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Whether an HVAC contracting company is large or small, new to the industry, or an established entity, a well-manicured maintenance agreement program can help strengthen the entire operation. Maintenance agreement programs offer a number of advantages for customers — fewer breakdowns, priority service, service discounts, equipment efficiency, etc. — and for contractors, including more efficient scheduling, guaranteed revenue, work during down times, and more.

Customer Relationships

Maintenance agreements allow techs regular access to homeowners’ residences, granting them a greater ability to foster relationships with their customers.

“Maintenance agreements allow us to create relationships with our customers,” said Alana Ward, president, Baggett Heating & Cooling, Clarksville, Tennessee, which currently maintains around 850 maintenance agreements. “We visit twice a year, which allows us to get to know our customers.”

Vince DiFilippo, president and owner, DiFilippo Service Co., Paoli, Pennsylvania, said his company maintains approximately 1,600 maintenance agreements with an annual renewal rate of 83%. Maintenance contracts allow the company to keep customers informed and close.

“Our maintenance agreement program allows us to take care of our customers,” said DiFilippo. “They get 20% off parts and labor, receive priority service, get notifications when tune-up times are available, and have the option to pay using a monthly payment plan.”

The main purpose of maintenance agreements is to build a network of your customers, which will pay itself back in tremendous dividends, said Butch Welsch, president, Welsch Heating & Cooling Co., St. Louis.

“The benefits to the company are obvious; they lock in the customer, bring cash in earlier, and provide work for the service techs during the traditionally slow times of the year.”

Nancy McKeraghan, co-owner, Canco Climate Care, Ontario, Canada, said a maintenance agreement allows the company to “own the basement.”

“Once we’ve implemented an agreement, we have first shot at any new equipment or service that is needed,” she said. “We call customers in advance, so that we’re ahead of the process. Most customers are very thankful that we’re looking after their well-being.”

Step-By-Step Process

All HVAC maintenance agreements are not created equally. Most maintenance agreement visits generally include a cleaning, safety inspection, static pressure reading, and filter replacement. Many contractors offer refrigerant level testing and an evaporator coil inspection, while some offer to remove the blower wheel and conduct compressor efficiency checks.

FILTER CHECK: Most maintenance agreement visits include a cleaning, safety inspection, static pressure reading, and filter replacement. (Courtesy of Getty Images)

While some customers may flock to low-price, $59 service offerings, many contractors warn that customers often get what they pay for.

About four years ago, Vassar Service of Richmond, based in Mechanicsville, Virginia, transitioned from offering traditional maintenance agreements to high-performance maintenance agreements. The process required around four months of weekly training with a National Comfort Institute (NCI) instructor. According to Cliff Dennis, president and owner, Vassar Service of Richmond, high performance means ensuring the equipment is delivering what it’s designed to deliver as best as it can from a mechanical standpoint.

“With a high-performance maintenance agreement, we’re testing in, to know where we’re at, and testing out, to show our progress and discover how much further we have to go,” said Dennis. “Even if we’re working on a two-year-old system, we're still going to test and pull the blower wheels and check them. We're also going to check on the compressors and perform a refrigerant leak search. We feel it’s our job to check and verify how those units are working and verify their condition and longevity.”

While the move to a high-performance approach increased the service’s price drastically — from $60-$80 to around $225 — Dennis deemed the evolution of his maintenance program a win-win.

“It was a little intimidating at first,” he said. “We dug into our numbers and figured out what it was going to take to provide the level of service we felt was necessary. Previously, we weren’t collecting enough data. Now, we’re able to gather the information we need and present the next steps as options for customers.”

Dennis said, when shown the benefits appropriately, most customers opt for the upgraded package.

“If you show customers the $59 service next to the $227 service, and demonstrate the comfort, health, and safety benefits they receive when they purchase the upgrade, most will move forward with the more extensive option,” he said.

Guaranteed Scheduling

Calculating the value of a maintenance agreement comes down to simple math. A company that manages 1,000 maintenance agreements at a price of $159 each can quantifiably count on nearly $16,000 in revenue.

Retaining a high quantity of contracts up not only keeps the money rolling in, but it keeps your techs busy.

“My dentist, who is a client, suggested we schedule your next visit before we finish our current visit, like most dental offices do,” DiFilippo said. “So when we offer a tune-up, we say, ‘Six months from now, what's a good day for you?’ Pre-scheduling allows us to know exactly what our calendar is going to look like, which allows us to staff accordingly.”

Getzschman Heating in Fremont, Nebraska, serves about 4,000 maintenance agreement customers. Company president Scott Getzschman said keeping those contracts active is vital to his company’s success.

“Our techs know that maintenance agreements keep them employed,” he said. “Regardless how many agreements a contractor has, you have to keep selling them. While a customer may not buy a maintenance agreement this time, that doesn’t mean they won’t buy one next time. We incentivize techs with a spiff and allow them to throw a dart at a dart board decorated with prizes. Contests like these keep our guys excited and motivated.”

Training Techs

Maintenance agreement calls are great ways to nurture green techs. To ensure techs are properly completing the process, some companies propose creating a checklist.

“We’ve created a script that provides step-by-step instructions in writing,” said Dennis. “We train techs on this step-by-step process to ensure everything’s done properly.”

Ward said it’s important to include customer service reps and dispatchers in the process.

“These are the individuals who will be communicating directly with customers,” she said. “I’ve found my less technical people sometimes do a little better job of seeing the holes in things. The nontechnical people are prepared to answer the obvious questions, but we need to be able help them avoid technical communication pitfalls as well.”

Beware of Lofty Expectations

Customers need to be aware that a maintenance visit or tune-up won’t transform a faulty unit into a pristine machine.

“HVAC systems are a lot like people,” said Ward. “If you don't work out for 25 years and you go to the gym, the next day you are going to be in severe pain. The same can be said for a furnace or air conditioner. If it’s been 10 years since the system was serviced, you have to be blunt with customers and tell them that our service may not be beneficial to their unit. HVAC service is not magical, and this equipment is not designed to last forever.”

Much like human bodies, as systems get older, more maintenance is necessary to keep it in tip-top shape.

“You have to keep this equipment maintained to ensure it’s operating properly,” said Dennis. “Much like your car, if you don’t perform the necessary maintenance, it’s simply going to stop working.”