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Protecting Your Investment

The Costs and Benefits of Extended Warranties

Part 1 of 4

By Thomas Franklin

Time is money may be the oldest cliché in history, but it’s no less true because of its age. If anything, in this on demand world, it is truer than ever. For a print service provider (PSP), ensuring your printer is running on the clock—or even around the clock—is critical.

Wide and grand format printers are machines, complicated ones at that. And as with anything involving chemicals, moving parts, and circuitry, they can breakdown. "With hardware, it’s not a matter of if. It’s a matter of when," says Mike Bisson, customer service manager, Mutoh America, Inc. Breakdowns mean production delays and those delays could be costly, equating to missed deadlines and damaged reputations.

Depending on the size and nature of a business, a firm may employ more than one printer to ensure uptime and meet crucial deadlines. Given the cost of a wide or grand format printer, few are brought into a business just for redundancy sake. Printers are brought on when the workload demands, meaning there is little capacity to pick up production slack if a printer goes down.

Most wide and grand format printers come with a standard one-year warranty. This out-of-the-box warranty generally protects from a mechanical failure caused when the printer was manufactured, or other malfunctions encountered during normal operation—although they rarely cover the printhead. There’s also phone support and typically parts and labor repairs. However, problems requiring a technician to physically come to your shop and work on your hardware may incur travel costs.

Once this warranty is up, you may have access to a tech support line to troubleshoot problems. That’s typically done during normal business hours, five days a week. To get a technician to come to a shop—if that option is even available—will require not only paying for his/her trouble, but becomes a first come/first serve basis. You are at the mercy of schedules—theirs, not yours.

Rather than fall prey to the vagaries of scheduling and the mercy of unexpected breakdowns, you could purchase the equivalent of insurance in an extended warranty. Many vendors offer fee-based service plans for added protection in the event a printer breaks down. These programs vary wildly, from multi-tier offerings to single options with a set of basic after-sale repair services. All provide enhanced service above the standard warranty, ensuring that help will be on-hand in a timely manner with nearly all repair costs—including materials, time, and in many cases travel—included in your contract price.

The real driver behind warranty purchases is uptime, says Bart Kulesz, VP, customer support, EFI, Inc. "How important is it to you?" If you purchase extended protection, "you’re not negotiating to get someone out to you. It’s an entitlement. They will be there and have the printer up."

It’s about peace of mind. "When you’re in the commercial print marketplace, you can’t be down," shares Karen Serrano, wide format product marketing manager, Xerox Corporation. Like insurance, if your printer breaks down, the repair costs will almost always exceed what you’ve paid for in an extended service plan.

To judge by the number of printers who opt for this additional protection, peace of mind is quite important. According to Tim Greene, director, wide format research, InfoTrends, roughly 60 percent of inkjet printer owners buy extended warranties or service contracts to protect their investments. Manufacturers such as Xerox report an even higher pick-up. Between 90 and 95 percent of customers opt for some form of add-on protection, says Melissa Joyce-Rosen, product manager, wide format color, Xerox Corporation.

For manufacturers, adding warranties to a sale helps them boost the bottom line, but also provides customers with a higher degree of satisfaction. "When you’re on a time and materials basis, it’s very hard to get the response time a lot of our customers need. That can leave them with a bad taste in their mouth," Bisson says.

It is also a competitive differentiator. As Xerox’s Serrano puts it, "You can buy the product, but you need the right people to keep you running." Hopefully, those people can come from your own shop—but if needed, you can easily rely on extended warranty plans to help you in a pinch. Next week learn about what several large format hardware vendors’ extended service plans look like.

Apr2008, Digital Output

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