Should I buy a service contract on my Engineering Print System?

I regularly have conversations with customers who are weighing the decision of whether to purchase a service contract on their Engineering Wide Format machine. All prudent business people want to run their business as effectively as possible. Purchasing a service contract may on the surface appear to be an unnecessary expense. This is what I have found:

Customers who have a machine covered under a service contract do not hesitate to place a service call if the machine is operating below standard. In contrast, when a printer is not covered by a contract, the customer will typically put up with problems long before they place a service call on the machine. Sometimes these problems are endured for weeks or months before a service call is placed.

When servicing a contract machine, technicians thoroughly diagnose, clean, and replace worn parts on each service call. In the case of a Wide Format machine that is serviced on a time & materials (T&M) basis, the customer typically prefers to spend as little as possible on maintenance of their machine. Therefore the technician will simply fix the immediate problem, with little or no regard to preventative maintenance.

In the short term, the T&M customer often realizes a cost saving with this approach. However, as usage and neglect continues, the machine’s overall condition inevitably declines. As a result, output quality and reliability continues to suffer. Eventually, the machine often becomes too expensive to bring back to normal operating condition. In these situations, the perception on the part of the end user of the system is that “the machine is a piece of junk.” When in reality, had the system been maintained at a consistently higher level, it would have performed far more acceptably. The contrast in perception regarding the performance of a contract verses T&M machine is often striking. Most contract customers appreciate and value their equipment for the useful life of the product. Whereas many T&M customers endure their machine until it finally dies.

Comparing bottom line cost is often surprising as well. In the first year or two, a T&M customer will almost always come out ahead compared to the cost of a service. However, it is often after this initial period that problems begin to surface with the equipment due to normal wear and tear. Most businesses expect to realize 5-10 years of useful life from of a Wide Format printer. As the equipment sees more use, it is typical that more expensive parts begin to fail. Due to the failure of an expensive part, I have seen T&M customers spend as much in a single service call as the cost for a service contract for two years!

You might be thinking, “So why not skip the service contract until the machine begins to give me problems?” Most service companies will want to inspect a machine prior to placing it under a service contract. The intent of the inspection is to ensure that the machine is operating up to OEM standards. If there are parts that show signs of wear, these will have to be replaced at the customer’s expense prior to placing the machine under contract. After a few years of minimal maintenance, it is not uncommon for this cost to run $1-2,000.

So if you are weighing the decision whether to purchase a service contract, I ask you this simple question: “Are you feeling lucky?”