How do you go about selling maintenance contracts for residential projects ?

I often feel mentioning them is almost saying "the product / our work not very good so its advised you retain us to keep it running".

Here's a blog post I wrote about it in August.

[Link: paulryandesign.com]


It's not that your product/Service isn't good.  It's that your'e selling technology, and technology changes.  They didn't use a flip phone to call you.

If you're not selling MC's to new customers, and you're not going back and assessing/selling them to existing customers, you're leaving a lot of money on the table.  Not only for the RMR of the MC, but for the simple fact that you're building a relationship of trust with your customers.  You use that trust, to walk them up your value ladder over a period of time. Giving them great service and allowing you to make more money is the name of the game.  There's nothing wrong with making money.

Is anybody selling contacts??

I've thought about it, but I guess I don't do jobs that are big enough to warrant it. Once I've go the kinks worked out of a new system, the vast majority of my customers might have issues once or twice a year at most. And usually its a reboot of some sort.

The bigger the project the bigger the risk. Given the failure rate of electronic components nowadays I don’t do service contracts. You can hang yourself. Yes, you can bank the money once a year but I find that I make more money by charging T&M.

Do you get calls for support? I ask because i realize that some companies do $100-1000 TV installs all day long 5 days a week and they never hear from their customers again until they need a new TV installed. Obviously if no one ever calls you for support then you probably don't need to bother with service contracts. HDMI cables and TV mounts rarely fail once they are installed.

If you provide more complex systems that fail and cause clients to call you for support then you should be selling a service contract. Everything on this planet gets a "do you want the extended warranty" nag screen when its scanned at checkout. These are basically service contracts.

Service contracts are not just about handling calls about system failure. They should also include once or twice a year system check-up visits where you test everything and get a chance to sell your client new stuff. Every time i walk into an old project i immediately get hit with questions about a dozen things they have been wanting to do for a year but because they are busy they dont bother asking about it.

There is no risk as long as you dont make your service contract a magic ticket. If a projector or control processor fail outside of manufacturer warranty that doesn't mean you replace it for free. Sell them a new projector or control processor. Have your service contract cover a check-up site visit or two plus a block of labor hours at a discounted rate to cover emergencies. You can offer teired support. Demanding "fix it now" clients might have no problem paying you $2000 a year more as long as you will come out and get their stuff working. Other clients may be fine with waiting till monday and paying less for the service contract.

Some people will buy it. Others wont. Those who dont may never need you...but when they do...bill them full boat and offer them the service contract again to see if they learned their lesson.

If you are doing mid to large projects and have trouble selling MC, option 2 is to sell them on pre scheduled maintenance visits.
Some clients would rather just pay you as the need you.
Much like a car needs regular scheduled visits, so does their system.
These do not have to be much more than putting the system through it's uses and confirming everything is working and up to date.
We have talked about it here many times, a client calls to complain the BR player is not working, installed a year ago and they have never really used it. We usually think, yea right. But in some cases it could be true. We put a lot of stuff into people's homes because we have told them they need it and some things or even zones may not get used for months or even years.
A regular check up lets you confirm everything is working as it should, even if they have never used it, it will be ready to work for them.
As the system gets older, it gives you the opportunity to suggest upgrades or discuss new technology that can improve their system.
This has become more and more important as more of the things we install all need software or firmware updates.
Depending on the types of remotes you are using, you should also have a battery replacement schedule.

Whats T&M ?

Time & Materials

| Is anybody selling contacts??

When I was a CI I basically did glorified hang and bangs.  TV installs/SONOS/Home Theaters..

I sold maintenance contracts all day every day.

How/Why can you sell a maintenance contracts for a TV mount?  Twice a year come out, take the TV off the wall, air-blow the dust bunnies off the back of the TV, maybe change any programming in the remote that might be needed, make sure IR flashers (in the day) were snug still,  clean the screen... done..

We all know that the majority of our customers have housekeepers...But the house keepers can't/don't/won't clean the AV equipment..

This is actually a fortunate development because they usually clean the IR emitters off the equipment. And, they'll often clean the stylus off the cartridge.

Funny, that is exactly what I was thinking. I had a client who said his Internet would go down every Thursday. After he put a sign on his office door saying don't clean this room, his Internet was fine. The house cleaners came on Thursdays.