Savings

If you offer extended warranties or service contracts, compare the cost to replace a timer versus the cost to have the timer repaired.

Activity	Scenario 1 – Replace Timer	Scenario 2 – Repair Timer
Service Call Fee	$75	$75
Estimate to complete repairs	$350	$50
Customer Decision	Replace with new appliance	Repair the appliance
Cost of new Appliance	$600	n/a
Delivery Cost of New Appliance	$30	n/a
Disposal Cost of old Appliance	$25	n/a
Total Cost to Customer	$730	$125
Your Cost to have timer repaired	n/a	$25
Your total profit	$75	$100
Customer Satisfaction	Low	High

Don’s Timer Service repairs the timer and you are able to pass the savings on to the customer plus charge an additional fee for handling and reinstalling the timer. In this case, your profit increases to $100 plus you have a very satisfied customer.