Merchants who want to sell plans that cover product failure and, in some cases, accidental damage should know that marketing language matters. Consumer interest in buying these plans varies by generation, with significant differences among age groups when it comes to the marketing terms they prefer to hear.
The younger generations are more interested in coverage and prefer to hear it called an “extended warranty,” while the older generations are less interested in coverage and are more likely to buy if it’s called a “product protection plan,” according to “Language of Trust,” a PYMNTS and Clyde collaboration that surveyed 2,519 consumers.
See the study: Language of Trust
Close to half of the members of Generation Z, millennials and bridge millennials say they are “very” or “extremely” interested in purchasing coverage when it is called an “extended warranty.” Their interest goes down when the product is instead called a “product protection plan.” The difference is particularly large for Gen Z, with 50% expressing an interest in an “extended warranty,” but only 37% doing so for a “product protection plan.”
Among the older generations, on the other hand, 30% of Generation X consumers and 13% of baby boomers and seniors say they are “very” or “extremely” interested in purchasing a “product protection plan,” while only 28% of Gen X and 9% of baby boomers and seniors are interested in an “extended warranty.”
While it’s important for merchants to label protection plans correctly for each generation because of those different perceptions of the terms, it’s also critical that they do so for different products.
The survey found some key variations across product categories. Consumers responded more positively to “extended warranties” for jewelry, mattresses and electronics, but prefer “product protection plans” for luggage, handbags, exercise equipment and furniture. The difference is especially large when it comes to mattresses and jewelry, as consumers prefer the term “extended warranty” by a margin of greater than 20 percentage points.