HVAC Service Training – Benefits of Maintenance Agreements

 

It simply amazes me as we travel around the country to provide HVAC Service Training with contractors of all shapes and sizes. We always inquire about how many maintenance agreement plans they have as a company and the response are all over the map. Most contractors feel like they have a good handle on maintenance agreements and are doing well, while other contractors have come up with all the reasons why they do not even have a maintenance agreement offering, or why they choose to not promote it. This is true of both small and medium sized businesses, regardless of how many years they have been in business.

 
Most businesses we interview have less than 1,000 bi-annual maintenance agreement customers on a prepaid or monthly billing contract. We see all too often HVAC businesses that have been established and serving a metropolitan area for more than 10 years that have less than 500 maintenance agreements!

 

Allow me to go off on the monthly billing contracts for just a second…when asked why companies don’t offer and sell monthly memberships they always respond one of two ways.

1.) They don’t feel any of their customers would ever sign up for a monthly membership.

2.) Their accounting department refuses to allow monthly memberships due to the amount of extra work they feel it would require.

Both of these excuses are complete crap! Your customers invest monthly in almost everything they currently own. As a society we rarely pay in full for anything. And as for your accounting department having to do extra work….our job is to make it easier for our customers to do business with us.
 
Back to the fact that most companies have hundreds of maintenance agreement customers rather than thousands, there is only one reason for this. Those businesses aren’t offering maintenance agreements to all of their customers on every call.

It’s really pretty simple math. One technician running on average 3 calls per day, 5 days per week, 50 weeks per year will run at least 750 calls in a year. That is 750 opportunities in a year, per technician (if you currently have only a few hundred or less contract customers).
 
Here is what that translates into (revenue) based on your success rate if you simply offered the agreement to everyone you see:
 
1 out of 10 say yes (10%): $14,625.00
3 out of 10 say yes (30%): $43,875.00
5 out of 10 say yes (50%): $73,125.00
7 out of 10 say yes (70%): $102,375.00
*Based on $195.00 biannual agreement cost
 
 
No matter where your business is located there is a good chance that seasonality and cash flow are two areas that your company stresses over. Adding an additional $50,000.00 in cash to your company (PER TECH) for work that needs to be performed in the shoulder months (slower time of year) seems to make sense, doesn’t it? If you broke that total investment of $195.00 into 12 equal payment of only $16.00 per month that would add between $1,200.00 and $8,400.00 per technician, per month into your bank account.

 
In addition to solving cash flow challenges and providing your technicians with work in the slower times of the year, maintenance agreements ensure your customers stay loyal to you. They are less likely to fall prey to the latest coupon that showed up in their mailbox. Keeping the customers you already have is more important (and cheaper) than going out and marketing for new customers.

When you have been invited into someone’s house twice per year to perform maintenance you also will find additional minor repairs that need to be performed in order to avoid larger, much more costly repairs in the future. When you find these minor repairs in the spring or in the fall it lowers the chance of a breakdown for your customer in the hottest and coldest times of the year.
  
Let’s just review all this real quick to make sure we are all on the same page.
 
Maintenance agreements benefits:
-Increased revenue & profits
-Increased customer base & opportunities
-Reduced marketing costs
-Bulletproofs your database (increase customer loyalty & trust)
-Additional repair revenue
-Increased sales leads (free – no marketing costs)
-Increased hours for employees
-Increased company worth
-And on and on the list goes….
 
 
If the majority of maintenance and inspection calls you run per year are to customers who are not enrolled in a bi-annual maintenance agreement with your company, you are losing tens, if not hundreds of thousands of dollars year in and year out.
 
The strongest structures that last the test of time are always built on a solid foundation. Maintenance agreements should be your foundation. If you need any assistance in developing or implementing a strong maintenance agreement program into your business, Success4others provides the best HVAC Service Training in the industry!
  
Our in-House Customer Service Representative (CSR), Service Technician & Sales professional courses will provide you and your team with real world skillsets and measurable performance results.
 
Would you like to learn how to increase your customer loyalty, escalate your inclusion rates and grow the bottom line of your business?
 
Then, contact us TODAY: info@success4others.com and request an over-view of our custom in-house services.
 
Go forth and be Profitable!
~Success4Others, LLC
“Revolutionizing the HVAC Industry one contractor at a time.”