JK Technology Solutions Evolved their Revenue with Warranties

Published January 27, 2023
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Evan Pappas
JK Technology Solutions ScalePad Warranty Lifecycle Manager Assets Revenue MSP

Growing an MSP can be a path with many barriers to progress. Expanding to include more staff or more clients can often strain existing revenue and create the need to strain existing resources to bring in more money. Justin Kelm, President of JK Technology Solutions, was looking for a sales tool to support the MSPs growth and he found his solution with Lifecycle Manager.

The Lockport, IL, based MSP began operations in 2002 and grew to include 30 employees across locations in both Lockport and Bonita Springs, FL. JK Technology Solutions serves businesses of all sizes, and even does work on custom PC builds for individual clients. Those individuals will often ask to work with them in a business capacity as well.

What started as a search for a sales tool led Kelm to find Lifecycle Manager, which helped the MSP develop an efficient warranty renewal process while also building automation into reporting and asset management.

JK Technology Solutions is one of Lifecycle Manager’s most successful users in warranty sales as they work with their clients to solve warranty management ahead of time, preventing any issues from slowing clients down. That proactive strategy now extends to the business overall, allowing Kelm and his team to serve up higher quality service without wasting time and money.

Warranties drive sales and save clients money

With customizable warranty markups from within the dashboard, Lifecycle Manager has been a profit center for JK Technology Solutions. 

“It’s all profit,” Kelm said. “I think we mark everything up, I want to say we’re at the 60% mark with [Lifecycle Manager] for everything. Any type of margin you have is great, right now it’s tough with hardware and software. Prices are going up, margins are going away, and then availability is gone for a lot of things.

 

“So these types of services that we have right now, always available, they work, they’re proven, and they’re profitable. Everything that [Lifecycle Manager] offers with these products works out great for us. I never have any type of hesitation to try to sell one of these products to one of my customers. It’s because I know it works.”

Kelm began using Lifecycle Manager (then called Warranty Master) right after it launched in 2015 and started using it as a warranty sales tool. As part of their initial conversations with clients, JK Technology Solutions requires that a client’s servers and firewalls need to be under warranty to get MSP support. 

In their onboarding of new clients, Kelm will go through their findings and recommendations for a client’s environment to show them what needs a new warranty or what needs to be replaced. Kelm is adamant about quickly replacing hardware under warranty. The ability to recover from hardware issues allows businesses to stay up and running, minimizing downtime and impacts to their workflow.

Kelm knows from experience how difficult fixing hardware is when there is no warranty coverage. When one of their customer’s custom servers went down, Kelm had issues getting replacement parts to fix it because a server warranty check showed that it wasn’t under warranty. It took more than a week to get replacement parts for the server. 

The JK Technology Solutions team rushed to get a temporary server out to the client, which ultimately cost the client more than $2,000 in labor and parts.

“This will happen one day. We don’t wanna be on the other end of the phone, calling to tell you how much it’s gonna cost to get the server back up and running, or they’re gonna be down for a week because we can’t find the parts. So those are the points I try to make to them is ‘Yes we can find it, yes we can get it, but we have no control on how long it’s gonna take to get these things.’” 

 

“We use [Lifecycle Manager] a lot. If something fails, we’re calling to get the part shipped out, they go out there, install it, and it’s done. I don’t see any issues. So that’s why I keep reinvesting with [Lifecycle Manager] because it works and it’s a proven product.”

Building a consistent service agreement

JK Technology Solutions develops a service agreement where they expect clients to have their warranties auto renewed. Kelm has a sales representative oversee the warranty renewal process with clients, keeping him informed while the whole process moves forward.

“She goes in there, she checks them and sends me a list. ‘Should I invoice these?’ And I go through them and say, ‘Yep, invoice them all.’ We just invoice them without even contacting customers now, it’s just something they’re used to paying for. So we just do yearly renewals for the most part on all of our servers and do that until we replace it,” he said.

“So typically we do a three year warranty with Dell on the servers when we purchase and then after that for the next four years, we go through [Lifecycle Manager] until it’s about end of life.”

At first, some clients pushed back, asking why they needed to renew warranties. Kelm explained to his clients that servicing hardware under warranty is much easier and cheaper for them, especially due to issues surrounding parts acquisition because of supply chain problems and inflation.

“We have to find the part overnight, get it, come on-site, then we sit on-site. So you’re looking at $1,000 a day just to replace a hard drive compared to a $500 warranty renewal for the year,” he said. “Typically when I just do that little spiel right there. That’s usually all it takes for people to get with it. Production firewalls and production servers are always under warranty. We won’t support it if they’re not.”

Through warranty coverage, JK Technology Solutions is both saving their clients money from costly hardware recovery and bringing in more revenue with warranty sales. The team’s use of Lifecycle Manager’s warranty services platform have helped to increase their scope for new and existing clients, while saving staff time and effort.

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