RaskyR1 said:
Well it really doesn't fit my business as I'm only part time now and I only offer correction with no interest in doing maintenance washes. In the above scenario though it seems like you are selling them more on a maintenance package then a warranty, which I can see benefit in if you run a full service shop. I just don't see where the warranty comes in, as you said it yourself, they warranty really doesn't cover jack.
In my scenario I see my clinets every 12-24 months, get paid $350+ for the paint correction plus another $150 for the coating reapp, and I don't have to be burdened with warranty claims. I'm honest and upfront with my clients which is what keeps them coming back to me, not some terms of a warranty they have to abide by.
I do see were you are coming from in a lot of this discussion, it's simply not for me and I'm just answering your OP as to why I don't offer them. Detailing for me is a passion and it's not all about money like it is for some. I have a full time career and I'm happy where I'm at in life. Obviously I'm not going to do it for free though, as my time and experience is still worth something at the end of the day.
Cheers, :tea:
Rasky
OK, forget the idea of a warranty. I had an idea in my head, that's what it sounded like, I went with it. I'm now thinking pre-paid discounts.
You see your clients every 2 years, why not offer them a discount on a pre-paid service? Collect now, pay out later. If they have buyer's remorse and you wish to refund their money, you can. In the meantime, YOU earned interest on that money.
This is the same concept of why it takes banks 3-4 days to transfer the money and why credit card companies take 2-3 days to pay merchants. The average floating balance of all these "awaiting payments" can accrue millions in interest every year. There's a benefit and a downside to every service. Merchants make more money by accepting credit cards, but they pay a small fee for it. I don't see anyone complaining about that! Pay a 3% fee to make an extra $100, I'll do it.
For someone with smaller operations, neither of these ideas make sense for you. The benefit is not there, but we could be onto something. For larger companies, there's definitely a benefit. That's why car wash companies sell pre-paid wash cards, why gift certificates are free and why retailers love layaway.
Nth Degree said:
I like this thread because it does raise good points of contention a thought. While you are not wrong in your thinking about the financial benefit of it all, I think it just doesn't apply well to many of the small businesses that most of us are. There is a certain factor that is often not documented; buyer's remorse. If they feel duped by the deal on a warranty, a company rarely hears about it. They just never hear anything, which in their minds mean the warranty hasn't been needed.
Quenga,
Your camera is a good example of when a warranty makes sense. When regular maintenance is included it is an obvious choice. Diamond Jewelry and laptop computers are other good examples since replacing one stone or battery will likely cost the same as the warranty anyway.
Your paradigm is a bit different than many here as well in the sense that you are in it for the short term to make money. Once you move on, who is on the hook for your warranties?
Buyer's remorse, refund their money. No harm done to them, but you collected interest in the meantime. I have a savings account for every headlight restoration I do and don't count it as income. There's some fancy accounting behind it, but that's not my job, that's why I pay a CPA. They figure this stuff out for me.
You can include a regular maintenance, you can include a polish, wax, coating...whatever you like. The idea I have is not to screw over any customer. Offer them a benefit, and make money on it in the meantime.
Also, I warrant all my services, even if I go out of business or lose money doing so. My word is a lot stronger than any contract you can sign. I've only sold a few and they asked the same question. Answer: Even if I'm out of business, I'll do it as a civilian. If I move or can't complete the service, I'll refund your money or pay another detailer to fix it. Again, I have a savings account and records of those I've sold "warrantied" services to.
I'm not here to make short term money and run. I'll never quit detailing, I love this stuff. But, I probably won't always be able to handle it full time. I don't know what the future holds, but I'm not waiting for the chance to make money. I will never screw over a customer. I offer a money-back guarantee and stand by it. I will lose those battles when they come, but the odds are still in my favor. Shady companies that aren't prepared for it go under. Look at Groupon/Living Social. They came in, stole from small business and now they are seeing the backlash of their unethical behavior. But, how long have we seen the Penny Saver with coupons? They are still doing OK 50 years later.
We are in the business of detailing because we offer a better service than dealerships/car washes. Why not offer a better warranty or pre-paid program? If you're not selling gift cards, you can be losing out on money. Take the money, invest it into a liquid asset and if they want a refund, give it to them. In the meantime, you earned interest off their money. You already make cash deposits into the bank, you can write them a check and have them pick it up. Almost no time wasted on your part.
All ideas. I'm glad I asked the question!
