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
• 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
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”.