Service / Maintenance Contracts Guide And Downloadable Sample Agreement

Author: Brian Karas, Published on Aug 18, 2016

This guide provides in-depth recommendations for service / maintenance and a sample service agreement that integrators can edit and customize for their needs.

 

It includes:

  • List of 20+ standard inclusion terms
  • List of 9 standard exclusion terms
  • Segmenting first year warranty vs service agreements
  • Listing covered devices
  • Denoting coverage and response times
  • Setting pricing and terms
  • Downloadable / customizable sample service agreement (Word Doc)

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Inventory ** ***** *********

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Comments (7)

Undisclosed Integrator #1

08/19/16 01:10pm

“Typically a percentage of total system price is used as the annual price of a maintenance agreement. 8-10% is common for a basic agreement that focuses more on annual preventive maintenance and next-business-day repair.

  • Replace any failed devices or components
  • Check and replace consumables as necessary (filters, batteries, etc.)”

Couple questions from a service newbie about the above points. First, what items are considered part of total system price? Just the hardware, install of hardware and programming? Not cable and conduit I assume?

What outside of preventative maintenance is covered typically with the 8-10%? Replacement hardware and labor (assuming hardware is out of warranty)? Or just labor?

Avatar

Armando Perez

IPVMU Certified | In reply to Undisclosed Integrator #1 | 08/19/16 03:44pm

in my willage, total means total.

Steven Wirz

08/22/16 03:05pm

Outstanding, thank you. I remember a few discussions about this awhile back but this really condenses things for us REALLY small guys.

Avatar

Brian Karas

IPVM | In reply to Steven Wirz | 08/22/16 03:08pm

Glad it was helpful.

If anyone implements a new service agreement program I'd love to hear details about the process, customer take rates, etc.

Undisclosed Integrator #2

09/15/16 03:28am

We have one with very similar language but more of a deep dive which includes explanations and scenarios of covered vs. non covered. And obviously we include detailed information on how to initiate a Maintenace request, how we monitor plus what I'll just simply call our competitive edge with our contracts and how we arrive at the cost.

Since inception 2 years ago, Most have purchased them and those that haven't wished they did. For those that didn't it wasn't because they didn't think they needed it, it was because of some higher up finance person who simply denies all Maintenace contracts. That being said, we have yet to sell a "contract" to someone who we haven't done the full installation for. Haven't tried much but we have had the opportunity and they haven't gone anywhere. Probably because it's hard to value an existing install and meet that competitive price point.

The biggest problem we run into is customers who don't give us access to their network to troubleshoot remotely, this really needs to double the cost of a Maintenace contract but good luck with that. I just make it clear that you can still have your contract but your response time is best effort.

Now if only the devices were smart enough to not keep alarming for the same errors consistently. It's certainly not like monitoring an intrusion alarm when all you have is email and uneducated devices sending notices for everything. Our service tracker will probably be more complex with all the rule routing than the systems themselves.

Undisclosed Integrator #3

12/30/16 07:40pm

Brian, I know this thread is a bit old but I wanted to know what the general consensus is on out of warranty equipment coverage.

1. Do Integrators offer to cover "anything" that breaks?

2. Is this marketed as "Extended Warranty" coverage?

3. What is the cost of this specific coverage on average?

4. How do you handle end of life products? Do you keep offering coverage forever?

Thanks.

Avatar

Brian Karas

IPVM | In reply to Undisclosed Integrator #3 | 12/30/16 08:50pm

It may be a few months old, but should still be relevant :)

Hopefully some other integrators can chime in with answers to your questions.

From the conversations I had in researching the post, I would say that covering "anything" is more of an exception case, and is why the recommendation to include a specific list of covered devices is recommended.

End of life product coverage may depend on availability of spares and equivalent replacements. Covering a fairly standard 1080p camera may not be a big issue, if it fails there should be plenty of drop-in replacement options. Covering something like a bluetooth-enabled thermal license plate camera (obviously a made-up example) might be more risky because you won't likely find an easy alternative if the unit fails. For that situation it may be best to identify esoteric equipment upfront and outline a failure response plan (e.g.: if the bluetooth thermal license plate camera fails, it will be replaced with product X, which will also require upgrading software to Version Y, at an estimated cost of Z).

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