Opinion: Page (1) of 1 - 09/02/04 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook

When a Warranty Isn't Really a Warranty

The ProAV anomaly By Gary Kayye, CTS

I spent the past three years visiting more than 230 dealers in the USA, Canada, Europe and Asia. The purpose of my tour was to hopefully help the ProAV dealer with the convergence in technology and the changes in distribution that are on the horizon from many of the leading manufacturers. Both these changes in technology and in distribution will, forever, affect the typical profit model for most ProAV dealers.

And, as dealers begin to transition from a model where most of their revenue and profits come from product sales to one where most of it will come from services like design/engineering, integration of systems and service contracts, it's probably a good time to discuss an issue that is not only an anomaly in our market, but one that actually makes it virtually impossible in some cases to even sell a profitable service contract to an installation that needs one.

What's the issue/anomaly? Simply put, it's over-bloated, confusing and just plain stupid long warranties from manufacturers.

When was the last time you bought something that came with a 5-year warranty? Or, how about even a 2-year warranty? Not too often. OK, maybe a car, but at least that thing has wheels to drive it to the service department -- a projector can't de-install itself with a ladder, pack itself in a box, ship itself to the manufacturer and then re-hang itself in the room when it breaks down.

OK, I know that it's the thought that counts and projector manufacturers must think that what they are doing by offering these long warranties is appreciated -- and I am sure it is -- by the traveling presenter. Those projectors are basically treated like virtually any other accessory to the PC and can simply be packed up and shipped in for repair on a moment's notice. But when a projector that's hung in the ceiling of a $100,000 boardroom fails, it costs someone, somewhere, some money.  

Enter the service contract. Good AV Dealer tells Happy Customer that they can provide a proactive service contract on Cool Installation for a mere $400 per month. This $400 per month guarantees that should the install break at any time, Good AV Dealer Guy will come out there and fix it within 48 hours. No problem. And Good Dealer will also go one step further and provide Happy Customer with four preventative maintenance visits a year to make sure that Cool Installation never even gets to the point of breaking down. Wow.

But then Happy Customer frowns and says, "But my products all came with a three- and five-year warranty." So, Good Dealer, being the good dealer that he is, explains that although the product is under warranty, that warranty doesn't cover the price to de-install it, ship it and re-install it when it comes back. And their system will be down while that is happening. But, Frowning Customer then says, "I thought my warranty covered anything -- my car warranty does." Yes, but a car can't drive itself to the dealer service shop and then return home on its own. Someone has to be inconvenienced in that situation and in every case; it's the car owner -- not the dealer. Right? Think about it. The dealer service guys sit in the service department waiting for a car, driven by a person, who drives up and asks for repair. Then they repair it and the car owner somehow magically shows up to pick up the car when it's done. No thought or concern goes into the time away from work for the car owner, the inconvenience of getting to work or getting back to the dealer to pick up said car.

But, in the anomaly known as the ProAV market, our products have ridiculously long warranties included. A PC, one year parts, 90-days labor. A projector 3-years on both. A TV, 90-days parts and labor, a matrix switcher, 3- to 5-years. Ever take a matrix switcher out of a rack? Who is burdened with that service? The dealer. He's expected to warranty it and service it. OK, sure, the dealer gets that service for free, from the manufacturer, as it's included in the warranty, but almost no one reimburses for labor and time taken to troubleshoot, de-install, ship, re-install and re-program the system to get it up and operating.

Realize that this is a revenue stream for the ProAV dealer. It's a service that is selling the customer peace-of-mind and an assurance that it won't break down and, if it does, it will be fixed.

As I said earlier, I see the value of a long warranty for traveling presenter-type products, and am proud to be part of an industry that offers a warranty like no other in ANY technology segment, but that is also a hindrance for anything that's installed.

Don't believe me? Call ANY, I mean ANY, systems integration company in the ProAV market and ask them what they think of these long warranties on systems products and how well it helps them to sell service contracts.

I think the manufacturers of systems products should rethink their warranty policies and either cover the real costs of what it takes a dealer to support a broken switcher, DA, projector or system in a rack or, do what every other manufacturer in every other industry has done, and shorten the warranties. Just my opinion. Oh, and the opinion of about 200 or so other ProAV dealers.


Gary Kayye, CTS is Chief Visionary at Kayye Consulting, Inc., a Chapel Hill, NC-based marketing consulting firm that serves the ProAV and Home Theater markets. In addition to strategic marketing consulting, Kayye Consulting, Inc. is also a training development company. Gary can be reached via e-mail at gkayye@kayye.com or through his Web site at www.kayye.com.

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Gary Kayye, CTS is Chief Visionary at Kayye Consulting, Inc., a Chapel Hill, NC-based marketing consulting firm that serves the ProAV and Home Theater markets. In addition to strategic marketing consulting, Kayye Consulting, Inc. is also a training development company. Gary can be reached via e-mail at gkayye@kayye.com or through his Web site at www.kayye.com.
Related Keywords:dealers, ProAV dealer, convergence, technology, distribution, manufacturers, technology, profit model, warranty, integration, systems, service contracts, Gary Kayye

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