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Who Buys Service Agreements?
Gary Kayye of Kayye Consulting breaks down potential buyers into five groups.
Before you can successfully sell ongoing service agreements, Gary Kayye of Kayye Consulting says dealers must identify the types of people who buy from them.
He separates the technology buying market into five broad categories of customers:
Technology Enthusiasts Beta testers, for example.
Visionaries Early adopters. This has been the custom installation market for the past 10 years.
Pragmatists The so-called "Early Majority" mainstream. The custom market is just touching this stage of the market.
Conservatives The so-called "Late Majority" mainstream.
Skeptics Laggards.
In general, Kayye says that early adopters will tend to not purchase service agreements because they believe they can "fix it themselves." However, those in the early majority "want and need service contracts."
He says it is not necessarily true that early majority buyers will be price-conscious. Integrators will tend to think that because those later buyers have "waited" to their electronics purchases.
But Kayye says Early Adopters, who tend to be more educated buyers, are actually more price-sensitive.
He separates the technology buying market into five broad categories of customers:
Technology Enthusiasts Beta testers, for example.
Visionaries Early adopters. This has been the custom installation market for the past 10 years.
Pragmatists The so-called "Early Majority" mainstream. The custom market is just touching this stage of the market.
Conservatives The so-called "Late Majority" mainstream.
Skeptics Laggards.
In general, Kayye says that early adopters will tend to not purchase service agreements because they believe they can "fix it themselves." However, those in the early majority "want and need service contracts."
He says it is not necessarily true that early majority buyers will be price-conscious. Integrators will tend to think that because those later buyers have "waited" to their electronics purchases.
But Kayye says Early Adopters, who tend to be more educated buyers, are actually more price-sensitive.
Service Agreements 101
 | How to Sell Proactive Service Agreements Reducing your installation labor warranties and offering sales commissions on renewals can lead to 70% margins on service contracts. What is Proactive Service? The customer is guaranteed not only quick system repairs, but also regular service intervals. Why Aren’t Integrators Selling Service Agreements? More than half of integrators do not even try to sell service agreements, according to CE Pro research. Who Buys Service Agreements? Gary Kayye of Kayye Consulting breaks down potential buyers into five groups. | |
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About the Author
Jason Knott, Editor, CE Pro
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.
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