A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.
Contractor Question:
“What terms and conditions should be included in a one-year labor warranty for new system installations and repairs? How should it address response times, manufacturer-covered parts, labor, refrigerant and claims related to work completed by a previous owner?”
Contractor University Expert Response:
“I especially appreciated that you brought up the customer experience in your question. I believe there’s often a balance between doing what is required by your terms and conditions and doing what’s ultimately best for your customer.
One of the most valuable assets you acquired through your acquisition was your customer base. Protecting those relationships is worth thoughtful consideration. I would recommend establishing a threshold that makes sense for your business—for example, $500. When I owned my business, if resolving an issue cost $500 or less, I viewed it as a worthwhile investment to retain the customer and avoid potential negative reviews, which can be far more costly in the long run.
I’m certainly not suggesting that you “give away the farm,” but having a clear policy in place can help your team make consistent decisions without having to evaluate every situation on a case-by-case basis. After all, it’s almost always more expensive to acquire a new customer than it is to keep an existing one.
I completely agree that having clear, written documentation outlining exactly what is and isn’t covered under your warranties and guarantees is an important part of setting expectations and delivering a great customer experience. Please reference these documents that can help you get on the right track.”
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