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Service Contract

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tsplusone

Vendor
Mar 30, 2004
59
US
I have a situation I have never run into before and would like some advice from other interconnects out there. I have a Customer, whom I recently sold a phone system to (which is still covered under warranty), that wants a service contract. They are looking to budget their telephony service & equipment expenses for the coming fiscal year.

We normally sell Maintenance Contracts that cover parts & labor, along with a dozen or so other benefits (discounts & freebies). How do I go about pricing this without parts & labor?

Some background might be helpful here: Customer is actually 2 businesses sharing phone/voicemail system with about 16-lines x 25-sets total. Typical office, no special needs really, but many calls with questions about using features, setting up mailboxes, changing greetings. I personally trained their IT Manager, Office Manager & Logisitcs Manager (my lead contact) on administering system.

The problem is that even though they take notes, have all the manuals & user guides - they don't do this everyday. I have given them many freebies, in the way of telephone tech support & no-charge service calls. But they want to control costs & set a realistic budget.

I see this as an opportunity - they like their system & my service. My rates are competitive, but I don't want them to go price shopping. (There's always someone willing to do it cheaper!?!) I can refer to the past 6 years of service, but it's not much indication of what their needs would be for the upcoming year. All ideas greatly appreciated for how to price this. Thanks!
 
They don't want a service contract (to my mind that is the same as a maintenance contract) they want pre paid tech support, correct?

You should have a pretty good idea of what they need from previous years. If you have to go to their site that should be your normal service call charge. For tech support on the phone you will have to figure what your time is worth per hour and do the math. I wouldn't worry about what anybody else charges or you may wind up losing money.

By the way, I'm very hesitant about giving the customer programming manuals or instruction. Invariably they screw something up and swear they never touched it. It then results in a service call with the tech playing Columbo trying to figure out if it is a malfunction or somebody did something. This may be great if they are on time and material but if they are under warranty or service plan you loose. Our warranty states that they will void the warranty if anybody but our techs change the programming. I would rather do what's necessary to do any reprogramming then do an emergency call or spend a lot of time figuring out what happened.

-Hal

 
the Best way to stop a client from getting there fingers into a st=ystem is to change the password and don't tell them what it is till the warranty period is finished
 
IF the admin is password protected. Some systems are not.

-Hal
 
The way we do this is to give them so many hours of laber in the contract (at a discounted rate) and when they reach the limit that is in the contract is over. I have always hated to do a contract this way but it is how our comp. is doing it and constantly underbid us on the contracts.

I usualy give them a few choices to pick from also, the above mentioned is the least expensive.
 
Thank you all for your replies! Teltek is on the right track where I'm going with this. This "service contract" will keep our foot in the door, instead of a competitor's.

We always give our customers the manuals & training on administering the system. From a consumer standpoint, if I bought a new system, I'd damn sure want the manuals & some training to maintain it.

Teltek - besides discounted labor, what other choices do you offer your customers? I have put together a menu of options: Block of Hours (w/10% discount); T&M (w/5% discount); Additional Training; CO-Line Service; & Inside Voice Wiring Coverage. The trouble I'm having now is with pricing this out.

For a normal Maint. Contract, we charge 1% of the system purchase price per month, and the contract includes the above mentioned benefits plus others. The service contract should price below the maint., as we are not covering the system for parts & labor.

Thanks again guys!
 
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