Are Free Warranties Killing Your Profitability?
Are Free Warranties Killing Your Profitability?
Service is a numbers game. Here’s how to win.
If you’re a home technology professional, offering your customers a free warranty following a complex installation is the right thing to do. Manufacturers offer varying coverage levels of warranties from 90 days up to a lifetime. And then integrators provide a warranty of some kind, which typically ranges from 90 days to 12 months and covers all workmanship.
In your traditional environment, this warranty covers scenarios where your team may have made an error in the setup or if a conflict between devices occurred after you left. In reality, the actual service an integrator ends up performing under warranty expands to cover a lot more than just the nebulous concept of “workmanship.” Clients typically expect everything to be covered, no matter what. If the client’s system doesn’t work, it’s the integrator’s fault — regardless of whether it really is or not. Most integrators want to make sure their referrals and upgrade business doesn’t dry up, so they oblige.
The other side of this trouble comes from the fact that it may be difficult to find out which part of a trouble ticket is covered and which is not. If a device flat-out fails, for example, that device is covered under the manufacturer’s warranty, but it still requires your qualified labor to replace it.
There are a lot of operational details, which could lead to a potentially loud sucking sound coming from your service department if you aren’t careful. Yes, that sucking sound is your profit margin.
Regardless, offering a free warranty to your customers provides them with the peace-of-mind of knowing who to call if something goes wrong and gives them the confidence that you will get them back online if it does.
And we are all striving for happy customers in this business in order to earn referrals and call-backs.
So what can you do?
Use Ihiji ServiceManager to Track Free Warranties and RMR Service Contracts
Offering your customers some level of protection against workmanship and defects is just smart business in a competitive market. But without a way to track the warranties, you could end up offering free service to all your recent customers for an unspecified period of time.
Tracking warranties can be especially problematic if certain components have different warranty terms than others. Is the projector bulb warranted for parts and labor? Does the video matrix have a 30- or 90-day warranty? Which aspects of a project are covered, and which service calls can you bill for?
Fortunately, Ihiji ServiceManager puts an end to all these questions – including knowing which of your customers’ systems are still under warranty.
How Ihiji ServiceManager Warranty Tracking Works
The Ihiji ServiceManager dashboard gives you, and any other authorized personnel in your company, access to all the information you need about a specific client. In the system, you can setup a “zero cost” service plan which includes all the services a client will get as part of their free warranty with you.
Now you can set a different plan for each individual client site. The “Main Home” may still be under a free warranty period, but the vacation properties are on a paid RMR service plan. You can now go in and look at the status of that customer’s warranty or service plans, including the date it began, the date it expires and if you offer any “bucketed” services such as a certain number of phone support hours or onsite visits, you can include those services including how much has been consumed to date.
Storing this kind of “parent-child” site relationships for a specific client who has multiple service plans and/or warranties is not the kind of information that your accounting system, such as Quickbooks is going to be able to handle. Not only that, but your Technicians aren’t accountants so you shouldn’t be requiring them to log into the accounting system for important site and plan details they need to do their job.
How Tracking Warranties Improves Profitability
With all this information at your fingertips, it’s obvious that you’ll no longer be in a situation of offering free service to clients with expired warranties. But there’s more to it than that.
With Ihiji ServiceManager providing the means to efficiently track warranties, you can now turn those free warranties into a profit-making machine as soon as they expire. Contact customers, especially those who had multiple service calls during the warranty period, shortly before their warranty is going to expire. Show them how much these service calls could cost in the future if they don’t have a warranty. And then offer them a service plan at a reasonable price to pick up coverage where the initial warranty left off. People love saving money, and they love the convenience of knowing they’ll receive top-level service without any surprise costs if their home technology systems fail.
Without a way to track warranties, every service call has the potential to take away from your profitable projects. But with Ihiji ServiceManager, you can keep your customers happy by exceeding their expectations for service while increasing your company’s bottom line.
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