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Compensation for Service Contracts.

By rodney ·
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I have recently opened a retail computer sales and service facility in my town. I have customers that are interested in purchasing some sort of service contract. For instance, I have one lady that wants to be able to call and ask technical questions when she needs, as well as wants to be able to have her computers repaired when needed. What is the best way of doing this so neither party is cheated? Should I used block hours or a monthly charge? I normally charge $65/hr for onsite service, and was planning on dropping that to $40/hr for contracts. What about the phone calls? What should the minimum per month be?
Thanks!

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Compensation for Service Contracts.

by avachon In reply to Compensation for Service ...

Hi, service contracts can be great for both parties if you have the time to invest in both onsite and phone support. $40.00 onsite is generous on your part; I would charge the $40.00 to those who buy a computer from me and charge $65.00 for service on computers purchased elsewhere. That way the deal goes to loyal customers. As for phone support, I would charge on a per incident basis (flat fee)after say 30 days of free support for equipment bought at my shop. The 30 days guarantees the equipment is up and running and falls in line with most service contracts. If you went with a monthly fee you may well be inundated with really simple stuff (how do I change the colors on my display, etc. - easy but time-consuming). I hope this helps. Good luck.

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Compensation for Service Contracts.

by rodney In reply to Compensation for Service ...
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Compensation for Service Contracts.

by MCSE Lee In reply to Compensation for Service ...

In the past, I have tried two different methods to bill for service contracts - both have worked for me, when applied in the right situation. Block hours are easier for the customer to track, and have the tendency to cut down on the actual number and duration of calls - I prefer this method. When I have used this, I always insist on 1/2 up front, and the balance due in payments over 1/2 the term (1/2 down and six monthly payments for a 12 month contract). If you do go this route, make sure to invest in time-billing software! The other method is to pre-schedule preventetive maintenance calls (monthly, quarterly, whatever), and include basic service in that (this works best for printer service, etc.). For phone support, a time-block approachworks best - have the customer estimate how much time they want to buy (at a discounted rate?), and then make sure to charge the standard rate for any/all time after that.

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Compensation for Service Contracts.

by rodney In reply to Compensation for Service ...
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Compensation for Service Contracts.

by jbelina In reply to Compensation for Service ...

Check with your hardware/software distributors as well, I believe the larger distributors like Tech Data and Ingram Micro have programs where you can resell support contracts. The benefit of not doing the support yourself is that you don't have to worry about whether or not you'll have enough technicians available to do support if multiple customers contact you the same day. You can also resell in-home training this way. You may find that by selling support services you are able to make yourcustomer happy and make a profit at the same time.

Good Luck!
Jeff M. Belina

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Compensation for Service Contracts.

by rodney In reply to Compensation for Service ...
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