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AV Service Contracts: A Consultants Perspective

Service contracts are the single most important client contact a dealer can have By Brian E. Huff, CTS-D

Hello all, Ive agreed to write a short piece about AV service contracts from the point of view of an independent consultant.  This is one of Gary's favorite topics and deservedly so.  Its also a topic that I know something about since I regularly specify SCs, and intermittently play client/contractor referee when our systems have problems after the initial installation.  In any case, I am here to argue that service contracts are the single most important client contact a dealer can have.  Why?  They provide a consistent opportunity for developing long-term relationships with new clients, or for strengthening a relationship with an existing client.  And as we all know, when it comes to competing in the service industry, relationships trump all.

First off, lets get past the bid spec service contract issue.  Yes, most competitive bid specs come with a one year parts and labor warranty coverage, sometime two years.  I argue that this is an opportunity made in heaven to get to know and help your client, and pull in add-on sales that you never would have closed without it.  A great way to put some profit back into that low-margin bid you used to win the project in the first place.  All too often I see contractors low-bid a project, win it, complete it, and then walk away from the client.  Whats up with that?  You invested in the relationship, now get some ROI!  Dont wait for the client to call you, send your folks out for scheduled service like clockwork!  Have them ask if theres anything else that they need, or any new projects coming up.  Clients are much more open in person than on the phone or via e-mail.  Have your tech stop by the offices of the folks they worked with on the original install and drop off some swag and a business card.  Sales people often dont get past the receptionist, so take every advantage here to schmooze and gather intelligence from the inside.  Your clients appreciate being serviced well by someone they know, so dont blow it and act like a disaffected video store clerk!

This is particularly important when the client is a large corporate, governmental, or university client who regularly buys equipment and services in bid and RFP formats.  In my experience, getting on RFP and bid lists, as well being tapped for less formal AV procurements is very often based on the clients perception of the vendors technical proficiency and responsiveness.  Many clients change vendors or seek out independent consultants because theyre unhappy with their existing technical support or they just dont know anyone to help them with (from our perspective) relatively simple, but potentially profitable installations. 

Other times clients would rather talk to the service or technical support than sales about their needs because they are already savvy enough to know what they want, and prefer to cut to the chase.  So, if they have a continuing relationship with a tech, they will call them, or broach the subject with them on the next service visit.  (The key here is the tech needs to be on a service visit.)

Asking techs to sell, however coincidental, brings up the issue of commissions.  Should a field tech get a commission for selling equipment or a system?  My answer is yes, absolutely.  So what if the client is in the territory of an existing sales person, or worse, already has a relationship with a particular sales person?  A commission split or at least a bird-dog fee is in order.  It could also mean that your salespeople are spread too thin, or for one reason or another are not maintaining good contact with your client base.  Perhaps the client doesnt like or trust the assigned salesperson and this is a signal that a change is needed.

In short, if youre not rewarding your techs for bringing in business, you should be.  In fact, anyone in your organization who takes it upon themselves to help sell equipment and services from your delivery driver to your receptionist should be rewarded, and I dont mean donuts on Friday morning.  Heres my rationale:  Everyone in your organization is in sales whether they like it or not. Every interaction that your client has with your company contributes to their perception of whether you are easy or difficult to do business with, which in turn drives business your way and away from your competition and the Internet.

In his recent bestseller The World is Flat, Pulitzer prize-winning business technology author Thomas Freidman implies that every sales, support and technical job that can be outsourced to China , India , Eastern Europe and Mexico will be soon if its not being done already.  This includes everything from taking your fast food order at the local drive-thru to answering your questions about your health insurance, to high-level software and hardware design and manufacturing by Microsoft, Intel, IBM, Dell, and HP.

After much analysis, Mr. Freidman comes to the conclusion that there are four types of people that are secure in their jobs or businesses in the future: ?special people such as Michael Jordan and Bill Gates; ?specialists such as high-level engineers in niche industries (like ours); ?anchored workers like your dentist, plumber or waitress who must work on site; ?really adaptable workers who can adopt new work habits and technical competencies overnight.

And this is the good news: We in the AV business are not selling fungible services.  At least for the foreseeable future, most (but not all) of our equipment and systems need to be sold, designed, coordinated, installed and serviced to some degree in person by anchored specialists who are really adaptable!  And more to the point, in an age where a client can order virtually any piece of equipment over the Internet below your cost, your people, whether sales or technical, warehouse picker or CEO, can provide the irreplaceable direct interaction necessary to get your clients gear installed, working, repaired and replaced.  So yes, sell service contracts at every opportunity, and then perform those maintenance visits whether they call you or not.  It is one of the main avenues of consistent, direct client contact that you have available and it is a powerful intelligence tool that may be the difference between a good year and Chapter 11.


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Brian E. Huff, CTS-D is a Supervisory Consultant with Acentech Incorporated ? http://www.acentech.com -- in Philadelphia, PA. Brian has more than 20 years of experience designing and specifying audiovisual systems for education, corporate, and government clients. Brian holds a High Technology MBA from Northeastern University, is an ICIA CTS-D and a member of AES and SMPTE. He can be contacted at (215) 245-7124.
Related Keywords:service contracts, client contact, dealer, developing long-term relationships, new clients, existing client, service industry

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