3.5.5 PRICE VERSUS QUALITY

In addition to what attributes were suggested it was also good to determine what percentage of price versus quality should be used in these maintenance contracts. As mentioned this can be a very sensitive point, but many experts, reports and results do indicate that there are better results when there are more value or quality aspects. How to determine the correct balance might be considered a key lesson to be learned when pursuing these types of practices. The results from this survey are summarized in Table 13.

Client Range

Service Provider Range

Range

20% Price to 80% Price

20% Price to 70% Price

Average

57% Price

57% Price

Table 13 Price Range for Maintenance Contracts

These results are extremely interesting even though there were more clients responding to the survey than service providers. Also, from a research point there are not enough data, but the figures are astounding. On average the client and service provider perception were essentially the same even though the range and direct answers were totally different. Even the first author is surprised and thought that there would be a significant difference between client and service provider perspectives.

Again it does depend upon the type of contract model as the "Cold Climate Model" average is 65% price and the "Anglo-Saxon Model" averages 45% price. It would have been better to have more data, but even some statements can be affirmed from the limited data. It is certain that most clients would desire to get away from the lowest price situation and the same goes for the service providers. It appears that both agree that there should be some method to measure competency and performance.