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Doing business is a risk. The more we can reduce the risk, the more likely that our clients will do business with us. With a 100% refund - theoretically, there is no risk. From the client's perspective, however, think of this in terms of motor vehicle insurance. With insurance you have "peace of mind" but if your vehicle has ever been involved in an accident, you know that the coverage of the cost of the repair is a small portion of all that it involves. Let me introduce the word "inconvenience" at this point so that you will know what we mean!

The insurance companies realized this and created "added value options" of
· Free rental car
· We come to you
· "Hassle free repair" How can we offer the same to our clients? In the consulting industry we offer a "free hours until you are satisfied" clause - with some conditions, of course, one being that the client does as we say, as we cannot be held accountable for a result different to what was expected when work was not performed as required. Imagine going to a Doctor and getting a prescription which reads "take 2 pills 3 times a day for a week" and on the way home a neighbor asks "what pills are those" and when shown says "my uncle took those - he died!" So you decide to take 1 pill twice a day, and a week later are back at the Doctor as you are still not well… Certainly is not the Doctors fault you are not well, and you will get charged for a second visit! In the recycling industry there are two powerful tools available, over and above the standard 30-day replacement guarantees: · Extended Warranties · Labor Warranties

Think of this as the insurance industry's "Hassle free repair" - if the part is "bad" over a period of time, the extended warranty provides a longer warranty period for an extra fee, and the labor warranty means that the labor to replace the part is covered as well. What does the client have to lose?
· They are getting a genuine part
· Any possible future problems are covered
In one instance one of our recycling clients had a client who had a part go "bad" while on vacation in California. Through a URG member, the part was not only replaced, but also installed. You owe it to your customers to offer them the option of "peace of mind". A further compelling factor to offer extended warranties is that our studies have shown that the average cost to the company is thirty-five cents on the dollar. (Calculated by excluding overhead costs, assuming an average 10% markup for the warranty, further assuming the part was sold for the listed price, with a commission rate of 25% and a claim rate of 10%). So give your clients "hassle free peace of mind" and be sure to offer extended warranties. Now about that free rental car warranty…

Brent W. Stephens is a project manager with a Masters Degree in Social Sciences. He worked for George S. May International Company and International Profit Associates, Inc. prior to opening his own management consulting company, CE Corporation in 1996, incorporating as Consulting Expertise Corporation in 1999. When the business was closed in 2001 due to personal circumstances, close to 80% of their client base were auto recycling facilities. He was a freelance contributor to the Premium Parts magazine.