Planned maintenance agreements are critical for the growth and stability of both plumbing and HVAC companies. 
   Maintenance agreement clients are your loyal clients. They have signed a piece of paper saying they will use your company’s services for repairs. And, many will use your company for replacements. Yes, some clients will get other quotes. However, many times it’s just to make sure your price is realistic and you will get the job.

   Remember, many times maintenance agreement clients don’t choose the lowest bid. If the client trusts you, even if your bid is a little bit higher, there is a good chance you’ll get it simply because the client knows your capabilities and your work.

   The more maintenance agreements you have, the larger your client base. This evens out the seasonal income peaks and valleys. When you do proper maintenance, the extremes don’t get much higher because the client’s equipment will work properly when it’s stressed. You’ll get the calls from non-maintenance agreement clients (which is your chance to educate them on the benefits of owning one).

   Selling maintenance agreements is a cultural activity. For your program to be successful, everyone must believe in them and talk with clients about them.

   First, what is your commitment to a maintenance agreement? Do you have one on your home? The building you’re in? Do you allow the technicians time to perform maintenance on their homes? Give the technicians the time to perform regular maintenance on the company’s office building, your home, and their homes.

   Don’t let a technician do his own home, though. Have another technician perform the maintenance…on company time. Have a technician go to your dispatcher’s home, too, and perform maintenance while he or she watches. Then, when a client calls the dispatcher can answer questions with more confidence.

   Commitment must start from the top. Make sure that you are sending the right message.

   Smart contractors have billed maintenance agreements on a recurring monthly basis. Now, more than ever, this makes sense for your clients. Here’s a radical look at a traditional program:

 

   1. Your planned maintenance agreements are billed through recurring monthly billing.

   2. $300 grocery rebate certificates are used to offset the monthly cost of the planned maintenance agreement. Your client actually receives more back (for yearly agreement prices under $625) than she invests in your planned maintenance agreement.

   3. You never have to renew an agreement again! These are perpetual agreements, which get paid each month.

   4. Flat rate pricing is used to easily demonstrate the savings with planned maintenance agreement repair prices as compared to normal repair prices.

   5. Monthly marketing to your existing client base is included. It is robotic—you don’t have to think about, design, print, or mail the postcards. They are done for you. You will see an increase in your planned maintenance client base after a few months.

   6. By increasing your flat rate hourly rate by only $3 to $5 per hour, you will pay for all of the marketing costs.

   7. You receive monthly recurring income in busy times and slow times. Make sure you save these dollars for slower times of the year.

 

   Selling maintenance agreements is a numbers game. The more people you ask, the more agreements you will sell.

   Maintenance agreement revenues should cover the overhead of your company. If the company’s total overhead is covered, then you can breathe easier when slower times come. Many times it takes several years to accomplish this. Do it and you’ll sleep better at night.

   Have at least 1,000 agreements for every $1 million in residential sales. Not there? Set the plan in place to have at least the minimum number of agreements within 2 years.

   Be your own bank. Every month, when you receive the monthly billing revenue, put it in an interest bearing savings account. This decreases your dependence on a bank line of credit. These funds accumulate quickly and can be your source when you are short of cash. Pay the interest to yourself rather than the bank.

   According to the research that I’ve done, about 30 percent of the population will invest in a maintenance agreement. This means for every three people you ask, two will say no. The key is to keep asking so that your maintenance agreement base increases every year.

   The really good companies renew 95 percent or more of their agreements every year. The only ones who don’t are those people who die, move, or learn that they have a relative in the business.

   A planned maintenance agreement program based on monthly recurring revenue and grocery rebates makes it a “no-brainer” for your client to invest in a maintenance agreement. It provides you monthly cash. It provides you predictable service work and replacements. It helps you achieve the goals you want to achieve!