SmartVan Roundup: Choosing the Right Service Contract for the Job
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- September 26, 2012
Nobody likes paperwork, but contracts are the backbone of any service organization: They lock in customer relationships beyond the point of sale and drive consistent revenue. How do you craft agreements that maximize return and minimize the fine print? Here’s a look are three of the most effective types of agreements we’ve covered on SmartVan — and how to go about implementing each:
Full Maintenance Contracts – Providing customers with full maintenance contracts can be scary, since you’re usually footing the bill for all parts and labor. One wrong move can make the duration of the contract financial deadweight. But a well-written full maintenance contract can help with budgeting and eliminate emergency calls due to the regular maintenance. This will “free up your service group to take on more customers without increasing the number of technicians,” says Zen HVAC author Patrick Peterson. Read more.
Managed Service Contracts – Managed services offers a package of services such as on-site field service support, remote support, and sometimes even outsourced or hosted services. It’s a way for original equipment manufacturers (OEMs) to offer customized service packages, which ensure long-term service revenue — especially when margins on hardware get tight. Field service businesses “need to find new revenue streams, so they’re looking at managed services,” says Thomas Lah, executive director of TSIA. Read more.
Service-Level Agreements (SLA) – Most commonly in the technology sector, service-level agreements are great for formally defining the customer’s expectations and how the business will provide said service. The running logic is that if customers know what to expect and you deliver, it’s better than promising more than you can deliver. “It’s almost better to under-promise and over-deliver,” says Dan Ushman, CMO of SingleHop. Read more.
Image used under Creative Commons by Flickr user blakespot.