08.04.2008 — 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.

		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.
Integrators are recognizing that they can build "clients for life" with service agreements rather than continuing to look at customers as one-time sales opportunities.