BrainTrust Query: Dick’s No Sweat Protection Plan – A Classic Loyalty Asterisk
Commentary by Bill Hanifin
Through a special arrangement, presented here for
discussion is a summary of a current article from the Hanifin Loyalty blog.
days, it seems that consumers can’t buy a major appliance, personal
computer, or big screen television without being offered an extended warranty.
irony in the sales pitch is that talking points from store personnel leading
up to the purchase decision are centered on the high quality of the item being
considered for purchase. Once that decision is made — whoosh — the chatter
morphs to emphasize the need for a consumer protection plan to shield you from
any number of consequences — especially manufacturer defects.
If there was
ever a better example of fear-based selling, I can’t think
As a brand, you should be careful to monitor the presence
of the loyalty asterisk in your marketing mix as they throw up barriers, making
long-term customer loyalty tougher to achieve by creating mistrust and diluting
I’ll leave the full analysis of when it makes sense to buy extended
warranties to Consumer Reports and others who have more time on their
hands. I do instinctively know that the lower the price and more disposable
the item, the less it makes sense to buy a protection plan.
with a cautious eye towards these plans, I was gripped by signage in Dick’s
Sporting Goods offering Footwear Coverage. As the copy read, I was being offered “Added
protection from failures due to defects in materials and workmanship, including
those experienced during normal wear and tear.”
Dick’s launched its “No
Sweat Product Protection” program back
in February 2009 across a number of items, including footwear.
A call to a
Dick’s store in Pennsylvania indicated that the program is still in place.
Under the program, customers receive a gift card worth the original value
of the shoe if it shows any defects under typical use over a 13-month period,
according to a store associate. For shoes costing under $40, warranty coverage
costs $4.00; for those between $40 and $80, it costs $9; and for shoes priced
between $80 and $120, $12.
I’ve been running since I was 15 and am convinced
that it is wise to replace running shoes every 400-500 miles to improve performance
and avoid injury. Depending on your running volume, that equates to two pairs
of new running shoes per year for anyone training for more than a dog walk.
said, the idea of a consumer protection plan for running or any other athletic
shoes is just plain mad. While it makes more sense for high-priced treadmills,
its value is questionable for expendables such as shoes. Readers of Runner’s
World seem to agree.
Dick’s offers ScoreCard Rewards, a basic rewards program
that delivers about a three percent deferred discount (spend $300 get $10).
With consumers seeking transparency and value in the retail shopping experience
these days, the offer of a clearly suspect extended warranty product undermines
the “loyalty” that
Dick’s is seeking.
Discussion Questions: Do extended warranty programs at retail undermine
loyalty efforts? Is there a right and wrong way to present them to customers
during the selling process?
- Dick’s No Sweat Protection Plan – A Classic
Loyalty Asterisk – Hanifin
- Dick’s Sporting Goods Introduces NEW No Sweat Product
Protection Plan – BusinessWire