Plan Program Economics
What is the average ROI of a furniture protection plan program?
A $5M furniture retailer at 35% attachment typically adds approximately $208,000 in annual contribution. At 50% attachment that rises to ~$298,000. ROI compounds as programs mature. See the full ROI breakdown.
What is the payback period for a plan program launch?
Typical first-year incremental cost is $35,000–$78,000 (training, integration, internal management). Against $200K+ of annual contribution at industry-average attachment, payback is measured in weeks.
What net retailer margin should be expected on plan sales?
40–60% net retailer margin is the industry benchmark. Below 35% suggests overpriced provider; above 60% suggests thin coverage. Plans with richer coverage (no-fault appearance plans, no-deductible terms) carry higher net costs and lower retailer margins.
How much does a 5-point attachment improvement translate to in dollars?
On a $5M store with $1,800 AOV and 12% plan price at 45% net margin, each 5 attachment points adds approximately $32,000 in annual contribution. The math scales linearly with revenue.
What are realistic attachment rate benchmarks?
Untrained 8–15%, structured-training 25–35%, top-quartile 40%+. See attachment rate benchmarks.
Should retailers consider private-label plan branding?
For retailers above approximately $20M in annual volume, private label moves margin up 3–7 points and reinforces store brand identity. Below that threshold, the operational complexity rarely justifies the margin pickup. See private label plans.
What is the right plan pricing as a percentage of product price?
8–15% of product price is the standard band. Tiered structures (e.g. 8% entry / 11% mid / 14% premium) outperform flat pricing by 18–24% in average plan price. See pricing for maximum conversion.
How should ecommerce attachment compare to in-store?
Healthy programs have online attachment within 5 points of in-store. Most retailers underperform online by 15–25 points — the gap represents the largest single ROI recovery opportunity.
What secondary financial effects does a plan program have?
Return rate typically declines 30–50% on protected tickets. Repeat purchase rate roughly doubles. Customer lifetime value rises proportionally. See how plans build customer lifetime value.
How are program performance metrics best tracked?
By-store, by-associate, by-category attachment, average plan price, and net contribution per ticket — reviewed monthly in leadership meetings with accountability assigned. See data & analytics for plan performance.
Model Your Program
OnPoint Warranty and Guardian Products both offer free ROI modeling sessions for retailers — using your actual AOV, category mix, and current attachment.