Maintenance Contracts: Do you really need them?
Article By: Rich Silva – Founder – Pain Point IT Solutions, Inc.
Here's a common scenario we can all relate to..
Most of us have gone to a store and purchased an electronic gadget, only to be asked by the cashier whether we would like to "cover" the unit for an extra X amount of dollars. Some of us say yes, some say no. This week, I will write about some of the reasons someone might say yes, and some of the reasons someone would say no and try to relate them to the IT Managed Services Provider industry.
Possible reasons the consumers says YES.
* They see value in the cost of the coverage versus the cost to replace the device with a new one.
* They realize they do not fully understand the technology enough to "fix" it if something went wrong, so they like the peace of mind knowing that they will be able to get it fixed if needed.
* They worked in retail at some point in their life, sympathize with and want to give the cashier a SPIFF for being brave enough to ask the question they are forced to ask.
Possible reasons the consumers says NO.
* They only think about the extra cost and do not take the time to analyze and process internally the value proposition.
* They believe that the overall value of the product they are purchasing will be less by the time they need it fixed, so why bother.
* They are annoyed that someone is asking them to spend even more money and think that the store should be grateful that they came in and purchased something from them.
There are probably many reasons that I missed, but these in my opinion hit the biggest ones.
Maintenance Contracts Versus Proactive Business Practices
In the IT Managed Services industry, we provide and promote proactive business practices. What this means is that we provide solutions that will reduce the impact a disaster or IT event has on your business when one occurs. The negative impact on your business could be financial, data loss, or significant down-time. A maintenance contract on the other hand provides you with a person to call AFTER the disaster occurs, often with the maintenance contract provider having not put in place any systems or protocols to get you back on-line as quickly as possible. See the difference ?
Unfortunately, many people who review proposals that we in the IT Managed Services industry provide to them can't step away from their thinking that they are being proposed a maintenance contract and as a result can't see the difference between the two.
Let's re-analyze the maintenance contract responses from above and how the consumer driven mentality of maintenance contracts really leaves people at a disadvantage when reading a proposal from an IT Managed Service Provider.
The consumer who says YES to our proposals see the value in what we are offering them, realize they do not fully understand or have the time to learn the technology, and can relate to having their own clients not taking proactive steps in something they offered and paying for it in the long run.
The consumer who says NO to our proposals only think about the cost, can't or don't take the time to comprehend the value despite it being spelled out for them in the proposals, or are annoyed that we are bringing to their attention that they are not prepared to handle an IT disaster.
The consumer who says NO to a proposal from an IT Managed Service Provider (MSP) is leaving themselves in a very vulnerable situation. Not being able to tell the difference between taking their broken TV remote control back to the retail store to get it replaced and not being able to continue doing business because their server crashed and it was not backed up and maintained by an MSP properly will ultimately cost them. Their business will essentially be OUT OF ORDER.
My goal here is to demonstrate that one can replace products with newer products, but one can't replace data, or time that is lost because one wasn't proactive, or able to tell the difference between a reactive break-fix maintenance contract and a proactive IT Managed Services contract.
If you want to learn more about what an IT Managed Services contract can do for you or the business you work at, please contact us by clicking on the Take Action! button below.