal distance, I could simply prefer one over the other. In fact about a week ago I was talking to one of the guys at The Runnery about a customer who lived next to Striders but came to his store. He basically told them they should go buy shoes at the local store in case there are any fit or other issues. The customer was floored much like the old Macy/Gimble bit in the Christmas Movie Miracle on 34th Street.

    So if you want decent service leave price down on your chart and go somewhere where you have a relationship, or buy the insurance because those big box/non-local corporate folks won't care in most cases.

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    Yay, Alison! Great point. Independent retailers and competitive stores may sell the same shoes for a higher price, but may provide an amazing brand experience AND stand behind their products. It will be interesting to see what plays out in this environment as a result of the insurance. Will consumers stay brand loyal to stores like Sports Authority, or walk?

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    Thanks, Don! My reply to Alison crossed paths with your post. I still think there are plenty of consumers whose first priority is price. But if the service sucks, or they feel ripped off, they may eliminate that retailer from the list when they consider their next purchase.

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    Big news, guys. My hubby's tennis shoes fell apart after four months of playing an average of three days a week. He purchased them at Big 5. http://www.big5sportinggoods.com/

    He went in to buy a new pair today after tripping on the court this morning. Once the manager looked at his old shoes, he gave him FULL credit on the new pair of shoes. Hubby didn't even ask, plus he didn't even bring a bill with him as proof of purchase. Wow. Now that's customer service and standing behind your product. Way to go Big 5!

  • by Daria Steigman Fri Mar 5, 2010 via blog

    Hi Elaine,

    I think there are two separate issues wrapped in here:

    1. Sport Authority, and other big box stores, are looking to make "insurance" margins on everything. I think what they're going to do is drive traffic elsewhere, to those retailers whose first response IS customer service and not "you didn't pay for customer service." Plus Alison has a great point about getting what you pay for. I buy my running shoes at a specialty running store--great service and, in the case of RNJ, great pricing too.

    2. The good companies are still standing behind their products. I had a problem with a pair of New Balance shoes a few years ago and the company sent me a new pair. So there's the second place where there's real differentiation.

    Glad you finally found a sports store that does get customer service.

    Have a great weekend,
    Daria

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    Daria, you are right. And I could have sent my pair of disintegrated shoelaces back to New Balance for replacement. But, in reality, who wants to bother? If it were the shoes that fell apart, that's another story, but the laces weren't enough of a issue.

    One thing's for sure. Next time I have to buy athletic shoes, I'm heading elsewhere. Your point is well taken.

  • by David Reich Fri Mar 5, 2010 via blog

    Product insurance and extended warranties sold at retail are a big business... and many experts also say they're a big ripoff.

    It's a shame, but I guess gone are the days when manufacturers and retailers stood 100% behind their products.

    There still are some notable exceptions. I think of L.L.Bean as a prime example. They will take back and replace anything they sell -- no matter how old or how obviously abused it may be. I'm sure some people take advantage, but whatever they might lose from dishonest returns, they more than make up in customer loyalty. While L.L. Bean's prices are pretty good, it's not about the absolute lowest price when you buy from them. It's knowing they sell quality merchandise which they stand firmly behind.

  • by Elaine Fogel Fri Mar 5, 2010 via blog

    I agree, David. There are some retailers who have amazing reputations for standing behind products, sometimes to the extreme. People tell me that Nordstroms is like that, too. It always boils down to, "You get what you pay for."

    Thanks for the comment!

  • by Jeri Dansky Sat Mar 6, 2010 via blog

    Insurance on shoes is a new one for me - I never heard of that before. If I went to buy some shores and found the store selling such insurance, I might well head for the door without a purchase.

    How a store treats me when something goes wrong with a product is a big part of how I choose where to buy things. After a bad experience with Sears, I won't be shopping there any more. (I prefer to support local businesses over chain stores, anyway; the Sears purchase was an anomaly of sorts.)

    But, to emphasize the good, let me give a story of wonderful customer service regarding a defective product. I took my keyboard, which had stopped working, back to the Apple Store. It was certainly past the one-year warranty period, and I was prepared to buy a new keyboard - but the store gave me a new one without me even asking.

    Standing behind your product seems like a smart strategy to me. Apple didn't just make me happy - I've told that story (and other stories of great customer service from Apple) to LOTS of people, spreading the word.

  • by Elaine Fogel Sat Mar 6, 2010 via blog

    Thanks for sharing, Jeri. I agree with you 100%. Word of mouth is more powerful than almost anything else. And it works both ways - positive AND negative.

  • by Don Mon Mar 8, 2010 via blog

    Yes indeed we did cross. In fact her post was apparently in moderation as it wasn't there when I posted :-) so your response also wasn't there. I know that many of use will prefer a higher priced service oriented store when we can, however in many cases (see hardware for example) the big box steals so much volume that it may drive out the place you prefer to so business with.

  • by Jeanne Byington Tue Mar 9, 2010 via blog

    Elaine,

    I bought a $25 mouse for a laptop at Staples last week and the cashier insisted I needed insurance. Geesh.

    The game between manufacturers and retailers in so many industries is a bit like hot potato we played as children--when the music stops, who is holding the potato? He/she is out. Once you buy so many things the problem is yours to fix and your time is of no consequence.

    I don't trust retail insurance policies. I get the feeling that I'll hear, "Oh, this happened on a Tuesday? Sorry, we don't fix things that break on Tuesdays!" --like the shoe laces that weren't covered by the insurance policy [you didn't buy] for your sneakers.

  • by Elaine Fogel Tue Mar 9, 2010 via blog

    Jeanne, LOL, I know exactly what you mean. These types of insurance policies create an environment of distrust.

  • by Ann Tue Mar 16, 2010 via blog

    Ralph Nader once said that if a product needs the protection of an extended warranty (that is, the kind you buy on top of the manufacturer's original warranty), then the product is not worth buying, because it is obviously of inferior quality. In other words, a quality product does not need an extended warranty.

  • by Elaine Fogel Tue Mar 16, 2010 via blog

    Nader sounds right to me, Ann. However, did he make this statement before the advent of technology and electronic products?

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