Dictionary.com describes the word “doldrums” as “a state of inactivity or stagnation.”
If you are in the HVAC service and repair business you have likely experienced the doldrums. Those times when demand service drops due to a convergence of factors such as transitioning from one season to the next. Or, experiencing times where the weather may be unseasonably mild and like Goldilocks’ porridge, “just right,” that is “not too hot and not too cold.” Nice to live through, but bad for business. Or it may be you hit the trifecta and you’ve had unusually mild weather, then enter “ in-between” seasons and you also have a sluggish economy. The result is no work.
To make matters worse, everyone is talking about the slow economy and the mild weather. Even the newscasters and meteorologists! Like you really need to hear about it over and over.
Learn about weather changes
Some say the mild weather is caused by El Nino or La Nina. This website will explain the scientific reason for unusually mild weather citing the ocean temperature and the trade winds.
Regardless of the cause, when you’re in the doldrums it’s tough. Now there are things that you can do to impact your service business in slow times. Some are simply good business practices to stay in the public eye. Others are directed more to your customers of record.
Take a look at your website to be sure that you are providing valuable information to customers when they land on your website. Let customers know the services and the value you provide. Work with a professional marketing company to assist with SEO (search engine optimization) and SEM (search engine marketing). It has been said, “It all starts with the sale.” However, sales are generated by marketing. Your website is a big part of successful marketing for every company today.
Part of your marketing should be through social media. Facebook, Twitter, Instagram and Snapchat can help stimulate business. Be sure to keep your postings up to date on social media. “Followers” may be customers, but they may also be potential customers.
A company blog will help you disseminate information to the public. Your blog posts should be informational and educational. If you don’t possess the skills of Walt Whitman and you can afford it, you may want to hire a blogger. Be sure to blog enough times that your blog followers have a reason to stay engaged with your company.
Home Performance Audits
Many service companies have become performance specialists, looking at the house-as-a-system focusing on comfort, safety and health of the inhabitants, as well as the efficiency of the heating and cooling system. Most contractors entering this arena join organizations to learn the latest techniques to measure, record and then recommend accordingly. By advancing their knowledge about optimum system standards, they elevate the professionalism of their companies and benefit in slower times from additional work and revenue generated by prior and current performance testing.
Another way to add work and revenue in slower times is by offering and selling maintenance agreements and scheduling those maintenance visits when times are slow.
There is a lot to say about maintenance agreements. Done right, maintenance agreements can transform your company by generating revenue and smoothing out your workload.
Above everything else, there are three things to remember about maintenance agreements:
- First, maintenance agreements give you a customer list to work from when times are slow. The reason is simple. Agreement customer tuneups should always be scheduled in off-peak times.
- Second, maintenance agreements will allow you to keep earning money, year after year. Maintenance agreements should lead to repeat business as well as add-on and replacement sales.
- Third, maintenance agreements provide you customers for life. If you provide great service, you can and should expect your customers will be there year after year.
Maintenance Agreements - Getting Started
So, how do you set up and build a great maintenance agreement business?
- Commitment. Moving your business into selling a new product can be challenging. “New product,” you say? Yes, if you sell and service air conditioning equipment, you’re dealing with hardware sales by way of equipment and parts. Maintenance agreements are different because your are selling a concept and peace of mind. No hardware there, just soft sales. You need to have a “how to” process and your company needs to be committed to the program and stay committed to selling agreements everyday.
- Pricing. Many companies fail when it comes to pricing by making maintenance agreements too low (usually) or too high priced. Consideration needs to centered on the types of equipment your company installs, services and maintains. One size doesn’t fit all, but too many offerings with different pricing is confusing for both your employees and your customers. Once the pricing has been decided, how will you allow the customer to pay? Will you accept payment monthly (recommended), quarterly, semi-annually or annually? Pricing and collection routines are very important.
- KISS (Keep It Simple Silly). Some say curiosity killed the cat. When selling maintenance agreements the killer is complexity. Complexity causes customer confusion. Confusion causes customers to avoid and or question value. Does anyone really care if you’re offering a 15 point check up or a 21 point check up on their comfort system? Most customers don’t know the first thing about their comfort system. Why get into a point system at all? If you simply explain that you will send a trained technician to clean, check and adjust the system to ensure it operates efficiently and safely and keeps the factory warranty in tact, that’s really all you need to say. Communicate the peace of mind aspects instead of the physical actions of services rendered and the value the agreement provides.
- Training. Many service companies find it difficult to sell maintenance agreements because they go about it all wrong. They expect their service technicians to do the heavy lifting without providing the tools to make their job easier. What tools? Training tools.
- Why do we offer agreements?
- What is covered by the agreement?
- What does it cost the customer?
- How long is the coverage?
- What are the advantages to the customer?
- How does it extend equipment life?
- How does it reduce utility bills?
- How does it provide peace of mind?
- What are the advantages to the company?
- What are the advantages to the technician?
- What are the advantages to the co-workers?
There may be more that needs to be discussed in training, but this is a good start. Remember, an untrained staff attempting to sell agreements will certainly fail.
- Scheduling. This could reside under “Commitment.” If you take a customer’s money and promise you will be there to complete a tuneup as well as provide preferred service when repairs are needed, then you need to live by that agreement. It requires follow up and follow through. No excuses. A two-visit heating system and cooling system agreement requires that a tune up be done twice per year, preferably about six months apart. That fulfills the commitment made and gives the customer the best value for their money. Failure to schedule and complete visits to a customer’s home is the second most important reason maintenance agreement programs fail. That reason is surpassed only by failure of you and your staff to be constantly promoting maintenance agreements to new and existing customers.
Maintenance Agreements - Where to Begin
So, how do you begin?
There are companies and consultants that provide information and forms to get you started. Some of the best will offer a reasonably-priced package that includes a worksheet to price your agreements, a signup form to be used with customers and full-color brochures, sell sheets and reminder cards. When using these forms your company information and pricing can easily be inserted allowing documents to be printed on a color printer or better yet, at a local printing service that offers low-cost digital printing.
Cloud-Based and Desktop Software
There are still other companies that provide all of the above and also offer software or cloud-based systems to manage the types of agreements sold, track the renewals and schedule and track customer visits. There is even a system that will automate phone call reminders, email reminders and send email “thank you” messages.
Offer a Commission
It’s best to offer a spiff to your employees to encourage them to sell agreements whenever possible. Those commissions should be built into the price you charge your customer. A reasonable commission for selling a maintenance agreement to a customer is about $15. At that rate, an employee selling one agreement per day can earn an additional $3,750 per year (250 work days). Not bad for the employee. Better yet, in one year from one employee’s sales, you have an additional 250 customers committed to using your services.
Maintenance Agreement Impact
It is generally agreed that each maintenance agreement customer will provide your company with approximately $7,000 in revenue over a 10 year period. That estimate is based on dollars received for maintenance agreements, repair work and add-on and replacement sales.
Coming Out of The Doldrums
Certainly, there are conditions beyond our control that affect business. However, being proactive with a solid marketing plan with emphasis placed on items above should shorten the slowdown.
Beyond a well-planned marketing program, working more closely with customers by offering performance testing and promoting maintenance agreements may avoid the doldrums all together.
The Best Time to Start?