Surveys show that customers are willing to pay for higher service levels and ongoing support.
The situation may be that you want to provide superior customer service, but the costs are prohibitive. After factoring in the costs of toll-free telephone lines, staffing, databases, facilities and even stamps and envelopes, it becomes very hard to provide ongoing customer support and still generate revenue. Before service plans, product returns alone could cost you your entire profit. In today's accelerated, highly competitive environment both customer service and customer retention are vital for ongoing profitability. Service plans guarantee that a product will be fixed or replaced, reducing product returns.