Our love of the shiny-and-new means the last thing thought about when something is being installed is a consideration for when it will need to be replaced.
However, like the automobiles you sell, the digital displays in your dealership need to be planned for obsolescence to normalize cost and maintain maximum effectiveness.
To make your digital signage of the highest effectiveness and viewability, a TV and electronic equipment shelf life of 3-5 years should be planned for, and A/V infrastructure and cabling should be planned for a life of 8-10 years.
After this period things may continue to run well, but the increasing amount of issues requiring repair bring about a cost that trends higher than to bite-the-bullet with a planned full upgrade.
Knowing dealerships are very much month-to-month with their P&L, the more this is planned the less the impact a given replacement will have on a specific fiscal time period.
Year 1 can have costs for replacement, but these should always be covered by the A/V installers under warranty.
It is years 2-3 where the dealerships get lulled into complacency when they should be most aware of future costs. It can be worse when support companies include replacement maintenance of hardware and equipment during this time. They are essentially selling insurance for your TVs and infrastructure at a time when they can make the most money because repair issues are relatively infrequent. These years should not be maintained, they should be covered under warranty.
The optimal deployments are those that forecast for after year 3 a planned obsolescence of 25%/year will occur. Given this, a financial plan as follows should be put in place:
Year 2 – 10% of total costs banked
Year 3 – 15% of total costs banked
Year 4 on – 25% of total costs banked
With this type of plan in place, swaps of 25% of all equipment should occur each year from 4 on to keep everything “new and shiny” while avoiding high one-time costs or the need to dip into capital budgets.