Do you offer Service Contracts?
And if not, why not?
I recently had a business client complaining to me about their clients expectations regarding ongoing service.
They bought the package once, and then thought that it entitled them to on-call service 24/7 for forever more.
It was taking a huge toll on the business owner and his family.
Emotionally because even in tough times they were expected to literally work for nothing.
And physically because they were literally on the go all the time with little or no rest.
It’s funny that I always seem to come back to cars for my metaphors and stories. So . . . here we go again.
When you buy a car, you expect it to work!
And you expect it to work without fault for a certain warranty period.
So the car manufacturers undertake to fix any problems within a certain time period, (and in most cases, that is required by law as well as for goodwill).
But even during that warranty period, you are expected to pay for certain maintenance services, such as changing the oil and filters.
If you do not have, (i.e. pay for), these services, then serious damage could result which is not covered by your warranty.
If you don’t have these services, then your warranty might be voided.
And if something breaks after the warranty period is up, you generally have to pay to have it repaired.
Just because you spent 1/4 to 1/2 of your annual income on a car, it does not give you endless and unconditional free repairs and servicing.
And we pretty much accept that this is how it is.
So . . .
What about your business?
Are you giving endless and unconditional free repairs and servicing and going broke in the process.
“But we have to do that to stay competitive and not lose business to other companies.”
When you compete on price alone, then you must always have the lowest price to get and keep the customers.
And the lowest price includes lots of free and unpaid extras which consume even more of your time and money.
Price is an easy marketing solution, and a short road to heartache and financial ruin.
There is no point being in business if it is just to go out of business.
So offer solutions that are viable for you as well as your clients.
Back to the Story
So, back to the story and the discussion that I had with this client.
He realised that he had several choices.
- Charge his clients for call outs as they occur, even though he had not done this before.
- Introduce a Service Contract whereby for a small monthly fee, a range of services were automatically included.
Just charging clients might meet with some resistance at first, but ultimately the valuable clients would realise that good service is worth paying for.
A service contract has many advantages to both the client and the business owner.
For the client, it creates a certain amount of certainty, (always desirable to business owners), about monthly costs and unexpected maintenance expenses.
And it also creates some certainty for the business owner providing the services, because they have some regular income that covers the costs of providing the ongoing services that their clients need.
we went on to discuss the strategies needed to implement this.
Well, that is quite simple really!
What should you do now?
- Review how much free time you give away to customers.
- And then evaluate how much more service you could provide under a service contract.
- Want some help or ideas? Just contact us at Hotpink Websites now.
Success depends upon previous preparation, and without such preparation there is sure to be failure.
Remember – Do you offer Service Contracts?