What to Charge for Service Agreements

During this a Coaches’ Counsel open Q&A session, an HVAC Contractor in Arizona asked:

“How do I know what to charge for service agreements?”

Darrel Yashinsky of Contractor University’s Next Level Coaching program began by laying out the two goals you can hope to achieve with your service agreement program. “You can price to breakeven, or you can price to be profitable,” explained Yashinsky.

Yashinsky then explained that he feels a breakeven strategy is easier to achieve than making a service agreemeent program profitable. “What is the goal here? The goal is to build a customer relationship and to build lifetime value,” explained Yashinsky. In this way, he believes that service agreement programs are purely for building customer loyalty, and that companies should keep prices low in order to help earn a higher ticket replacement job later down the line.

Yashinsky reasons that one homeowner will have to replace their system every 10-20 years, and so if you build your company’s value in their minds, they will think of you when they eventually need a replacement. “Wrap your arms around them,” says Yashinsky.

Contractor University members can register for upcoming Coaches’ Counsel sessions by visting the Contractor University event calendar.