Let’s IllumeTALK about whether or not a 10 year lighting warranty is relevant as technology continues to advance.
In this episode, host Aaron Woloszyn IllumeTALKs to Erin Plivelich about technology’s impact on the rapid iteration of lighting products, and why in 5 to 7 years many will wish they didn’t invest a 10 year lighting warranty.
Learn more in the second episode of IllumeTALK:
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IllumeTALK, Episode 2: The 7 Year Itch – An Honest Look at a 10 Year Lighting Warranty
Aaron Woloszyn (AW): How many 10 year commitments have you made in your life?
Think about it for a minute – other than marriage, your school loans and a mortgage, you probably don’t have many.
In a world where technology is consistently advancing, why would you want to give that level of commitment to a lighting solution? Today we’ll challenge the idea of the 10 year lighting warranty.
Hello everyone, and welcome to the second episode of a IllumeTALK. I’m your host Aaron Woloszyn.
If you didn’t get a chance to listen to our first episode, I’d suggest taking a few minutes of your time to listen to that as well. Before we get going, I’d like to give a shout out to everyone who has given us feedback on this podcast. It’s been great to hear everyone’s excitement about our new venture into this space. We’re really enjoying it and are happy to hear you are as well!
Remember, if you have any questions or subjects that you’d like us to cover, reach out and let us know!
Today, I’m once again joined by President of Illumetek, Erin Plivelich. Good to have you again.
Erin Plivelich (EP): Hey! Great to be back.
AW: Let’s get today’s conversation started.
EP: OK, what are we talking about today.
AW: Let’s IllumeTALK about what I like to call the myth of the 10-year warranty.
EP: Oh, that’s a good one. It’s become a hot topic – more openly debated in the last year or two.
AW: Agreed. I’m looking forward to getting input on a few things today. Can you give me a quick overview on what a 10-year warranty is?
EP: Do you want my honest opinion? I think the 10 year lighting warranty is a sales gimmick.
But what the fixture manufacturer is going to tell you is that the 10-year warranty came about from the fact that they were able to improve the chip technology, and the overall design of the fixtures, in order for them to handle heat better and allow for a longer life of the product.
LED fixtures are made up of several different components with several different warranty limits and exclusions associated with them. The “how” and “why” of where the 10-year warranty came about has everything to do with the original cost of LED and how that could be justified in the minds of the FM (Facility Manager) as he’s making a big purchase decision –spending much more money on his lighting than he ever spent on it before.
AW: So, and please correct me if I’m wrong, it sounds like the end user wanted a longer warranty to potentially help justify the cost of these lighting upgrades.
EP: I think that manufacturers needed to justify the additional cost. I mean this was a very expensive product to go to market with when solid state lighting first came out, and one of the best-selling features for solid state lighting was its durability and its long life. So, how do you market that other than to put it with a warranty that really drives home the point that this fixture will last longer than any other lighting that you’ve installed before?
It makes perfect sense. It just… is it still relevant is the question.
AW: And, the last thing you want to do is mislead people into buying a 10-year warranty.
Music Transition to Segment 2
AW: Well before LED became mainstream, someone could feasibly install new lighting and wait five to seven years for that product to be out of warranty before relamping or upgrading. But, what we’re trying to say is, today with the advancement in lighting tech and additional controls, that upgrade mentality has to change.
EP: It needs to. Let me give you an example.
For cars, we measure the performance of the car by miles per gallon. With a lighting system, we measure the performance as lumens per watt.
Right now, this is important when considering LED upgrades.
So, as an example, today we look at a system that’s 100 to 130 lumens per watt and, for some fixtures, in a few years we will see that increase to upwards of 200 lumens per watt. What we can do today with a simple LED upgrade is cut energy usage by 30 to 60 percent. But in a few years – with that lumen per watt – increase we’re going be able to cut back energy usage even further by another 35 percent.
AW: We are looking at several years down the road, but this is a real consideration today isn’t it?
EP: Yeah it is. I mean I think you need to look at it a couple of ways.
Right now you can buy a great, quality system at a really great value – grab your energy and maintenance savings, see a great ROI, a two-year payback, and then in several years upgrade that system again as technology evolves even further.
It’s – in my opinion – it’s not a 10-year timeline anymore.
AW: So, I’m just going to go ahead and ask you. Do you support participating in a 10 year lighting warranty?
EP: I support in participating in the needs of the customer.
What I want to be able to do is present the customer with all of the options available to them. And if it’s important for them to bring a 10-year warranty back to the table – if that’s how they’re going to be able to sell this system – then I’m not going to cut them off from that option.
It’s like playing the “Progressive Insurance card”. You want to show your customer everything that they have available to them and make sure that they understand the price available; because you are paying for that 10-year warranty.
It may not seem like it but you are paying for it because you are paying for a more expensive fixture that has a heat sink in it that allows that fixture to perform at optimal levels for 10 years. So, make no mistake, you’re paying for it. But, we want to be able to give all of those options to our customers so that they can make the right decision for them – we can meet them where they are, we can give them guidance, and then help them implement their solutions moving forward. And, if it means administering and managing a 10-year warranty on their behalf we absolutely are going to do that for them.
Music Transition to Segment 3
AW: Based on what you’re saying and in the research that I’ve done, it’s obvious that 10-year warranty has made for great sales and marketing pitch in the past. Why is it important now for people – especially FMs, the facility managers – to understand this concept and see past the gimmick?
EP: Well, first of all I think they need to make sure that the manufacturer giving them the 10-year warranty has actually already been around for 10 years, and is going to be around for 10 more years in order to honor that warranty.
It’s not an apples-to-apples comparison anymore.
Back in the day you were looking at the dominant lighting manufacturers – Philips, Sylvania, G.E. – and now we have a lot of new entries into the market and people want to make sure that they’re vetting their choices appropriately, and that they’re not just being led around by the nose at the promise of a 10-year warranty.
After that, they need to really understand what the value of that product is and what they’re paying for; and they need to make sure that owning this system for 10 full years is really the right decision that they’re making for their facilities.
AW: You know and I absolutely agree with what you’re saying and I think it’s time to reconsider what a 10 year lighting warranty means. And your organization’s decision making process.
AW: Can we talk about the people making these choices – the facilities and energy managers?
EP: Yeah. First of all, I wouldn’t want to be in their shoes these days. They have a tremendous burden to carry.
I think that the facility managers of the world – particularly in the retail sector, which is a sector that I am very familiar with – have a huge opportunity to bring additional value and savings to their organizations, but they have a huge burden to make sure that they are delivering the best performance and the best cost savings to their organizations too.
But the decision making process is also evolving and it’s moving more towards the I.T. professional in the corporation. The C-suite level players are getting more involved, and possibly even marketing. I mean take a look at Target, for instance, and what they’re doing with customer positioning.
AW: So, for those of you listening who are unfamiliar with that, what is Target doing?
EP: So, they are implementing a lighting system into their stores – a test of lighting upgrades that include customer positioning. It’s a great opportunity to really see what the next level of lighting infrastructure is going to be able to do, not only for energy efficiency and maintenance savings, but if it can actually improve the customer experience and improve conversion rates for Target. So lighting has an opportunity to increase sales and customer engagement which is really the exciting new frontier. That’s the direction that digital lighting is going.
AW: Looking at Target’s model then, it’s really quite easy to understand how the lighting infrastructure is changing and just how different it might be in 10 years.
EP: Well, yeah. Technology is not slowing down. The rate of change and iteration of product is as fast as it’s ever been, and this is probably the slowest it’s going to be right now. So why would you want to cut yourself off from advancements in technology just because you have a warranty to play out?
AW: That’s a good point. More times than not, portfolio wide lighting and energy upgrades cost hundreds of thousands if not millions of dollars.
EP: These are big decisions. There’s a lot of money at stake.
AW: Yeah, there’s a lot of things to consider, and it’s so important to understand where the 10-year warranty fits into this modern day decision making process. I think we could probably talk about this for another hour.
AW: But, unfortunately we don’t have that kind of time. Can I have some final thoughts on the 10-year warranty and what you think of it?
EP: Well, back to your original point at the introduction of this podcast – what kind of tenure commitments have people made in their lives besides their marriages and their mortgages?
AW: And their school loans.
EP: And their school loans. That’s right.
Think about the television that you bought that has all that great technology loaded into it. You get maybe a 3-year warranty with that? Cell phones are now a one-year warranty.
When you’re talking about a digital technology. You need to start thinking about warranty differently. And that’s the point, ultimately, that we’re really trying to make is – the traditional warranty conversation for lighting is not going to be the same conversation in another two or three years.
AW: So, in a nutshell the 10-year warranty just doesn’t hold as much weight as it once did. And you can make huge strides in the coming years by reconsidering its importance and possibly even removing it completely from your decision making process.
Erin, I’d like to thank you for again partaking in IllumeTALK.
EP: My pleasure. I’ve really enjoyed it.
AW: Me too.
If anyone out there has any questions for us, please don’t hesitate to reach out on LinkedIn or through our website illumetek.com – that’s I-L-L-U-M-E-T-E-K. For more news and to stay updated on our podcasts you can follow us on Instagram @illumetalk – that’s I-L-L-U-M-E-T-A-L-K.
A special thank you to producer Brigid Coyne and audio engineer Dave Douglas.
IllumeTALK is a production of Front Porch Media. To learn more about this and other podcasts, please visit thefrontporchpeople.com.
Thanks for listening. See you next month!