Maintenance programs are a crucial element of any well-rounded HVACR service department. An effective HVACR maintenance agreement program provides multiple benefits for contractors and customers and offers business owners a steady, year-round source of revenue.
HVACR maintenance programs can be complex, but successfully managing all the moving parts of such a program, results in increased revenue and profitability, new revenue opportunities, new leads, and enhanced customer satisfaction that more than make up for the investment. Maintenance agreements provide such a wealth of opportunities that are a foundational piece of HVACR business success. For contractors, it is easy to create a pitch – preventing costly repairs, and showing the cost savings of energy efficiency, and longer-lasting systems. But to have a successful Maintenance Agreement portfolio, you should know the why from a business standpoint.
Here are 10 key benefits of maintenance agreement programs that all HVACR business owners should know:
Loyalty: HVACR maintenance agreement programs help contractors build a dedicated base of loyal lifetime customers. Maintenance agreements tend to have high retention rates and offer the opportunity to build trust by taking care of customers year after year. With most agreements, technicians will see customers up to four times annually. This familiarity and quarterly service breeds trust and trust builds loyalty.
Referrals: Lifetime clients generate positive referrals and support your online presence with positive reviews. The better your reviews, the more your business grows.
Year-round revenue: Residential maintenance agreements keep technicians active throughout the year, regardless of the seasonal shifts common to the industry. Effective maintenance means scheduled, predictable yearly income instead of seasonal spikes with reactive repair and emergency replacement. You can run your business smoothly without having to suffer ebbs and flows that may cause you to dip into savings.
Year-round replacement opportunities: Besides providing preventative maintenance services regularly, maintenance agreements allow contractors to develop a lead pool for future replacement opportunities. Proactive agreement performance reviews will position the contractor to discuss budgeting equipment replacements. As equipment ages, you can talk to clients about future replacements, energy code changes, or refrigerant changes. Continuous maintenance means more opportunities to upsell and present new equipment options. The best part is that now when you make a recommendation it is less of a “sale” and more of a recommendation because you have built a long-term relationship with these clients, engendering trust in the expert services you offer.
Year-round employment: In addition to the year-round revenue which helps you keep your business running well and predictably, maintenance agreement programs provide consistent and steady work year-round for technicians. With a labor shortage and lack of highly trained candidates, the best defense is to retain your top talent. Year-round revenue remedies the slowdowns that can lead to seasonal layoffs.
Accessory sales: Maintenance agreements connect contractors with clients for future business opportunities on replacement items such as UV lights, filters, and humidifier pads. This is an opportunity to expand sales, expand vendor relationships, and add revenue.
Education opportunities: Based on the client relationship enabled by maintenance agreements, technicians have a unique opportunity to educate clients on other services and accessories the company offers. One of the most effective marketing tools in social media is educational content. As a field service business, you have the opportunity to reach companies in person with educational content and help them see why certain upcoming services or equipment may be the right choice. It’s a very auspicious opportunity if it’s positioned well. Maintenance visits help you do that.
Warranty maintenance: Regular maintenance is a requirement of many manufacturer warranties. Ensuring that equipment is protected enhances the customer experience and delivers value. Value only helps bolster long, well-established customer relationships.
Reduce emergency breakdowns: One of the main benefits of maintenance agreements for customers is that they can guarantee their equipment gets serviced regularly. Just like we maintain our cars to keep them running, our HVAC systems must be maintained properly to remain efficient, safe, and reliable. Properly servicing HVAC equipment will result in decreased downtime. Keeping up with maintenance will help reduce emergency breakdowns and save money as well. Overall operating costs are reduced when equipment is maintained, and customers will see a reduction in utility costs over time.
Workforce retention: Year-round employment is a must if you want to retain technicians. Research has shown job satisfaction is improved and stress is reduced knowing seasonal swings don’t impact employment. Optimizing the employee experience is critical to retention rates and continuity, during today’s ongoing skilled labor shortage.
Underpriced Maintenance Agreements
Maintenance programs must be profitable. While maintenance agreement programs are essential, many business owners severely underprice their membership agreements. Many contractors fear that the investment required to create an effective program won’t be recouped, or they will lose participants if they increase maintenance program prices.
When contractors underprice their agreements, they are also conditioning their customers to low prices for other services they offer. When membership programs are sold strictly at a low price or based on all the discounts a client can receive, it devalues the company and conditions clients to the idea that all future work will be discounted. That’s a big hurdle that many dealers need to overcome.
Envisioning a Profitable Maintenance Membership Program
Understanding how to develop, price, and manage these programs properly is crucial to the company’s long-term success. Many strategies can be employed, but they all have the following features in common:
• A vision to create a profitable and growing maintenance membership program.
• A solid plan to achieve the vision.
• Putting processes and procedures in place to ensure a solid foundation for growth.
• Employing the right strategy and tactics for their company and market.
• Consistent leadership.
• Belief, buy-in, and commitment from the team.
• Clearly communicated goals for the department and individual team members.
• Reporting to measure growth and retention rates.
Maintenance agreements keep teams working and protect profitability. They help lock in customers and create lifelong clients, and many revenue opportunities become available through maintenance agreement programs.
HVAC systems must be properly maintained so they can remain efficient, safe, and reliable. Properly servicing the equipment will decrease downtime, offer better performance and greater efficiency, and overall customer satisfaction supporting your company’s success and growth.
Click the button below to download two free sample maintenance agreements.
Jennifer Shooshanian is a Senior Service Coach and Trainer with Business Development Resources (BDR), the premier business training and coaching provider to the home service industry. With over three decades of experience specializing in HVAC Service Operations Management, Jennifer is one of the most knowledgeable and accomplished service performance experts in the United States. Her classes offer structure, growth, and profitability strategies that will help dealers recognize the tremendous profit potential of a well-structured service department. Learn more about BDR at www.bdrco.com.