The benefits of maintenance agreements to contractors and their customers are many and are, for the most part, universally understood. For contractors, maintenance agreements provide an excellent hedge against the peaks and valleys of the revenue cycle that result from the seasonality that is inherent in the HVACR industry and give contractors a better chance to keep employees busy year-round so they can attract and keep top talent. They also result in predictable cash flow and contribute greatly to the valuation of a business when it comes time to sell. For customers, the benefits vary depending on what their plans include, but most plans nowadays provide for a discount on any repair work, add-ons/accessories, or replacement installations that become necessary. Customers who hold maintenance agreements also typically enjoy a preferred status with their contractors, which offers them benefits, including front-of-the-line service. Perhaps most importantly, customers are able to build relationships with their contractors over time that result in trust, which is something that can be hard to come by and even harder to maintain in the trades, thanks to the unscrupulous contractors that seem to pop up in our industry every day.
While the benefits of maintenance agreements are nearly universally understood today, I’ve found that the benefits of perpetual maintenance agreements are not nearly as universally understood, and I believe they are something every contractor should seriously consider.