JANUARY 2004
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Offering Maintenance and Support Services
Is Good Business for Vendors and Consultants!
by William S. Wyler
Schwartz, Manes & Ruby
Why should a vendor of technology products or a consultant offer maintenance and support services? The answer is easy - it is both good business and good for business.
M&S services demonstrate to clients that a consultant is a serious company, not a fly by night vendor, which could disappear tomorrow morning. As purchasers become more sophisticated, they are looking for M&S services as part of their initial acquisition. A company which does not have the capability to offer M&S services will be at a growing disadvantage. Serious customers will demand M&S services and failure to have those services will cause many clients to simply look elsewhere.
M&S services provide a level of comfort to clients. If something goes wrong they know it will be fixed, which will lead to increased sales. M&S services do not have to be complex. With a little work, most software or other non-hardware vendors can create the ability to service their products online. For companies which do not wish to create their own online M&S system, one can be licensed. With online service, even the smallest company can offer nationwide or even worldwide M&S services.
M&S services, when set up and handled properly, are money makers for vendors and consultants. Maintenance and support services are generally offered to clients in two ways - by a services contract, which will provide a steady income stream and clearly defined obligations, or on a time and materials basis, for which the consultant will generally charge a higher hourly rate, but for which there is no steady income stream, since the consultant is only called when something goes wrong. If the technology product is reliable, very little will be earned without the steady income of an M&S service agreement. Either way, a properly crafted maintenance and support program should make money for the vendor, while helping to increase sales by offering desired protection to the client.
An M&S agreement can offer multiple levels of service at multiple pricing levels. These levels of service include increased amounts of available covered service time and increased benefits as higher levels of service are ordered. Assuming the software or system is generally reliable, the stream of income will be steady, while the actual services rendered will drop off a few months after an installation, when most errors are caused by some initial system incompatibility or setting, which can and should be corrected, or by unfamiliarity with the new product by the client's personnel. After the initial flurry, most M&S work is taken up with updates and new versions of the technology product.
Servicing web sites is not quite the same, but it is similar and the value for the customer is still present. Many customers will purchase M&S services for their web sites, if their web designer offers it. Most web designers have not yet realized the added value they can both provide and earn with web M&S agreements, instead choosing to rely upon time and materials billing, which is both highly uncertain and tends to upset clients.
The most important requirement for making M&S services a good business option is to have a well drafted M&S agreement. It must not only lay out consultant's obligations, it must also limit consultant's obligations and exposure. It will also provide for customer charges for M&S services which are beyond the agreement or in excess of the services chosen by the client.
Unfortunately, the unreasonable or over demanding client, which a few consultants have suffered, can make offering services a nightmare. However, an agreement which properly describes both the scope of M&S services and limits of a consultant's responsibility will be protected form the unreasonable client or at least in a position to charge additional fees for those services rendered, which are outside the M&S agreement.
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