Service Agreements are a great way to add recurring revenue and help keep technicians happier, but how do they work? And what value will it add for homeowners?
Here’s the beauty of service agreements: both the HVAC business and its customers win. Let’s take a look at the benefits to the business, as well as the ways to add value for the customers.
What’s the deal with Service Agreements?
HVAC businesses are usually buried during the peak days of summer. When the air conditioning isn’t working and it’s 95 degrees out, customers want their system fixed quickly!
Service agreements can alleviate this burden by keeping systems in tip top shape year round! This will help you and your tech better manage service calls during peak summer months.
Service agreements contracts vary with some HVAC companies. Some offer annual maintenance visits, while others service twice a year. For commercial HVAC companies, you may even offer check ups every three months.
What are the Benefits of HVAC Service Agreements?
HVAC businesses love service agreements because they create regular revenue and further the relationship with the customer, Here are just a few specific benefits:
- Steady revenue that you can count on, which improves cash flow into your business
- More work for your employees and revenue flow during slower times of the year.
- Increase customer comfort and trust, since the techs are visiting a couple times a year and become a friendly face
- Less “panic” calls from customers during your busiest months-because your customers’ systems are serviced and working at full capacity.
- More on customer benefits to come!
It’s clear that service agreements are amazing for your business, but how do you sell them?
Tips on Selling Service Agreements
Offering service agreements is a great way to engage with your customers. For the customers they will have “peace of mind” that when extreme weather hits, their system won’t fail.
Here are a few tips for positioning your sales pitch to the customer:
- Always refer to it as a service or maintenance agreement. Once you use the word contract, some customers may feel they are locked in for years. Most service agreements cover 1-3 years of service.
- Charge a small monthly fee instead of a large annual sum. Many HVAC businesses charge for the full year at once, but that’s a lot to swallow on top of whatever service call or equipment they just purchased.
- Offer spiffs, or incentives to the technician or office person that sells an agreement.
- When training staff on service agreements, use language that resonates with the homeowner. Use terms such as “energy savings,” “increased efficiency,” “improved safety,” “reliability,” “lower cost of operation” and “extended equipment life” to peak the customer’s interest.
What are the Benefits of Service Agreements to the HVAC Customer?
Now let’s look at this from a customer’s perspective. Maintenance agreements are a great choice for many consumers. The fee for the service agreement typically pays for itself.
Here are a few of the reasons why service agreements are a good choice for customers:
- Extends the life of their heating and cooling system.
- Peace of mind knowing that their system is regularly maintained.
- Priority service and discounts for maintenance agreement customers.
- Reduced energy bill costs due to increased efficiencies.
Build Value with Additional Perks for Maintenance Agreements Customers
It’s a good idea to build value into your service agreements by offering some of the following perks and selling points:
- Discount diagnostic fees. Since they’re paying you to keep their equipment running, discounting their diagnostic fee during trips could go a long way.
- Don’t charge an after-hour fee: Some companies charge an additional fee for after-hour service. As your customer for life – maybe they’ve earned the perk of not paying an after-hour fee – regular day rate should suffice.
- Offer Priority Service: With a service agreement should come some sort of priority service, whatever it means for your business. Perhaps you could guarantee a visit within 24 or 48 business hours of an emergency call from service agreement customers.
- Replace batteries annually in smoke and CO detectors. A simple courtesy, but it might be something your homeowners would appreciate.
- Extended labor warranty on installations. If this is something within your company’s control, try extending the labor warranty on installs since you’re maintaining it anyway.
- Buy a new system, get a year’s maintenance agreement free. If a loyal customer buys a new unit from you, you may cover their first year of maintenance. After the year is up they are likely to renew the contract for another year.
Service Agreements For The Win! And Another Win!
That’s a wrap! In short, service agreements benefit both the business and the customer and can be a great way to generate new revenue. Once your customer is part of your exclusive “service agreements” club, show them some love with perks.
FieldEdge can get you started on your Maintenance Agreements adventure!! We’ll help you manage agreements and even send renewal reminders for you. Book your FREE personalized demo today!