How Alarm Dealers Can Raise the RMR Bar With Maintenance & Service Contracts
M&S agreements are so critical to dealers’ and integrators’ profitability and success, as well as end-user satisfaction and loyalty.
Vertical Market Particulars to Consider
Those alarm dealers who install intrusion, access, video and fire alarm systems in large commercial and government facilities understand the need for service agreements. In fact, where the alarm company itself fails to offer one, the client many times will present one that the alarm company is forced to consider. The bottom line is this: If they fail to sign, someone else will get the ensuing service – someone else will enjoy the gravy.
“We like to provide our own terms and conditions with all of our contracts, and sometimes there will be occasions where these terms must be changed,” says John Larkin, senior partner with Electronic Systems Consultants of Columbus, Ohio. “When this happens it’s always done in face-to-face meetings where everyone concerned can agree on changes. If the situation escalates because of disagreements, then legal advice must be considered to move the contract forward.”
Larkin’s company, which commonly works in state-operated prisons throughout Ohio, has learned by experience that when signing any kind of service agreement you need to know all the facts that can affect its success. That includes the time it takes to stage service in these kinds of facilities, as well as the time it takes an escort(s) to move your technicians from place to place within them.
“Our biggest concerns when working in the correctional industry is the additional time that must be accounted for when it comes to checking into the prison and the additional time it takes to get through our service/inspection because of the need to have escorts,” says Larkin. “When it comes to government facilities, you must always be concerned about getting in and out of sensitive areas. This must be planned out in advance with the end user to ensure you can provide a complete inspection or you’ll have to document what areas were not finished and the reasons why.”
Larkin’s advice is valuable not only when working in a correctional venue, but also large complexes and campuses where escorts are required. Knowing all the facts is key to maintaining service contacts because if they are not profitable, there’s no use in having them. For this reason it’s important to train your technicians to report any significant changes
in a client’s facility, their procedures, and/or operations. So, in the next cycle the additional cost of service can be added to the contact to assure profitability.
Writing Your Own Agreement
The mechanics of writing contracts is far beyond the scope of this article, but let’s take a few moments to review some of the basic elements associated with an acceptable, legal service contract. Knowing these issues can help, even when it’s someone else that draws up the service contracts for you.
The first portion of any contract begins with information on both the alarm company and the customer. This should include the title of the contract, the date of the agreement and a description of both parties, such as addresses, phone numbers, E-mail addresses, etc.
The second portion of an effective service agreement should include a brief description of the service/product to be offered in the contract. This section should spell it out in plain, easy-to-understand verbiage so there is no question as to what your alarm firm is offering in consideration of the monthly fee that you charge.
Part three describes what is expected of both the alarm company and the end user. In a service contract, you, as the alarm dealer, will provide a service, which you will perform when the products described in part two require repair. The end user, on the other hand, will provide a monthly fee, which may be paid right along with their monthly monitoring or as a yearly sum. All of this, including the amounts, should be included in part three.
The fourth part of your service agreement should cover period of protection under the contract. In most cases, 36 to 60 months is common where some firms go year to year. Because most of these agreements hinge on dates, you should stipulate an effective date as well as a date of expiration, which should include a specific time of day (e.g. 12 a.m).
Part five is where you lay it all out. Here is where you define the who, what, where, when and how. It should be in easy-to-understand language and it should be as complete as possible. It should spell out the trigger and the ensuing service that your firm will provide, as well as a complete inventory of devices and the conditions under which you will provide said service.
The sixth section is the exclusionary portion of your contract where you will provide the conditions and factors that will exclude you from servicing said system components. Common exclusions include batteries, wiring, window screens, bulbs and LED indicators, parts of an existing system that you believe should be replaced but the client refused to change out (applies primarily to takeovers), power spikes and surges, acts of God, fire, misuse and abuse, and accidents where the system is damaged in some manner by the client or some third party. And by all means, exclude service outside of normal business hours because that can mean overtime: time-and-a-half, double or triple time.
Included in section seven is how the client is to request service under the conditions of your service contract. It should include in clear, concise language the steps the end user must take to invoke the conditions of the contract, including phone numbers and other contact information – how ever you intend for them to contact you. That could include a 24-hour chat window on your Web site as well as a special service form.
Section eight should include space for dates and signatures of the client, sales staff and management.
One way to write your contract with the above in mind is to use a competitor’s contract as an example. But whatever you do, do not copy it word for word. It’s important that you write it yourself or secure legal counsel to assist you either by examining what you have written or to write it for you. This is far too important to leave to chance.
(The suggestions expressed in this article should not be construed as legal advice; SSI recommends consulting an attorney to address all the legalities involved in contract drafting.)
…
Bio: Al Colombo is a longtime trade journalist and copywriter in the electronic security market. His experience includes 15 years as a field technician and 28 years in technical writing. Contact him at [email protected].
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!
About the Author
Al Colombo
Al Colombo is a long-time trade journalist and professional in the security and life-safety markets. His work includes more than 40 years in security and life-safety as an installer, salesman, service tech, trade journalist, project manager,and an operations manager. You can contact Colombo through TpromoCom, a consultancy agency based in Canton, Ohio, by emailing [email protected], call 330-956-9003, visit www.Tpromo.Com.
Related Content
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Commercial Integrator + Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add to your bottom line.
A FREE subscription to the top resource for security and integration industry will prove to be invaluable.
