Service Contracts

We recieved a letter the other day from one of our customers asking what our service and maintenance contract covered.
It goes something like this "it would appear that you only come out to service the equipment but we have received unexpected invoices for repairs this year and we are thinking that the service agreement is not really worth the money".

This customer has had the kit installed by us for nearly 9 years and - alas - he lost 2 compressors this summer! - what does he expect! Servicing does not guarantee against mechanical failure. Do you have "difficult" customers? This one is driving me MAD :D

Lets hope that when his car breaks down the garage will get a load of stick!! :p

frank

When i worked for Volvo (Many Years Ago) we always used to say that it was easier to sell a £10K car than it was to sell a £200 Service.All customers moan about maintainence costs but the only way to prove it is to not do any for a year and see what happens. All you can do is try to explain the benifits of preventative maintainence and try to should how inconvenient and costly it is for breakdowns. At the end of the day a company who is concerned about the refrigeration will pay for maintainence, Companies who see it as an inconvience won't.
If you get a company who doesnt maintain equipment that then breaks down, STING EM. By this i don't mean BODGE/OVERCHARGE, what i mean is do the job right, do everything that needs doing any present them with the invoice with a smile

Servicing protects against PREMATURE failure of the equipment, but everything has a life expectancy, and no matter how much you service an item it will eventually break down and need repair or replacing. Servicing simply ensures that the life expectancy is realised.

We make sometimes an all in (labor, spare parts, gas , compressors and so on) contract for 6 to 8% of the total cost of the new installation.
In most cases, we have a 2 year warranty of the manufacturer and these 2 years, we can fill our piggy bank (is this the correct word)
This (6 %) means a depreciation of apr. 16 years.
Thi amount assures our client a well definied annual cost without any surprises for his refr/AC unit.
Peter

The word service should not be on a preventative maintenance contract.The word servicecalls should be in bold letters showing rates and charges and explaining the difference between routine maintenance visits and breakdown servicecalls.Then again with some clients - YOU JUST CANT EDUCATE IDIOTS.LOL

Dave

My thoughts exactly.

These guys are getting our basic package - cleaning filters, checking operation etc. -BUT they still want gaurantees against failure? is it no wonder that my hair has fallen out?? :D

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Originally posted by Karl Hofmann
Servicing protects against PREMATURE failure of the equipment, but everything has a life expectancy, and no matter how much you service an item it will eventually break down and need repair or replacing. Servicing simply ensures that the life expectancy is realised.

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i would be very careful stating this on any contract or verbally to the customer

'kit' can and does fail before it's 'life expectancy' what ever that is??

it 'helps' protect against premature failure that's all..


and your statement above will get you in court eventually without a leg to stand on..

bit pandatic i know but there was a discussion some time ago (not here) about a company getting sued because their maintenance contract didn't explain correctly this very point..
http://groups.google.co.uk/groups?hl...com%26rnum%3D1


cheers

richard

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Originally posted by rbartlett
[
bit pandatic i know but there was a discussion some time ago (not here) about a company getting sued because their maintenance contract didn't explain correctly this very point..
http://groups.google.co.uk/groups?hl...com%26rnum%3D1


cheers

richard [/B]

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This is a good and valid point, and indeed could get a guy in to serious trouble. I would never suggest that a piece of kit would last longer than the manufacturers warranty (And lease arrangement), anything longer is a bonus. I'm sure that we have all seen equipment that should have been put out to pasture long ago and although a twenty year old split unit is a tribute to its manufacturer, is it really cost effective both in terms of running and repair.

We always include the following para underneath the maintenance price, which helps to describe what our maintenance covers and what it does not cover.

"Please note that whilst the above price relates to two regular maintenance visits in the year, it excludes the cost of any emergency call-outs, spare parts or repairs costs, which might be requested. Should there be a requirement for such works these additional works would be chargeable at the daywork rates listed on the following pages."

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Originally Posted by frank

We received a letter the other day from one of our customers asking what our service and maintenance contract covered.... frank

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Found myself reading this old string, and my previous note, just above (thought it sounded familiar).

I had a customer ask me that question (what our service and maintenance contract covered) the other day. After starting in with a long long stare, he asked what was in our maintenance (ie why it would be better than the existing team, etc etc).

I told him, "Well, there are several different maintenance schemes available:

a) There is the 'Knit-One, Pearl-One' scheme, where the engineer(s) start in on the first Room Unit, do that, and skip the next one. Then do the following Room Unit, and skip the next one. The condensers all get a skip, normally, unless they are visible from the manager's windows. (I see he was getting a little uncomfortable.)

"b) Then there is the In/Out scheme, where the engineer(s)
sign in, walk through the building, out the back door, get in their van, and drive off to the cafe for breaky or the next (in/out) job. They can get quite a few jobs done in one day, that way. (He was trying hard to restrain himself now, wondering wtf he was doing wasting his valuable time with me. I moved on.)

c) Then, there is the Schoolie scheme, where we get a school-leaver, give him a cloth and hand-brush, and send him out to deal with the maintenance visit. Customers are normally content with this as it looks okay. They see a man on a ladder, by each unit, doing all of the units, and they don't really know if he is doing a good job or not, but he was there doing something. (The eyebrows were closing now. Time to move on.)

d) "But that's not how we do it! We ................" (just in time. He was getting near letting loose with a gale of Alan Sugar.)

I am sure there are lots more blatent dodges (not the subtle ones like "but spraying the coils will damage the condensate pumps, guvnor" etc etc) that engineers get up to ---- not us fine engineers on these Boards, of course. But, other engineers we have seen in action/inaction.

Anyone seen worse than those a, b, c, above?

For instance, doing the Wipe & Run plan offers a very competetive price to win the contract, gives the Room Unit a good external appearence for the customer's offices etc (providing those nasty dust streaks are not too obvious) and, importantly, precipitates some lucrative call-outs/repairs.

Offer to upgrade him to a "Full Service agreement". Where he pays one fee and you cover it all.
I think that will switch the light bulb on for him.
Plan well he might actually go for it :-)

this morning, had a call to leaky split,they have a maintanace contract, to be fair we are a bit behind.
so cleaned drain hose plus pump reservoir, and float, all working well.
the customer was very happy to hear that we will call this a maintanance vist, not a call out.

OK this is a long time post. But will add to it.
PMC [ preventative maintenance contracts] are always a grind to sell to clients, whether AC or refrigeration.
So I sell the concept based on the clients big flash car parked in the driveway. He washes it every weekend, he has it serviced every 10K/ Km., he pay horrendous labour rates, he pays over the top prices for oil and parts, he delivers the vehicle to the service agent. He fits in with the workshop's work load. Then replaces the vehicle every 2 > 3 years and looses a fortune with depreciation. BUT wants his AC or plant to last for ever and for little as possible cost.

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Originally Posted by Magoo

OK this is a long time post. But will add to it.
PMC [ preventative maintenance contracts] are always a grind to sell to clients, whether AC or refrigeration.
So I sell the concept based on the clients big flash car parked in the driveway. He washes it every weekend, he has it serviced every 10K/ Km., he pay horrendous labour rates, he pays over the top prices for oil and parts, he delivers the vehicle to the service agent. He fits in with the workshop's work load. Then replaces the vehicle every 2 > 3 years and looses a fortune with depreciation. BUT wants his AC or plant to last for ever and for little as possible cost.

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:Dvery good..so true

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Originally Posted by Magoo

So I sell the concept based on the clients big flash car, parked in the driveway. He.....pays horrendous labour rates, he pays over the top prices for oil and parts, he delivers the vehicle to the service agent. He fits in with the workshop's work load..... BUT wants his AC or plant to last for ever and for little as possible cost.

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A great viewpoint and timely for me. Subsequently, I took a call from a horsebox owner with a sad Daikin unit, strapped tight underneath, which we had worked on:

"If I had taken the vehicle to Germany and had it repaired by the garage.....":eek:

"Ah, yes," I piped up (drilled, ready with Magoo's points) "but the garage staff would have been working comfortably from an access pit, below the vehicle, not crawling underneath the back wheels, working on their knees and elbows; you would have had to pay at least £120/hour labour rates and they would have taken the vehicle away from you until it was repaired. AND you would have had to deliver it to Germany, then go back to pick it up when the repair had been finished. You would not have been able to use the vehicle in the meantime."

(And he would have had to pay up upon collection, not the 2-6weeks he takes to find his cheque book when I submit an invoice).

Case dismissed, I think :D