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John Sciacca Writes...

Features, Reviews and a Blog by John Sciacca

Random Thoughts (Blog)

Random Thoughts (Blog)

Who's Gonna Step Up to Pay Up?

Posted on July 16, 2011 at 5:53 PM

As I sit here in my nice black leathery office chair, luxuriating in the cool, quiet air conditioned cocoon of my Custom Theater office on this warmish summer afternoon – the hint of the salty ocean hanging tantalizingly heavy in the outside  air – instead of being outside and enjoying the wonderfully puffy and sparse Ferris Bueller-like clouds floating by in the blue-blue sky, I am instead looking at an invoice from Grayman Climate Control, Inc.

You may recall that I had a bit of a thermostat malfunction earlier in the week. And by “malfunction” I mean that I updated the operating system on our store’s automation system which somehow glitched and sent our HVAC system into a “What do you mean you’re a heat pump?” conniption fit. Instead of not bothering anyone and just lying passively there on the floor, biting a wallet and drooling, this was a “turn heat on full blast!” kind of fit that ended up not being very passive at all.

Now, I turned lemons into lemonade and came up with a playful list of 11 things that you could do when your thermostat goes on the fritz and leaves you weltering and withering in 94 degree heat.

But the truth is, this isn’t really that funny now. This is an actual invoice that I’m starring at. And written on the invoice is, “Found bad capacitor. Replaced capacitor. Found unit running in heat mode due to upgrade performed on computer controlled thermostat system.” That was a capacitor that was working A-OK, 5 by 5, all-cool-all-the-time right up until the second that I performed the company suggested upgrade. Then...poof! Broken. And I’m soon sitting in 94 degree weather.

Also written on the invoice? $183. And these are $183 actual real, partly-coming-out-of-John’s-pocket dollars. Dollars that I don’t necessarily think my company should have to pay for.

And while this may be uncommon – not very often does a failed manufacturer part cause actual damages, though I’ve no doubt that at some point an amplifier has self-immolated and actually burnt something down; I mean, the law of averages and unintended consequences about demands that it’s happened like at least once, right? – it speaks to a theme that is all TOO common of the kinds of things we seem to face as custom installers.

We install something to the correct standard, it breaks, we fix it, and we eat all of the collateral. I talked about being tired of eating it in a previous post; about all of the "No Charge" worksheets that were coming across my desk. But I guess I *still* haven’t gotten my appetite back for this particular brand of crap sandwich.

When things break, it is virtually always at the burden of the installer to just “absorb” the costs. Even when manufacturers are great about handling replacing product – Definitive has been consistently wonderful about sending us replacement parts even when items are way into that nebulous and questionable warranty coverage period -- there are still PLENTY of actual, real out-of-pocket costs involved; the costs of retrieving the rogue unit, the time for repairing the rogue unit, reinstalling the freshie, testing to make sure it actually IS repaired and then paying the shipping charges to return the defective parts back to the manufacturer.

And at a time when gas is frequently pushing $4 a gallon, UPS is charging like $15 to even drive by and look at your store, and margins are thinner and thinner, these are very real, sucking-the-marrow-from-my-profits, kinds of costs.

The truth is, we install things that are often SO integrated that if something breaks, it is totally unreasonable to expect a homeowner/customer to retrieve it on their own. Seriously, I can rarely get a person to sack-up and just unplug their frickin’ cable box or remove a battery from a remote for heaven’s sake, you think I could get them to disconnect an A/V receiver, unplug a faulty surge protector or pull down a projector?  (That was a big, fat rhetorical. Not only couldn’t I get them to, for the love of everything that is good and holy, I wouldn’t even WANT them to! Being able to interact with the smart remote and press the button labeled “Watch TV” is about as high-functional as I want my clients to get.)

This doesn’t even include the time spent in the field testing potentially suspect gear. If you’ve been an installer for any period of time, then chances are you’ve spend looooong minutes on the phone (after looooong minutes of waiting on hold) with someone that said something along the lines of, “OK, let’s just try a few things before we declare this broken. So, what I’m gonna need you to do is completely blank the system and then let’s try reflashing it with some new firmware and then we’ll try like 10 other things before I’ll even think about considering that the piece you have MAY be broken. Now, this is going to take some time so...” That all takes time. Frequently a lot of it.

And, daddy is here to tell you: Time IS money. Either money I’m billing or money I’m losing.

Recently I had a wonderful tech support experience with David Bishop from Lutron. He treated me like a professional, was a total rock star about owning my problem and the whole thing cost me absolutely zero. Except time. But, it was in my own house, and it was my own system so I was a totally A-1, motivated, happy little camper to make it work. (And turned out to not even be a Lutron problem at all!)

But if it had been a client? I’d have been out HOURS of labor. And had a client that for weeks didn’t have a working lighting system. Making them think that I probably didn’t know what the hell I was doing (mostly not true) or that I sold them a crappy system (totally not true).

So, even when you’re note losing money, you can be losing something even more important: reputation and credibility. Because going forward, any time something breaks, you think they’re going to immediately going to error on the side of, “Wow, my installer is so great! Everything he puts in is just SO rock solid!” Probably not. Think they might be more likely instead to say something like, “Man! I hate that stupid system so-and-so installed! It is ALWAYS broken!” to some of their friends? Probably way more likely.

Now, I understand that service contracts could be a way of insulating us (me) from these costs. But really, isn’t that just passing the buck on to the customer? It just makes them pay – or gamble on NOT paying – for a mistake that really isn’t theirs either. Honestly, the person that should be shouldering this burden is the manufacturer. If you include a warranty and that product breaks within that warranty period, is it really thinking too far outside the box that the FULL costs of the labor to mitigate that problem should be covered? Including my travel, my gas, my repairing expertise and my shipping costs?

I doubt it will ever happen, but if a company really wanted to garner good will amongst the installer crowd, they could ditch the rhetoric of things like, “We’re protecting our dealers with exclusive territories” or “We’re stamping out all unauthorized Internet sales. Honest this time!” and say something like, “If our stuff breaks, we’ll pay you your costs to get it fixed. All of them.” I imagine that would perk up a few ears. I know it would mine.

Now, if you’ll excuse me, I have a $183 check to write...

Categories: July 2011, Rants, CTA

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Reply Michael Komlosy
11:27 AM on July 17, 2011 
Your article reminds me of something that happened to me. I am an owner of a home automation company in Cleveland called Smart Home Innovations. I had a nice, decent sized project to replace a homeowners existing system with the new Elan g! system. The customer also stated that he wanted a way to wirelessly broadcast the video from his Macbook to the TV. No problem, I say. I can do it all.

So, I order all the parts, product for this job. Through some research, I found a product by ***** (It rhymes with Schmatlona) that could do the wireless video. Sweet! I get everything installed, program the Elan system, do 3 zones of AV, calibrated the audio of the newly-replaced system. Everything is golden, the Angels come down from heaven.

Oh....wait....the wireless piece. I almost forgot (that works, too!). Mr. Customer allow me to show you the wireless video. I plug in the dongle, and get ready to transmit........nothing. The screen reads 'no signal'. No problem, let's try it again. And again, nothing. I'll call tech support.

"Hi, tech support, can you help me? I bought this wireless product you carry for a customer and it doesn't work."
"Ok, what operating system are you using?"
"Mac OS Lion"
*click*....dial tone.
"Hello? Is anyone there?"

I have gone back to the same customers house, a billion times, I have talked to engineers from NASA, and they still could not get this stupid thing to work. So, I call my rep to tell them I want the new wireless piece that just came out, and return this one. OK, no problem.

Three months later........

I get a call from Schmatlona. They tell me that I can send it back, but it will cost me $160 to do the upgrade. So, the unit cost $350 and now they want me to spend another $160 for a total cost of $510....for a piece that may not work with a mac. Not to mention, the time and trouble I have spent dealing with this stupid wireless dongle. IT looks bad on me that I recommended it, and the system still is not 'complete'. Ugh.
Reply John Sciacca
11:11 AM on July 18, 2011 
Michael Komlosy says...
Your article reminds me of something that happened to me...

Thanks for the comment, Michael. This is exactly this kinds of lost revenue that I'm talking about. When you factor in your lost time -- at the job, on the phone, then just dealing with the hassle of returns and accounting and tech support -- along with your physical costs of gas and travel, along with the good will and faith lost with the client, you can see how much is REALLY lost in these kinds of "that piece doesn't work" install issues.

Note to self: don't use Schmatlona with Mac....check!
Reply Ryan Arp
5:04 PM on July 18, 2011 
Hey John. One of my favorite topics. It's been a long running discussion in my business as well. The client buys the product because we recommend it. When it doesn't work the way we promised, their only answer (rightly) is "well, you're the one that sold it to me". That's code for "I've already agreed to the price I'm going to pay, now it's up to you to make it work". Unfortunately for dealers, we're at the bottom of the food chain and most times only have slightly more leverage than the customer.

I've tried before to get a replacement piece for something only to be turned down by the manufacturer until I've gone out and proved through a series of tests that it "needs" to be returned. I was offered that I could buy a new one and return the other one, but there would be a restocking fee. That's crazy!!

Here's another practice I've always questioned by manufacturers. Why are buy-in costs for smaller dealers the same as large dealers?

If a talented dealer in a small town with a smaller market wants to sell a certain manufacturer, why should he have the same opening order requirements as a substantial dealer in a large market?

Let's say an opening order requirement is $10k. Why would a dealer of revenue less than $250k have to pay the same as someone over $1m ?

Am I wrong about this?
Reply John Sciacca
5:11 PM on July 18, 2011 
Ryan Arp says...
Hey John. One of my favorite topics. It's been a long running discussion in my business as well. The client buys the product because we recommend it.

Hey, Ryan. I'm going to give a little truth here....some of your comments over at a Resi Linked In discussion group I re-read on Saturday helped prompt this post. So.....thanks! :-)

To your second point, my feelings on manufacturers and their line-in-the-sand sales figures is pretty well summed up in my experience with They Who Shall Not Be Named. You can read it here if you missed it the first time...
Reply Mario Nicholas
7:55 AM on July 19, 2011 
Denon amp faulty 18 mths into a two yr manufacturer guarantee - I remove it, ship it to the only South UK authorised repairer and three weeks later re-fit it, job done. It worked for ninety minutes! Went back, client very un-impressed, I fitted an Onkyo amp & ipod dock and sent the amp back to Denon repairers - Now in repairers for three months and I have after a huge amount of paperwork/phone calls and large company bullshit/policies got a refund.
Denon are geared up for large retail outlets not CI small concerns, MY MISTAKE & I won't make it again
- End result it cost me a small fortune to keep this client happy, he would never buy Denon again and I stopped supplying it too,
Reply Ryan arp
10:44 AM on July 19, 2011 
[John Sciacca]

Hey, Ryan. I'm going to give a little truth here....some of your comments over at a Resi Linked In discussion group I re-read on Saturday helped prompt this post. So.....thanks! :-)

Hey, glad to hear my rants help out! :)