HVAC Service Training – Maintenance Agreements 102
In a previous edition, HVAC Service Training – Maintenance Agreements 101 we discussed the value of implementing a maintenance agreement program in your HVAC business. We also demonstrated how one service technician offering a maintenance agreement plan to every one of their clients can generate tens of thousands of dollars in annual revenue for your company, easily! We also hit on the key point that maintenance agreements are really what give your business value, whether you’re building a legacy business or building an organization to sell down the road.
In HVAC Service Training – Maintenance Agreements 102 we take a deeper look at how we, as HVAC contractors can make things easier for our customers to invest in us. People are budgeted monthly, not annually. How much did you pay last year on your mortgage or rent? How much did you pay last year on your car or truck? Exactly! As consumers we only focus on what we can afford or not afford based on a monthly budget, not an annual budget.
We also never know what is really going on in our customer’s lives at the time of our visit. Maybe it’s time for Sally to renew her maintenance agreement which would require her to write a check for $235.00 today. Just before you arrived she receives a phone call from her mechanic letting her know she needs to buy a new transmission for her automobile. Money is most likely a huge stress for her when you arrive and her priorities are the transmission, not renewing her maintenance agreement. If you had the option of signing her up on an easy monthly payment plan and threw in the first month for free, it would probably be a more attractive option for her. Monthly options have proven to increase success rates, increase average tickets AND increase customer loyalty.
Look at the structure of most fitness businesses today, which are producing impressive numbers and enjoying huge success. Many of these types of organizations only provide monthly investments as an option when people sign up. Most are even waving the “signup fee” that used to be required when joining a gym. They are making it easier for more people to afford which is a win for them, however look at how that directly benefits their business at the same time. They receive a credit card or bank account information and have the authorization to bill that account for the agreed figure each and every month. How would this impact your business?
Regardless of what part of the country your business is located, one thing is for sure. You are bound to have slower months during the year than others. Monthly easy pay options are huge for companies during these slower times of the year. Regardless of weather, regardless of marketing efforts, you are authorized to deposit funds into your bank account every single month of the year and these agreements are typically auto-renew.
Look at what your Cost of Doing Business is each month. How much revenue do you need to generate just to pay your bills? Whatever your number is, this is what determines how many monthly agreements you want to set your sights on to start (your goal). Let’s say that amount totals $30,000.00 per month. If your monthly preventative maintenance program was $30.00 per month, you would need 1,000 monthly agreements to ensure your Costs of Doing Business expenses are covered each and every month of the year. Wouldn’t that help alleviate some of the stress many business owners suffer from? Of course it would.
The correlations are clear. The more maintenance agreements a company has, the more that company is worth, the more that company produces, the more happy customers they have, and the more that company puts to the bottom line (period).
HVAC Service Training Focus for this week:
1.) Review your existing maintenance program and determine what the monthly investment would be related to each of your options.
2.) Contact your financial institution and have them educate you on the proper procedures and paperwork required to start offering monthly investments to your customers.
3.) Modify or create maintenance agreement flyers that predominately focus on monthly investments, not total investments.
4.) Determine if there are other items you could include in your maintenance agreement as add-ons and figure out what that increased monthly investment would be. (Filters, Humidifier pads or anything else you would charge a customer for on a typical maintenance visit). Give the customer the option to include these items for an additional monthly investment, rather than having to stroke a check to the technician after the maintenance is complete.
5.) Set a company goal of exactly how many monthly maintenance agreement members you are looking to convert/signup. Communicate this number as much as possible. Be sure everyone in your company knows the goal and then track your performance towards that goal. Remember, this number is based on what your monthly Cost of Doing Business Expense is.
Success4others is committed to HVAC Service Training as well as CSR Training and HVAC Sales Training. If you have any questions related to maintenance agreements or need some help putting together options for your customers, please feel free to reach out to us so that we can work with you one on one to get a solid program up and running in your business today!
Thanks for tuning in!