Just been thinking...

[cr0ft]

We are fitting a new full central heating system this week. The customer told me on day 1 he was going to cancel his EON insurance policy for his heating system given that we were offering a 2 year warranty on it all (subject to proper annual maintenance).

Got me thinking. Given that we pressure test all the pipework (new and existing) and I've installed the central heating system with a magnetic filter etc, is there anything stopping me in charging a monthly fee similar to EON for the ongoing maintenance of said system past year 2?

Given that a good boiler will last for quite a while as long as the system it's attached to is in good nick I think it could be a nice money earner.

What do people think?

I am thinking £15 a month with a £50 cost per call-out, similar to the larger companies. I know this has been discussed before but I don't think it's been talked about just in the context of heating systems that we have installed ourselves.

 

[Nostrum]

It's the legal side I am put off by surely a contract is required?

Also you have to be prepared to take a hit every now and again, £150 PCB or a wireless stat etc

don't see why it couldn't work though if you get some form of water tight contract formed.

 

[albatross]

You need enough staff to be able to respond to a contract like that if you are on holiday/ill stuck on a job.

 

[cr0ft]

With a couple of us we will be able to cover what initially would just be the odd callout out of hours. I wouldn't imagine it being a huge amount of our work as we don't do that many heating systems to be honest but it's an extra earner potentially.

It's trying to work out how to price it that's key. You could argue that a local trade would provide a better service than the larger companies but I wouldn't want to be any more expensive than them.

 

[kay-jay]

This only works well with volume. Its a numbers game. Boilers are like cars you may buy a brand spanker but it could still be a lemon. Remember that you cant collect premiums while its under the manufacturers warranty.....by the time that expires its a bag of bolts just waiting to cost you money.....
If you have a few customers it can eat dramatically into your profits. If you have thousands of customers tjen the odds favour you more

 

[Ray Stafford]

You also have to be prepared to accrue for the losses.

We did something similar in a small way.

A few years ago, an oil boiler manufacturer went bust. We had been stocking and selling them.

The liquidator called to collect the money that we owed them for the last month or so of deliveries. We asked who was going to honour the warranty on the boilers that we had sold. After a lot of legal argy bargy, we agreed with the liquidator that we wouldn't pay the bill, but that we would take on the in-warranty liability for any boiler we had sold. I think the boiler was 2 years, and some parts were 5 years.

So we pocketed the money with one hand, but accrued an equal sum as a liability on our books. All went well for about three or four years - I think we paid out a couple of hundred quid in labour and a couple of minor spares. Then one boiler went badly wrong, and we spent over a grand throwing parts at it, and eventually gave up and gave the customer a new Grant, and paid the installer to fit it. That was nearly 5 grand on the one job.

 

[Resolute]

Isn't there a legal aspect as you are basically selling an insurance so you have to meet certain regulations.

 

[Linkyplumb]

What boiler you fitting Keiran with 2 year warranty?
Thought most come with 5 year minimum now

 

[lame plumber]

BG boilers all seem to have a one year warranty if you read their small print, must be the re badging that causes the unreliability 🙂

 

[albatross]

BG boilers all seem to have a one year warranty if you read their small print, must be the re badging that causes the unreliability 🙂

They do that so they can sell people 5 year maintenance contracts at the same time.

 

[AWheating]

BG boilers all seem to have a one year warranty if you read their small print, must be the re badging that causes the unreliability 🙂

stange that isnt it. A worcester with a BG badge only has a one year warranty, but with a WB badge it has five years. I wonder why that happens 🙂

4 years at 200 plus squids for 3 star cover is almost pure profit.

 

[Ray Stafford]

stange that isnt it. A worcester with a BG badge only has a one year warranty, but with a WB badge it has five years. I wonder why that happens 🙂

4 years at 200 plus squids for 3 star cover is almost pure profit.

And BG will have driven the purchase cost of the boiler even lower by removing the warranty liability.

Like it or not, they have cornered a large part of the market in "peace of mind".

 

[erpkid]

BG boilers all seem to have a one year warranty if you read their small print, must be the re badging that causes the unreliability 🙂

We don't usually have a problem quoting against BG. However when they are slack and therefore briefly competitive this re-balances the prices.

 

[PlumbersMate]

I work on the BG homecare and I would say 85% of the customers I visit have never called us out before having paid for the contracts for years. £50 a month for nothing!

 

[cr0ft]

What boiler you fitting Keiran with 2 year warranty?
Thought most come with 5 year minimum now

The boiler has a 5yr warranty linkyplumb. 2 year is my warranty on everything else on the system at the moment. Was considering changing that though.

 

[Ermintrude]

We give 5 years on boiler 5 years on stat,..... We used to fit Siemens stats.

Some custards want piece of mind and a good install / normally refer them as we rough!