Service agreements: one install, ten years of visits

An install is a good day. It is also the last time that customer has any reason to ring you, unless something goes wrong.

A service agreement changes that from a one off into a relationship with a schedule, and the moment to sell one is while you are still standing in front of the unit you just installed.

Sell it at handover, not by letter in year two

At handover the customer has just spent real money, the equipment is in front of them, and you have their attention. A servicing plan offered then reads as looking after the investment.

The same offer posted eighteen months later reads as marketing, and it competes with whoever quoted cheapest in the meantime. The conversion difference between those two moments is the whole business case.

Say what the visit includes

A plan sold as an annual service is vague enough that the customer cannot tell whether they got one. Write the visit out.

• What gets checked, in the order it gets checked, so the report has a shape.
• What gets replaced as standard, filters typically, and what is charged separately.
• What the customer receives, which should be a written report rather than a verbal all clear.
• What the plan does not cover, particularly breakdowns, parts and after hours attendance.

The exclusions are where the goodwill is won or lost. A customer who believes the plan covers a compressor failure will be angry exactly once.

Price priority separately from the visit

The visit has a cost you can calculate. Priority attendance in a heatwave is a different product, because what you are selling is capacity you have deliberately kept free.

Charging one price for both means the plan looks expensive against a competitor selling only the visit. Splitting them lets a customer buy the service and add priority, and it lets you say honestly what priority costs you.

Schedule the visits when the agreement is signed

The failure mode of a service plan is administrative. The agreement is signed, the year passes, and nobody books the visit until the customer asks, which is usually after they have decided the plan was not worth it.

Set the job to repeat when the agreement starts, and every visit lands in the jobs table four weeks ahead with its customer, its site, who is doing it and its lines. The visit that arrives without anybody arranging it is the entire product the customer paid for.

Four weeks of visibility also lets you group them. Servicing four plans in one suburb on one day is the difference between a plan that pays and a plan that breaks even.

Keep a record of the unit, not only the visit

Hold the equipment against the site: what is installed, when it went in, its warranty expiry, and what has been done to it. That record is what makes the fifth visit better than the first, because the technician arrives knowing the history.

It is also the replacement conversation. A unit with a documented service history and a known age gives you the standing to raise replacement before it fails, and the customer who has been reading your reports for six years does not go to tender.

Count the renewals, because that is the number

The measure of the plan is not how many you sell, it is how many renew after the second year. A low renewal rate is nearly always the same cause: the visit happened late, or the report never arrived, so the customer could not see what they bought.

Both of those are scheduling and paperwork rather than pricing, which makes them the cheapest things in the business to fix.

What to do first

• Offer the plan at handover, while the unit is in front of the customer
• Write out what the visit checks, replaces, delivers and excludes
• Price priority attendance separately from the service visit
• Set the repeat the day the agreement starts, not the year after
• Group visits by suburb using the four weeks of forward visibility
• Keep the unit's history on the site, and measure second year renewals