Service Contract - Terms & Conditions

[Taminol]

[kingarthur]

Re: Service Contract - Terms & Conditions

i've heard from customers, that one of our competitors dont include finishers in the service contract, so if the customer has a problem, they have to pay for a callout....it's difficult for the customer to disprove it when the engineer says it's the finisher....we have gained customers because of this.

[copiman]

Re: Service Contract - Terms & Conditions

I have found there are soooo many ways to do a maintenance agreement. In my 30 yrs., I have seen it all. We feel the customers today would prefer not to be bogged down with the operation of the equipment. I run into stand alone printers with an agreement that if you buy your cartridges from a certain company, they will provide free labor and the customer pays for parts. This is a good agreement. The problem I run into is the customer is paying a high price on cartridges and parts. We provide a good price on the cartridge and parts. We sleep better at night. As far as the copier maintenance agreement, we use several very simple agreements. Our agreements are for one year. Billed monthly, quarterly, or annually. However the customer wants it. Overages, if any are billed in arrears. We try hard to give the customer an agreement that best fits thier usage. The customer or us can terminate the agreement with a 30 day written request. If it is a used machine that we do not service, we inspect the machine, and if service is needed to bring it up to standards, we bill that to the customer, then place it under an agreement. Therefor, we would prefer to have our customers under an all inclusive agreement. This covers everything but paper. We do offer others. Like just parts and labor. In my humble opinion, the agreement should not suprise the customer down the road. When this happens, not only are they not happy, but they remember. Be up front with the customer and you will be ok. When you run across those agreements that have those crazy things in them, you have found an oppertunity to gain a customer. Hope this helps.

[Taminol]

Re: Service Contract - Terms & Conditions

.......... dont include finishers in the service contract.....

OMG that's outrageous!
I've heard of companies charging for scanning these days too!

[Taminol]

Re: Service Contract - Terms & Conditions

I have found there are soooo many ways to do a maintenance agreement. In my 30 yrs., I have seen it all. We feel the customers today would prefer not to be bogged down with the operation of the equipment. I run into stand alone printers with an agreement that if you buy your cartridges from a certain company, they will provide free labor and the customer pays for parts. This is a good agreement. The problem I run into is the customer is paying a high price on cartridges and parts. We provide a good price on the cartridge and parts. We sleep better at night. As far as the copier maintenance agreement, we use several very simple agreements. Our agreements are for one year. Billed monthly, quarterly, or annually. However the customer wants it. Overages, if any are billed in arrears. We try hard to give the customer an agreement that best fits thier usage. The customer or us can terminate the agreement with a 30 day written request. If it is a used machine that we do not service, we inspect the machine, and if service is needed to bring it up to standards, we bill that to the customer, then place it under an agreement. Therefor, we would prefer to have our customers under an all inclusive agreement. This covers everything but paper. We do offer others. Like just parts and labor. In my humble opinion, the agreement should not suprise the customer down the road. When this happens, not only are they not happy, but they remember. Be up front with the customer and you will be ok. When you run across those agreements that have those crazy things in them, you have found an oppertunity to gain a customer. Hope this helps.

The 30 days notice period you offer is the shortest I've come across. I think it's a great selling point!
I did know about the free labor when you buy cartridges from the specified company. But I had completely forgotten about it. Thanks for the reminder and reply.

[kingpd@businessprints.net]

Re: Service Contract - Terms & Conditions

Quite honestly there are too many ways to do a service contract these days and every way they're currently being done is down right idiotic.

First, there should be no click charges, no overages or maintenance fees. It should be simple. The customer wants a machine so they buy it. The dealer should not be a warranty or insurance provider...the manufacturer should. I've said it many times over the years. Why can someone buy a $90,000 copier/printer and the manufacturer only covers at best 90 days?!?!

The dealer ideally will provide manufacturer warranty support on the machine and sell toner, parts, and labor on non-manufacturer covered maintenance. This would make all contracts easier and lower the cost of the machine and do away with gambling on per click charges based on toner coverages.

Let's face it, when you buy a car you don't buy insurance by the mile driven. When you buy a boat or helicopter you don't pay for insurance or a maintenance plan based on engine hours. Why should a copier be paid for based on meter clicks? It's stupid!
---
Part of the problem and complexity is that the copier/printer is not a copier/printer. I see the point about a customer not being happy about paying for maintenance on a scan or a finisher not being covered in the maintenance but let's be fair about this...

The traditional revenue generator for a dealer was and still primarily is the click charges. So to earn money and cover costs, you the customer need to makes copies and prints. It takes a lot of copies and prints to cover parts replacement costs. Historically if you wanted to scan and make images or PDF files; you had to buy a scanner which would run several hundred to over a hundred thousand dollars for the top tier scanners, plus about a thousand dollars for Adobe Acrobat to make the PDFs. Now the copiers have the pdf conversion ability built into them. The added scan and pdf conversion isn't free ya know.

Looking at finishers. It used to be do you want something that staples or not. Now you can get finishing options that rival the cost of the base machine. To earn revenue as a dealer to cover the costs of inserters, paper punches, staplers, saddlestitchers, high capacity stacking modules, tape bind, glue bind, and whatever other finishers are out there by mere copy/print clicks is unrealistic. Keep in mind that I deal in commercial print/finishing equipment and there are full lines of equipment that do everything I just listed and each entry level version typically starts at several thousand dollars.

As far as getting out of a contract early, why shouldn't there be a penalty? The dealer was counting on that revenue. If there wasn't a penalty, every stupid ninny would just cancel the contract even if the dealer wasn't at fault. It's just like the cell phone companies charging up to $300 per phone to cancel a cell phone contract. Greedy? Perhaps. But it's the consumers fault. The problem is too many consumers are lazy and sign things without bothering to read them and understand them. Read before you sign!

Just my 2 cents worth.

[Taminol]

Re: Service Contract - Terms & Conditions

Thanks for your reply. It's really interesting to hear from other perspectives.

Quite honestly there are too many ways to do a service contract these days and every way they're currently being done is down right idiotic.

First, there should be no click charges, no overages or maintenance fees. It should be simple. The customer wants a machine so they buy it. The dealer should not be a warranty or insurance provider...the manufacturer should. I've said it many times over the years. Why can someone buy a $90,000 copier/printer and the manufacturer only covers at best 90 days?!?!

We work with Konica Minolta (UK) and get 9 months warranty on circuit boards and associated components. As for the consumables, well that depends on the volume and age. But I agree that 90 days is somewhat tight!

.......The dealer ideally will provide manufacturer warranty support on the machine and sell toner, parts, and labor on non-manufacturer covered maintenance. This would make all contracts easier and lower the cost of the machine and do away with gambling on per click charges based on toner coverages.

I find the per click model ok to work with from a toner coverage point of view. Particularly if you consider the Xerox colorCube range. But find that under usage of a product more detrimental as the consumables expire through time and usage.

......Let's face it, when you buy a car you don't buy insurance by the mile driven. When you buy a boat or helicopter you don't pay for insurance or a maintenance plan based on engine hours. Why should a copier be paid for based on meter clicks? It's stupid!

You can buy vehicle insurance based on annual mileage. They have different premiums for different annual mileages. The lowest I've heard of is 1000 miles or less. Mostly used for classic cars which aren't driven much.
Or how about when you buy a car and it has a servicing intervals every 12,000 miles. When you pay your garage bill, this would equate a a pence per mile. I know that some car dealers do servicing based on a monthly payment, which is calculated on expected/personal expected mileage. Which is similar to the way in which 'minimum print/copies per month' should be calculated.
But there should be other ways to measure machine usage except click though.

.......Part of the problem and complexity is that the copier/printer is not a copier/printer. I see the point about a customer not being happy about paying for maintenance on a scan or a finisher not being covered in the maintenance but let's be fair about this...

The traditional revenue generator for a dealer was and still primarily is the click charges. So to earn money and cover costs, you the customer need to makes copies and prints. It takes a lot of copies and prints to cover parts replacement costs. Historically if you wanted to scan and make images or PDF files; you had to buy a scanner which would run several hundred to over a hundred thousand dollars for the top tier scanners, plus about a thousand dollars for Adobe Acrobat to make the PDFs. Now the copiers have the pdf conversion ability built into them. The added scan and pdf conversion isn't free ya know.

Isn't this simply the evolution of technology? Take a basic small car these days, a Toyo Aygo for example. They come with electric windows, sat nav, air-con as standard. Yet only a few years ago my car had wind up windows, a glove compartment and only a tape player!
The basic copier has evolved in to the MFD, a printer with scanner bolted on top.

.....Looking at finishers. It used to be do you want something that staples or not. Now you can get finishing options that rival the cost of the base machine. To earn revenue as a dealer to cover the costs of inserters, paper punches, staplers, saddlestitchers, high capacity stacking modules, tape bind, glue bind, and whatever other finishers are out there by mere copy/print clicks is unrealistic. Keep in mind that I deal in commercial print/finishing equipment and there are full lines of equipment that do everything I just listed and each entry level version typically starts at several thousand dollars.

Boy am I glad I don't with the commercial stuff. I have a few friends who work with Production Print machines and they always tell me there is no margin in Production Print. I'll stick with office devices, school repro rooms and copy shops.

....As far as getting out of a contract early, why shouldn't there be a penalty? The dealer was counting on that revenue. If there wasn't a penalty, every stupid ninny would just cancel the contract even if the dealer wasn't at fault. It's just like the cell phone companies charging up to $300 per phone to cancel a cell phone contract. Greedy? Perhaps. But it's the consumers fault. The problem is too many consumers are lazy and sign things without bothering to read them and understand them. Read before you sign!

The dealer may have been counting on the revenue, but he hasn't had to supply toner, consumables, parts or engineers for the remainder of the contract too. Swings and roundabouts?

I can see why phone companies charge $300 to cancel a contract. Usually the phone was supplied free of charge, and the $30 per month line rental/inclusive minutes also has an element of capital repayment. If your handset was up for renewal and you didn't change it they can and have, in my experience, lowered your monthly payment. This is because there is nothing owing on the handset itself. If you decided however to get a new handset your bill would probably just stay the same.

.....Just my 2 cents worth.

Thank you, i did enjoy reading it and replying

[rthonpm]

Re: Service Contract - Terms & Conditions

As an independent tech running my own LLC, this thread has piqued my interest. It's interesting to see some of the little quirks found in other contract agreements. I haven't gotten to the point where I have enough regular business on the copier/printer side to justify contracts yet (also the T&M rates are helping me build up some good capital for future growth), but I'm getting a few people asking about potential rates. This has been a good learning tool just to see what may be lurking out there.

[kingpd@businessprints.net]

Re: Service Contract - Terms & Conditions

I usually take what I can get as long as it's still profitable.

I see you're just west of my neck of the woods. What brands are you dealing in?

As an independent tech running my own LLC, this thread has piqued my interest. It's interesting to see some of the little quirks found in other contract agreements. I haven't gotten to the point where I have enough regular business on the copier/printer side to justify contracts yet (also the T&M rates are helping me build up some good capital for future growth), but I'm getting a few people asking about potential rates. This has been a good learning tool just to see what may be lurking out there.