MAXIMIZE SERVICE AGREEMENTS
TO BOOST REVENUE
Contractor service and maintenance agreements are two key areas to focus on for profitability. They are the most critical sources of revenue and value for field service providers, especially in the plumbing, electrical, HVAC, mechanical, and landscaping industries.
By maximizing your contracts with new service software and a well-defined plan, you can build a solid foundation and establish a predictable revenue stream. In this article, we’ll explore why service agreements are critical to success and how the right planning and strategy can make all the difference. Read on and boost your revenue!
Why Invest Valuable Time and Money into Service Agreements?
Contractors are often unsuccessful when building and maintaining their service contract base because it requires a lot of time and patience that contractors simply don’t have. The following bad habits often create unprofitable situations:
- Managing a contract base manually or with outdated technology.
- Focusing too much on installation, emergency repair, and seasonality and not enough time on maintenance management.
- Wasting time and energy on administrative tasks that eventually pile up — record-keeping, data entry, manual scheduling, billing, and other routine office work.
Service Agreements are Critical to Success
Reliable and Profitable
You can build a reliable and profitable business that runs like a well-oiled machine with the right planning, strategy, and service agreement software. Service agreements dramatically increase the value of your business and provide a steady, recurring revenue stream. Unlike one-time sales like service calls and replacements, these revenues are more predictable, relatively stable, and can be counted on to occur year after year with a relatively high degree of certainty.
Valuable and Efficient
What makes maintenance contracts even more valuable, however, is the extra pull-through work those service agreements bring in that your company otherwise may never have been considered for. The additional work generated as a result of maintenance inspections can mean $1-$3 in additional revenue for each maintenance agreement dollar. Combined with higher profit margins, those extra dollars can be achieved more efficiently.
If your system doesn’t allow you to clearly separate out pull-through work from other work that shouldn’t be tied to the maintenance contract, you may be making poor business decisions about the profitability of your service agreements. The Solution: A user-friendly, organized platform for managing service contracts, like SAWIN management software, that will make your life easier and eliminate these mistakes.
Built-in Defense Against Seasonality and Changing Economies
Annual fees and renewal notices are becoming a thing of the past. Today, service agreements are typically sold with a perpetual monthly fee that continues until canceled by the customer. Buyers are used to pulling out a credit card, signing up for a monthly service, and forgetting about it.
Maintenance programs provide a built-in defense against seasonality and shifting economic conditions each year. In a slow economy, customers may prefer to invest in maintaining existing equipment in order to defer large capital expenditures.
Service Agreements are Beneficial for Everyone
- Service agreements are good for your customers. They can provide energy savings, reduce breakdowns, and offer peace of mind.
- Service agreements are excellent for your employees. They provide a work routine for service departments when business seasonality slows the labor demand.
- Service agreements provide a proven training ground for new or prospective service technicians.
- Service agreements help you to lock in your existing customer base.
- Service agreements allow technicians an opportunity to sell accessories and create equipment replacement leads.
- Service agreements build recurring revenue, making your company more valuable.
Spend quality time developing the right plan for your business and industry. Make sure to consider these main factors in your strategy:
- Length of the contract
- Competitive membership pricing
- Renewal options
Exclusive deals and opportunities for members, like discounts or a referral program, can entice potential customers. The most important thing to remember is that you need an agreement that is profitable for you and attractive to customers.
With enhanced contract management software, like SAWIN, you’ll effectively and efficiently be able to streamline these tasks both on-site and back at the office.
Boost Your Maintenance Agreements
A fast way to boost your maintenance agreements is to focus your efforts on your current loyal customers. You can leverage the already established trust of your current customer relationships to build an initial base. The data that is currently in your system, such as equipment records and maintenance requests, can be applied to streamline the setup.
For new customers, prioritize the contracts and include service agreement information in your marketing plan. Provide your techs and sales team with in-depth training and incentives for contract sales, so that your team better understands the importance of building a solid service agreement foundation.
It’s important to provide techs with the right tools and training to effectively sell maintenance agreements because it provides:
- Workforce confidence and better customer service
- Marketing materials to share with customers
- Easily accessible equipment and customer information, so they can recognize the right situation to make an offer
- Training material to help them answer any questions
- Convenient, transparent pricing
- A simple, easy onboarding process that streamlines the transaction for techs and customers
Optimize Contracts with Enhanced Technology
The right maintenance agreement software, like SAWIN, sets you up to tackle any job on the books with a range of features and functionality, including:
- Quickly create new memberships
- Apply discounts, schedule appointments, and generate recurring service material reports
- Customizable, flexible customer memberships
- Prioritize visits that involve older equipment and possible replacements
- Automatically track labor and material costs
- Customize additional monthly charges, opt-ins for extra maintenance tasks, membership upgrades for additional services, and much more
Manage smarter with all-in-one field service management software that provides small-to-large service contractors with the tools they need to maximize their business potential. Operate from anywhere, win repeat customers, increase productivity by up to 40%, and boost revenue with SAWIN. Request a demo TODAY!
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With over 37 years as a leader in field service management, it’s no wonder why service and installation businesses trust SAWIN for its personalized approach.