Why to Offer Service Agreements to Your Customers

Service agreements are crucial to the business of an HVAC add-on replacement contractor, and can create a consistent, sustainable revenue stream. There are many aspects to making service agreements a part of your business: determining the pricing, length and scope of your agreement, which products you’ll include, the geographic area you’ll serve, amongst others. And most important is creating a culture where members of your company buy-in to the strategy and make it a success!

Service agreements can be a game changer for your business and help you to build a backlog of marketing leads, stay busy during shoulder seasons, and keep competitors away from your customer’s kitchen table.

A service agreement program makes sense for your company because:

• Customer retention goes up. Keep your customers loyal and happy with you and less vulnerable to competitors’ marketing.
• You will get more leads. You can turn maintenance tune-ups into parts and equipment replacement sales.
• You can upsell profitable accessories.
• By doing good work, you will earn more referrals.
• More efficient and profitable service calls lead to less overtime.
• Finally, a large service agreement base has a tangible monetary value if you eventually sell the company.

The service agreement program makes sense for your employees because:

• Keeps them working on equipment tune-ups when normal demand is slow.
• More potential income for them through accessory upsell opportunities and SPIFFs.
• They get to work for a healthy, stable, successful company.
• Fewer crisis calls with existing customers.
• Delineation of roles, with a “specialist” handling the service agreement tune-ups and a more experienced technician out selling new business and installing new equipment.

A service agreement program makes sense for your customers because:

• Their equipment is more efficient and lasts longer.
• They enjoy the service benefits of the agreement.
• By maintaining their equipment, they enjoy a better warranty.
• They can rely on your service level.

This post is inspired by a module on the EGIA Contractor University site. For more information on Contractor University, contact your B-Y territory manager.