Why You Should Add Extended Warranties to Your Managed Services Offerings

Most service level agreements (SLA) between MSPs and customers cover equipment while under a manufacturer’s warranty, but what happens when that warranty runs out? It could make for an awkward situation between the provider and the customer.

To prevent such a scenario, you should consider adding extended warranties to your service offerings. At APC by Schneider Electric, we offer extended coverage of up to six years for our UPS and PDU units, depending on the product, which you can deliver to your customers as a way to protect their IT investments.

An extended warranty delivers peace of mind. The additional coverage is like insurance: You may ultimately not have to use it. But if you do, you’ll be glad to have it because the alternative is far more expensive.

Service Add-on

For MSPs, we recommend making extended warranties part of your overall service offering. If you include the coverage in what you charge the customer for all your services, this gives you a way to spread the cost of the extended warranties over a period of time – much like you do with most solutions delivered as a service.

The customer gets a convenient way to pay for the coverage, while you get another opportunity to add recurring revenue, which is always desirable from an MSP’s point of view.

Original Product Sale

The best time to sell the extended warranty is during the sale of the UPS or PDU unit. This is when customers are attuned to the purchase. They’re most likely to opt for the extra coverage when they are thinking about limited factory warranty expirations, and how the extra coverage helps protect the investment they’re about to make.

If customers decline extended warranty at the time of purchase, the chances of selling it later are much lower. And even worse, in many cases once that UPS or PDU is sold, we aren’t likely to hear back from the customer about that unit unless something goes wrong.

Various Options

Customers have various options when deciding how much extended coverage to buy beyond a product’s limited factory warranty (typically two or three years). Coverage is available in one- and three-year increments, and up to a total of six years. Warranty renewals end at six years, including the factory warranty (two or three years) and extensions of three or four years.

Keep in mind warranties are different depending on the product, so work with your account rep to make sure you get the all the information you need to help your customer make the right decision on an extended warranty.

Infrastructure Protection

If you encounter resistance from customers regarding extended warranties, remind them why they buy UPS and PDU products in the first place. It isn’t because they want the products, but because the products protect their entire IT infrastructure investments. It’s the servers, computers and networking gear they want to protect, so remind them that when they buy a PDU or UPS extended warranty, they are doing so to protect their whole IT infrastructure.

For more on extended warranties please visit this page.

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