Should My HVAC Company Offer Service Agreements?By My Service Depot on Tuesday, October 16, 2018
Want to explore HVAC service agreements and start offering them to your customers? Find out how to make it happen!
Preventive maintenance agreements offer a lot to HVAC businesses, but many business owners aren’t sure where to start. Some companies aren’t convinced of the benefits, either. If you’re asking yourself, “What’s in it for me?” then this article is for you!
Believe it or not, HVAC service agreements have something to offer everyone. They help customers, employees, and HVAC businesses. Not convinced? Keep reading to learn more about why you should offer these contracts to your customers. We think you’ll be blown away by the benefits.
Defining Service Agreements
First, let’s define a service agreement so we all know what we’re talking about. A service agreement is an ongoing maintenance contract that HVAC customers can enter into with your business. Preventive maintenance plans can sometimes work alongside warranties and insurance plans, but you should consider them completely different animals. Warranties only kick in when something goes wrong, but you’ll perform preventative maintenance work even when nothing bad happens. In fact, that’s kind of the idea!
Maintenance contracts enable customers to prepay for maintenance services on their HVAC systems. HVAC companies typically schedule this maintenance during slow periods for their business. These contracts hinge on the idea that preventative maintenance on an ongoing basis keeps the HVAC systems in better working condition. For the HVAC business, it also provides the company with ongoing work and revenue during slower periods of the year.
Advantages for Your Business
For your business, these contracts help you manage service demand ahead of time. Outside of peak seasons, many HVAC businesses sometimes find themselves with limited workloads. Offering service agreements helps to change that. You know in advance how much labor and services you’ll need to provide, making it much easier to project your overhead costs and plan your budget. If you have slower periods during the year, you can sign up service agreement customers to provide you with more consistent revenue.
In other words, service agreements make business life more predictable and stable.
Advantages for Your Customers
Preventive maintenance agreements serve as a great source of revenue for your business, and they can also provide a strong bargain for your customers. Keeping their HVAC systems in tip-top shape will head off expensive repairs or equipment replacements in the future. To the customer, it often makes sense to pay incrementally and avoid huge, disastrous, expensive repairs after something goes wrong.
Additionally, many HVAC companies offer their service agreement customers priority scheduling and better deals. If your AC breaks in the middle of summer, you’ll want to fix it lickety-split. Customers will want a way to move to the front of the line, and service agreements help them build a great relationship with your business. Always mention service packages to your best customers and invite them to save with preventative maintenance.
Advantages for Your Team
Service agreements are great for HVAC employees and technicians. With more service agreement customers, your business can have more consistent revenue to pay for labor. You can afford to offer more hours to your employees and actually have something for them to do during the off seasons. No one wants to “go clean the shop again” during those slow offseason months.
Also, maintenance can represent desirable work for your technicians. Think about it—preventative maintenance means lower stakes and less stress. Who really wants to hear frustrated homeowners yelling at them all day long because their AC broke?
Disadvantages of Service Contracts
Of course, everything has disadvantages, even service contracts.
For your business, service contracts may mean a modest reduction in the services some customers will need. If their system was going to break down without preventative maintenance, then you’ve potentially lost some business there, at least in the short run. But, isn’t it better to have more customers and have them maintain their systems with you every year instead of waiting for the year when everything breaks?
Managing service agreements also adds a layer of complexity to the administration of your business. If you don’t know where to begin or how to go about offering service agreements, consider investing in HVAC software that features a service agreement component.
Who Should Offer Preventive Maintenance Contracts?
To see if service agreements would work for your business, you may want to start by asking around. Find out if your customers would even be interested. It’s very possible that a lot of your customers would like to save money by keeping their HVAC systems from breaking down. Preventive maintenance contracts offer significant wins for everyone involved, so you really can’t lose.
Some of your corporate clients might find service agreements appealing since so many businesses plan their budgets and expenses on a quarterly and annual basis. Already familiar with the need for a strong return on investment, businesses can make ideal customers for service agreements. They can often see the savings potential and readily understand how maintenance helps them get more value from their HVAC systems.
How To Get Started
To start, think about how you’d package your maintenance services for different clients and different needs. You could break-up a yearly maintenance plan into several appointments, for instance, and plan what these services entail for your customers and how much they would pay each month or quarter. From there, create package deals that your customers can compare and choose from. Offering different payment plans and options could also be very attractive to customers.
Offer different levels of packages for your customers and have a menu of options that appeal to different clients. For instance, think carefully about how you can package the maintenance work you recommend for specific HVAC systems and for specific customers. You could offer separate corporate and residential residential packages, sized and priced accordingly.
You can also look ahead at your year and identify slow periods where you’ll need the revenue and the work. Talk with your customers and schedule service times to align with your business’ needs. If you can pass on some savings to your customers, they’ll probably be very grateful, even if this means their service dates fall during non-traditional times of the year.