Service agreements are a solid source of recurring revenue for your service business. They keep your cashflow strong during your slower season and increase customer engagement through customer visits once or twice a year.
So how can you increase the number of service agreement customers and make sure that you are going above and beyond to service and keep these customers? Here are a number of steps that will help you through the process. You’ll be racking up service agreement customers in no time!
In this article we’ll cover:
- How to provide a clear value to the customer, increasing your chance to land new service agreements
- Offering incentives to customers
- Offering incentives to staff
- Ensuring the price is ideal
- Implementing service software to aid in the maintenance agreement process
1. Provide Clear Value
In exchange for year-round work and recurring revenue, you have to provide real value to the customer. Agreements are a two way street.
Why should they pay you for service agreements? You have to position this service as taking care of your customer and saving them money (which is exactly what you are doing!) Remember, service agreements benefit the business and the customers.
As a professional, you are keeping their air conditioner working in the hot months and the house heated as the weather gets cold. By providing preventative maintenance you are making sure their equipment is running smoothly limiting any costly breakdowns.
Use language that piques the customer’s interest such as “energy savings,” “improved safety,” and “lower cost of operation.”
Try to show the customer cost savings comparison if they sign a two year service agreement versus their unit breaking down over time. Often the savings can be in the thousands of dollars.
2. Offer Incentive to Customers
Many times you just need a better process of explaining the maintenance agreement benefits to your customers. Offering a % discount on the services you are performing if they sign up for a maintenance agreement is a good way to segue into the benefits.
On the initial call tell the customer that you offer service agreements for HVAC or plumbing maintenance and that the tech coming out will give them some information.
When the tech arrives, they can leave a short one-pager that details the benefits and costs for signing up for a service agreement.
When the work is finished, the tech can let the customer know how much they would save on today’s call if they have a service agreement. They could also add in the savings of signing a multi year maintenance agreement vs if their unit were to complete break.
This opens the door for a discussion on preventative maintenance. Nobody likes a pushy salesman, so try to offer suggestions or different tiers of agreements. Even if customers don’t buy right away, they now have some information on the program.
3. Offer Incentives or Spiffs to Staff
Many service companies offer a short term bonus or spiff for each service agreement an employee sells. “Spiff” stands for Sales Performance Incentive Fund. Spiffs are usually small bonuses given in cash or gift cards.
Incentive programs are usually more long term than spiffs. An example of this would be a sales trip earned for hitting a long term sales goal.
This gives the technicians goals concerning the number of agreements sold and a healthy competition among coworkers.
Make sure the rules are clear before implementing incentive or spiff programs such as:
- Who is eligible
- Determine what the incentives are. (Cash, gift card, vacation day, etc.)
- Timeframe: how long does the program run?
- How many agreements must be sold?
- Budget to make sure there’s funds to pay the spiff!
4. Make Sure The Price is Right
Pricing service agreements can get tricky. You have to make sure you are making a profit on them without overcharging customers and scaring them away.
Here are a few things to keep in mind when deciding on the cost of your service agreements:
- Check out Your Competitors: It’s necessary to know your market and see what the going rate is for service agreements in your area. Price your agreements competitively within a range of your competition.
- Never be the LOWEST Price: If you are the lowest price in town, customers tend to think they are getting low quality service.
- Don’t Lose on Agreements: Some businesses use to lose money on agreements and make it up on other jobs. This is a quick way to become unprofitable. One way to avoid this is to define an agreement pricing model to ensure that your program is bringing in the right amount.
5. Use Service Agreement Software to Streamline the Process
Running your maintenance agreement program using service software can allow you to increase the number of agreements and manage them efficiently. In fact, service software is what can get you to your next level of growth and allow you to expand your services.
FieldEdge service software can automate your service agreement program with a host of features that include:
- Alerting your staff when service agreements are due for renewal, billing and scheduling
- Sending reminders and invoices to customers automatically
- Helpful dashboards that show agreement expirations
Want to excel in the service agreements game? Sign up for a FREE demo to explore how FieldEdge can help your maintenance agreements program thrive!
Maximize Your Service Agreement Sales!
You now have a series of steps to help you sell more service agreements. You are set up to succeed and your customers will be more at ease with equipment that runs better and more efficiently.
In this blog, we covered:
- Providing clear value to the customer
- Offering incentives to customers
- Offering incentives to staff
- Ensuring the price is ideal
- Using service software to assist with agreements
Reated: Maintenance Agreements: How Much Should You Sell Them For?
