Why do we issue a 10 year guarantee?
How many products can you buy with a 10 year guarantee? We are in an industry that has, for some odd reason decided to sell it’s products with a 10 year guarantee.
Our company sells quite a lot of uPVC windows. Our average order value for a double glazed, internally beaded, shootbolt locking window is £480 ish. We have a minimum order value of £500, so in theory, we should never sell a one window job. In practice, if we get a customer who dangles a carrot offering a full house full, as long as we can fit one window as a trail, we will do it. And, this window is usually smaller than average, so is less than the £480.
I have just booked a service call on for a customer with a broken down unit. We fit this one window 9 years ago. We have been out to this window twice already for a slight draft (that turn out to be the customer locking on night vent rather than fully closed) and a leak above the window, which turned out to be pointing 5 brick courses up.
Under our guarantee, we now have to replace this glass, at a cost of about £65 (including service engineers time and petrol).
We sold this job for £295, including VAT. The frame cost me £131.60, the glass cost me £26.55. It cost me £55 to fit it and say £5 for silicone and fixings.
That’s a total cost of £218.15 (including VAT), leaving a profit of £76.85 (26% marginL). I have already had 2 service calls at £35 each and now have another one with a cost of £65.
So far, with 12 months left on the guarantee, I have lost £58.15. Where is the logic in a ten year guarantee?
Why do we keep on offering 10 year guarantee’s on our products? Every time a new product or service is launched, we stick a 10 year guarantee on it!! We must be mad.
I, from this day forth, will guarantee not to offer a 10 year guarantee on any new product that I bring to market (unless my competitors doJ)
All those in favour, say I.
Aye
I only give 5 years on hardware not 10 and the customer is made aware when booking a service call that if the issue is not related to our works the visit may be chargeable, we very rarely do charge , unless the customer is trying it on .
Hi Kevin,
Do you make it clear to the customer, at the point of sale, that they only have 5 years on there hardware?
We tried it in the past, but got crucified by our competitors, so changed back to 10 years, across the board.
We also charge for service calls if the customer is trying it on – I must say though, it’s very difficult to do and we normally end up in an argument with them
Transparency is the key. Be up front wth your customers without tellng all the negatives. we tell them that we give a comprehensive 10 year which our ironmongery is only two years. as well as electrical goods. installation is not the full 10 years either…
We also after the fist two years have a call out charge. so often we get there and find that the window cleaner as waked over the roof. Or worse still the gutters are blocked with leaves and stuff.
The ‘public’ need to realise we are not all bad. and give us a beak.
they coudnt take kettle back afte the guarantee!!!