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 turns a one off into a relationship with a schedule. The moment to sell one is while you still stand in front of the unit.

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. The visit belongs in writing.

• What gets checked, in the order it gets checked, so the report has a shape.
• What the visit replaces as standard, filters typically, and what carries a separate charge.
• 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 gets signed and the year passes. Nobody books the visit until the customer asks, usually after deciding the plan was worthless.

The job repeats from the day the agreement starts. Every visit then lands in the jobs table four weeks ahead, with its customer, site, person and lines. The visit that arrives with nobody arranging it is the entire product the customer bought.

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

The equipment sits against the site. What is there, when it went in, its warranty expiry, and its service history. 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 standing to raise replacement early. A customer who has read your reports for six years rarely goes 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 nearly always has one cause. The visit ran late, or the report never arrived, so the customer never saw 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
• The visit's checks, replacements, deliverables and exclusions all go in writing
• Priority attendance carries its own price, apart from the service visit
• The repeat starts on the day the agreement does, never a year later
• Visits group by suburb, using the four weeks of forward visibility
• The unit's history stays on the site, and second year renewals get measured