Letter: Warrantech Can't Make Money on Sale of $100

Share this content:
I am writing about Scott Hovanyetz's article ("Warrantech Woos Consumers With Extended Warranty Offers," July 15). I find it difficult to believe that Warrantech can deliver on the statements you made in your article.

First, on a sale of $100, there is no way that Warrantech can make money. Either they are producing a mail piece that will initiate an inbound phone call, or making an outbound solicitation. Either way, there is not enough money in the commission to cover costs.

The conversion rate of 2.5 percent to 7 percent is really the proposed closing rate of net generated leads, not on the gross universe of target customers.

I base my statements on the 15 million outbound phone calls my firm made last year and the 1.6 million mail solicitations. Even if Warrantech kept 75 percent of the $100 retail sale, there would not be enough money to cover costs.

It seems to me that your article was really an ad for Warrantech.

Michael B. Shaftel, President, Dealer Services, Ocean, NJ



Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above