Is an Annual Service Contract worth it?


Nobody wants to pay over the odds for unnecessary items. So when you have just purchased your next essential piece of water treatment technology you want it to last and any problems to be fixed under warranty. The last thing you expect to need is a maintenance contract. Surely it makes sense to run the equipment under warranty and call the company if it breaks down. After all, you’ve taken your time to buy good quality at the right price. An annual service contract is just a sales person’s way to increase their commission without delivering any real benefits isn’t it? We ask John Kyle, Managing Director of Culligan UK a leading water treatment company, whether an annual service contract is really worth it?

Water treatment technology today is robust and operates efficiently and effectively when it has been designed and installed correctly. At the point of commissioning the equipment will be functioning optimally. The size and complexity of the equipment will dictate how regularly it needs to be maintained. “Water treatment technology, much like a car, needs to be looked after to keep it running well. All water treatment systems require care and attention to keep them performing optimally, so an annual service is always recommended particularly where water quality is mission critical. An annual service replaces seals and other components likely to wear such as filters. Valves are checked together with a host of other operating parameters to ensure the system performs at peak efficiency. Water softeners have salt replenished. When a service team has finished, the system should be as good as the day it was commissioned,” explains John.
Culligan’s water treatment systems come with a warranty, but a service contract and a warranty are different. “We warranty all our equipment against manufacturing defects and this comes as part of the sale price with the equipment. We stand by our warranty as this gives our customer’s peace of mind and confidence in the equipment that is installed. Again my car analogy works here. Quality cars come with warranties, but the manufacturers expect the vehicle to go to a dealer or garage for servicing. Vehicles are critical for our service team to get to our customers, so we make sure that they work efficiently and safely by having them serviced annually. If one of our vehicles breaks down, I would justifiably invoke the warranty on the vehicle because we are maintaining it,” says John. “Equally, we would fix any problem with our water treatment technology under warranty where our customer has had it serviced and is operating it as intended.”

Do all Culligan customers have a service contract? “There are some pieces of equipment that are maintenance free such as our ClearScale range of products. We would not expect a ClearScale customer to have a service agreement. These are sold as water conditioning units to commercial premises primarily on the cold-water feed. With our other technologies, a few customers buy technology and run it until it fails. We then get a call to come and service it and more often than not they take a service agreement out at that point. Several wait until it is out of warranty before looking at a service agreement. The majority of our customers take a service agreement out at the point of installation as they recognise water quality is process critical,” reveals John.

“Everyone in industry is looking for good value and we often see false economy in regard to customers’ initial perceptions on service contracts. Our team take time to present the costs of servicing and the associated benefits to the customer. This is not a sales person’s bonus scheme. In fact, we would make more profit if our customer’s called us out at the point of failure. We want our customers to have a well-functioning system and enjoy high quality water without the worry associated with equipment failure. An annual service contract not only delivers this but fixes prices over the agreement future proofing against component and consumable price rises. Customers purchasing an agreement at the point of installation save more money than those who wait until the warranty expires. On average a customer with a service agreement saves 20% on parts and labour compared to a customer without an agreement,” states John.
The price of running a water treatment unit to failure extends beyond the cost of fixing the water treatment system. There are many examples of production and operating costs resulting from water treatment failure. For example Water treatment is critical in cooling for data centres. This industry has calculated that only one minute of data centre downtime costs on average £4,800. Water treatment failure with steam boilers leads at best to scale problems and associated costly operating efficiencies or at worst catastrophic boiler failure leading to production shut down damage and potential fatalities.

“The key to a good service contract is to establish the benefits it provides you with and invite the provider to present the cost savings over servicing without a contract. Read the contract carefully and make sure it delivers what you need. All of our team can tell you readily what is most likely to fail and when across our range of equipment if not maintained correctly. That’s why our service plans are priced economically as we know what parts to carry routinely and how long it takes to make replacements. It’s also worth bearing in mind that customers on service contracts get priority should they have a problem. They shouldn’t be experiencing down time associated with their water treatment system, so in the very few instances this has occurred we get to them and solve their problem very quickly,” reflects John.

On reflection an annual service contract for water treatment technology makes good business sense provided the plan delivers the service you need. Where this is the case taking a contract out early provides peace of mind associated with dedicated service schedule and the expectation that your equipment delivers peak performance with low operating costs. It should give you a fixed budget for parts and labour, access to expert technicians who understand your equipment inside and out together with priority in the unlikely event of a breakdown. Effective service plans also extend the operational life of your water treatment equipment reducing capital and operating costs. It would appear an annual service contract is worth it after all. For more information contact Culligan UK’s service team: hwservice@culligan.co.uk