If you’re an HVAC contractor, selling service agreements can be a great way to secure business for your company and keep your techs busy. However, it’s important to make sure that you price your agreements in a balanced way. First, you need to ensure you’re turning a profit. Second, you need to provide good value for your customers. In this episode, we sit down with John Ellis to talk about how to sell profitable HVAC service agreements. Specifically, we cover:
- How to set the stage and start the HVAC and IAQ conversation with customers
- The real business costs of a service agreement call
- How to make your service agreements profitable
- And so much more…
Setting the Table for Profitable HVAC Maintenance Checks
As an HVAC technician, you might be surprised by how little your customers know about their own HVAC systems. On a service call, you need to spend time explaining what you’re doing and why it’s important. You are more than just the “filter guy.” You’re the HVAC expert that is there to make sure their entire system is working at full capacity. You need to set the table by establishing your value.
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For example, many clients don’t realize that their air filter needs to be replaced regularly. They also don’t know that better options exist. As the filter gets clogged, it puts strain on the system and can lead to expensive repairs down the line. By replacing the filter on a regular basis, you can extend the life of your HVAC system and avoid costly repairs. Replacing their filter with a high-grade air filter will ensure there are fewer harmful particulates in their air.
When you take the time to explain this to your customers, you help them understand the value of your preventive maintenance. Let them know you’ll perform a thorough inspection of the system on every service call. That’ll help you identify potential problems so that you can recommend repairs or upgrades before they become necessary. By taking the time to explain the importance of your work, you’re able to build trust with your customers and set the table for future recommendations.
How Much Does Each Service Agreement Call Cost Your Business?
As a business owner, you always want to be mindful of your bottom line. So when you’re looking at HVAC service agreements, it’s important to understand all of the costs associated with them. On average, a service call will cost you about $250. This includes the cost of labor, materials, and overhead. But it’s important to remember that these service calls are usually 45 minutes long. So when you break it down, the real cost is closer to $5 per minute.
The key takeaway here is to understand the true costs of your service agreements. Only then can you price them so you are at the very least break even.
Create a Menu of Profitable Service Agreements for Your HVAC Customers
When it comes to providing quality HVAC service, few things are more important than having a solid service agreement in place. A service agreement helps to ensure that customers are happy with the work being performed and that they understand the terms of the agreement. However, service agreements can also be a source of frustration for HVAC businesses, as they can often lead to lost profits.
To mitigate losses, Ellis talks about the benefits of using software menu pricing. The New Flat Rate is a pricing menu software that can help HVAC businesses not lose money on their service agreements. You simply create and provide the customer with five service agreement options to choose from. The lowest option will always ensure you’re breaking even. It’s an ideal solution for HVAC businesses that want to provide quality service without sacrificing profitability. It also takes the pressure off techs to sell. Win-win for everyone.