FieldEdge Featured Post: Maintenance Agreements - The Key to Steady Revenue
Maintenance (or service) agreements are your key to more revenue AND happy customers. When you sell maintenance agreements, you’ll gain:
- Steady revenue streams
- Loyal customers
- Fewer emergency calls
Both your company and your customers will benefit from service agreements. And if selling something new seems intimidating, we have tips for that, too!
Let’s get started with the basics of maintenance agreements…
What is a Maintenance Agreement?
A maintenance agreement (or service agreement) is a contract between the dealer/business and the customer to perform regular, preventative maintenance, such as cleanings and/or tune-ups for a set price.
For residential customers, agreements often cover one or two maintenance visits each year. For commercial jobs, maintenance visits may occur quarterly.
Maintenance agreements are vital to the financial health and long-term viability of any HVAC or plumbing service business. But how exactly do service agreements benefit you and your customers?
- Keep your techs busy all year: We all know that the HVAC business is seasonal. By offering maintenance agreements, you can easily schedule maintenance visits during the winter months. This will ensure that your techs will have work during slower months.
- Recognize recurring revenue: Often, service agreements are paid in monthly or quarterly installments. This provides a steady cash flow year-round for the business. Plus, more than 80% of customers renew their maintenance agreements, which allows for continued revenue year-over-year. Want to learn more? Read about maintenance contracts here.
Selling Maintenance Agreements
- No more emergencies: Customers want a peace of mind knowing their system is going to function properly. By offering a maintenance agreement, you can ensure that emergencies are much less likely to happen when their system is well maintained.
- Pay a little, save a lot: The monthly or quarterly payments that you receive from the customers not only helps your cash flow, but also the customers. It’s easier for them to commit to a small recurring payment rather than paying a large lump sum. When selling agreements to customers, show them the cost savings - a two- or three-year maintenance agreement is much less expensive than a new HVAC unit.
Now that you know the benefits of maintenance and service agreements - how do you convince your customers to sign? Here are our top tips:
Managing Maintenance Agreements
- Call it an “Agreement” instead of a “Contract”
- Charge monthly instead of annually
- Set individual and team goals to build a culture of salesmanship
- It begins on the phone
- Use pricing tools to show immediate cost savings to the customer
- Share the wealth - pay your team commission to sell agreements
- Train your team on the details of the agreements and how to effectively sell them
- Practice, practice, practice - role play, scripts and shadowing can help your team feel comfortable selling
- Motivation through recognition - leaderboards, raffles, staff meeting shout-outs
- Deliver on your promises - automate scheduling, payments and renewals to make it easier
We shared the benefits and key tips for selling maintenance agreements, but what are some of the hurdles you may face when launching and growing a maintenance agreement program?
- It’s too hard to track active agreement customers and remember to renew them every year
- It takes too much time to call agreement customers and schedule maintenance visits twice a year
- No way to automate the billing and renewals
Of course, you can overcome these hurdles with a good Field Service Management platform, like FieldEdge, but there are many others out there. Be sure to find the one that is right for your business.
Want to maximize your business with service agreements? We have something FREE for you! Download our resource here to help you sell maintenance agreements