As we approach the end of what I hope has been a busy summer for you, it is time to be preparing for those times of the year when, traditionally, the phone doesn’t “ring off of the hook.” Those are times that we need to make sure we are keeping revenue flowing and keeping our people busy. Remember, we wanted them to work long, hard, and extra hours when we were swamped with calls, so it is up to us to have a strategy to provide hours for them the rest of the year.
That makes this the perfect time for me to give another sales pitch regarding the importance of maintenance agreements to the long-term success of your business. Whether you are large or small, new to the industry, or an established contractor, a good maintenance agreement program will strengthen your entire operation. There are a number of advantages in having a maintenance agreement program for both the customer and the contractor.
For the customer, it reduces the likelihood of an expensive breakdown at the most in-opportune time. Most maintenance agreement plans include a discount (often 10%) for service work if needed. The promise of priority scheduling if/when service is required is another incentive for the customer.
From the contractor’s perspective, having a long list of maintenance agreements helps provide income and work for technicians throughout the year. It makes you the “vendor of choice” for the customer, which increases the likelihood that you are the one they call in the case of a breakdown. From the technician’s standpoint, not only is he/she getting the work, but usually a satisfied customer will request that technician in the future. And of course, “spiffs” are a nice bonus as well.
The good part is that selling maintenance agreements may not be as difficult as you think.
Here are the basics for getting started. First you need to establish your pricing. Use the amount of time that your average service technician requires to provide complete maintenance on one unit. Then add the average amount of travel time that you experience between calls and add that to the time above. Assume to begin that it is a single-zone home. Most maintenance plans include two calls per year — one on the outdoor unit and one on the indoor unit. Therefore, you can double the amount you have calculated to determine the total amount involved to provide two maintenance calls per year. Then, using your company’s hourly sales rate (including overhead and profit), determine how much the selling price will need to be for that maintenance agreement.
That will provide you with a base from which to start. We offer a “spiff” to our service technicians and office staff on each maintenance agreement they sell, and I recommend that strongly. You will need to add the amount you choose into the total pricing. For multi-zone systems, we use a similar built-up pricing method but only include one drive time into each of the calls.
It is important to keep in mind that occasionally there are special conditions or issues which may inflate the time required to provide the maintenance. It is important to have that time included in the proposal you provide. We have forms which the service technicians carry which explain everything we offer and we use a special, easy form, to be completed for a consumer to sign on. I will be happy to forward a copy of our materials to you if you email me at the address in my author bio at the bottom of this page.
Another feature that we have just begun offering which has been used by other contractors is a monthly automatic credit card payment method. We are finding several advantages to that system. These include receiving payment without any necessary action by you or your customer; it becomes a routine payment in the eyes of the customer, and doesn’t become one large payment once a year. When it becomes necessary to raise prices, a dollar or even two on a monthly charge almost goes unnoticed, as opposed to asking for $24 more annually.
This gives you a basis for starting or pushing your maintenance agreement program. Get your technicians and office staff on board immediately, and you will be amazed at the results. Happy selling.