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Are Your Service Agreement Customers Staying Loyal?

January 14, 2011
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I learned early in my heating and air-conditioning career that service agreements were a key component to building a successful residential HVAC business. In this industry, service agreements are suppose to help protect your business from a recession and from mild summer or winter seasons. When you have a greater number of service agreement customers, you also have more maintenance calls, higher average tickets on emergency service calls, and more equipment replacement sales. This is based on the popular thought that service agreement customers not only produce income during the off-weather months (September through October and March through May) but these customers are also loyal to your business. Now that we’re in a recession, does this hold true?  Are your service agreement customers staying loyal in this economy?

Here we are, about to leave this year behind and enter into 2011. There has been speculation by many that we’re at the tail end of the recession. There has also been talk that we are entering a new recession that will last another two years. Will we really even know the difference between these two recessions in the heating and air-conditioning business?

I’m seeing some trends with service agreements that may be useful to business owners in the HVAC industry. I’ve seen a slight 5 percent decline in service agreements and I’m seeing that some companies are up by 10 percent for the year with their service agreement customers. Most companies are combating loss of agreements by increasing their marketing and improving their customer service and sales training. This combination will also help to balance the peaks and valleys in revenue from year-to-year.

What about residential equipment sales? Are your loyal service agreement customers shopping around on the big ticket items? This summer, I’ve seen service agreement customers wait for days with no air-conditioning during the 90+ degree days to get the right price. I’m now seeing service agreement customers live with no heat while they get other estimates. This is an upwards trend that can be correlated to the recession.  There are things you can do to keep your customers loyal.

5 Sure-Fire Ways to Help Keep Your Service Agreement Customers Loyal

• Empathize with your service agreement customers. Show them that you understand why “in this economy” they may want to get other estimates.

• Equip your sales team with copies of your competitors’ estimates and train them to educate your customers on the differences.

• Show your customers letters from other satisfied customers who went through similar situations and chose to use your company.

• Offer your customers an interest-free payment plan to ease their unexpected expense.

• Don’t be rattled if your service agreement customer still chooses to get other estimates.  Let them know you’ll act as their consultant throughout their estimates, saying “Even if you don’t use us for the installation, you’re still going to need someone to do the maintenance.”

Service agreements are still the way to go in a down economy.  Patience, great communication, and training will help keep those service agreement customers in place.

Michael O’Grady works with American Specialty in Clark, New Jersey as a Residential Sales Manager and is the owner and publisher of the in-home sales training resource, Sales-Psychology.com. He conducts in-person sales training seminars and offers free webinars and tele-seminars for business owners, managers and sales professionals.  Sign up with Sales-Psychology.com to download a free e-book, “7 Strategies to Take Action on Your Greatest Sales and Business Goals”.
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Service Contract Sales

David
January 24, 2011
This is a great article... I myself really had my guys in-house sales focus on all of these initiatives and at the end of the day we still struggles to get our preventative maintenance contract and extended warranty sales up... Then I heard about these guys that are professionals in HVAC sales and since I have been working with them the numbers have been great! I made an extra $600,000 my first year with them! They even paid the $20,000 for me to get the license that I needed from the state of Florida to sell my own in-house extended warranties! Now my customers are loyal to me for 10 years guaranteed! Check them out! www.hvacpiggybank.com ask for Adam he takes care of my account and he is GREAT to work with! You can also call them at 855-AC-PIGGY

Great to hear !

Mike O'Grady
March 24, 2011
David, Thank you for the great feed back. It's always nice to hear a success story. Mike

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