Ask the Experts | How to Sell More Service Agreements

Question: How should I market to make service agreement membership grow?

Drew Cameron; President, HVAC Sellutions & Energy Design Systems, Inc:

Service agreements or club memberships – whatever you want to call them – are what you call stepped engagement. You’re not going to be able to sell them over the phone, over the internet, or through direct mail.

What I mean by stepped engagement is, we have to get out there and demonstrate our services and our professionalism first. The way we do that is we promote precision tune-ups and professional cleanings, as well as when we go out on normal demand service repair calls.

Selling Service Agreements Through Tune-Ups

By promoting tune-ups, we get our technicians in the house to demonstrate our professionalism, our expertise, and our world-class service. That obviously starts with your CSRs taking those calls and booking those calls.

We typically offer discounted rates for tune-ups. If your regular tune-up rate is $139 to run a precision tune-up and professional cleaning, you might sell them for $97 as a promotional rate. Then you can show the customer your service agreement and all the benefits that comes along with it.

Those benefits might include discounts on repairs, priority service, additional tune-ups, the company newsletter, and special promotions. So, promoting service agreements through tune-ups is one way to accomplish it.

Selling Service Agreements Through Demand Service Calls

The other way I mentioned was doing it through demand service repair calls. On those, you have a couple different ways to approach it. Some contractors focus on something simple: the technician runs the repair call, quotes the repair, and tells the customer that you can save them 10%-20% (whatever you decide on) on the day’s service – Would you like to know how?

When they say yes, the technician can introduce them to your service agreement and all the benefits. Communicate to them that by joining your family, they can save, all-the-while demonstrating your professionalism, expertise, and excellent customer care.

Selling Service Agreements With Bundling

The more effective way that I have found is to bundle it with repair options. Let’s say for example, your homeowner’s contactor is bad. Odds are, all the parts around the contactor are also old. I’ll tell the customer that we should do a rejuvenation of the electrical system and all the parts that go along with it.

With that, I’ll offer a lifetime warranty on the repairs and bundle it with three years of maintenance included with that. Then I’ll step down from there. I’ll offer the bundled repairs with just the maintenance – I’ll take out the warranty. Then I’ll offer the part replacement with full warranty. Then the band-aid solution will just be the replacement of the part by itself.

By offering customers options on repair calls, typically what you’ll find is that customers will choose something in the middle, or upper-middle range. This gives them more service, maintenance, and better savings. Additionally, you’re doing a complete fix of the entire failed area, not just the one component that failed. By doing that, I see a large uptick in club membership sales.

When you’re just selling the maintenance agreements by themselves, I’ve seen that selling them as a monthly commitment is more successful than offering pricing for the entire year or multiple years. And, make sure you’re offering an agreement that never expires – tell your customers they can call and cancel anytime they’d like.

Selling Service Agreements With Tiered Offers

Lastly, I have multiple offers or various levels of service agreements. I would say anyone that’s willing to give you their contact information should get a free service agreement. What that gets them is 5% off any level of service, but there are no tune-ups included. The next level gets them tune-ups included, plus the savings and front-of-the-line service. The highest level gets them the tune-ups plus the savings, the priority service, and smart home technology where you’re monitoring the system.

That way, when you’re monitoring the system remotely, you might be able to scale your tune-ups back or coordinate heating and cooling tune-ups in the same visit. That means you’ll be able to optimize your time, reach more customers, and sell more service agreements.

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