Maintenance Agreements, A Good Business Decision - Part 2

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    By Jim D'Amico

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    In Part 1 of this series, we discussed the importance of maintenance agreements in providing additional revenue and delivering customers for life.

    So, let’s take a moment here to discuss why we are using the term “maintenance agreement” to describe what many in the past called a service agreement, preventive maintenance agreement or service contract.

    Quite simply, we think that the words you use should promote a good understanding about what you will be providing your customers.  Since virtually all agreements sold in the HVAC industry include a system maintenance tune up, we believe the term “Maintenance Agreement” promotes the best understanding for all concerned.  Maintenance is defined as “the process of maintaining or preserving something, or the state of being maintained.”

    The seasonal work that you perform on your customers’ systems under an agreement is best defined as “maintenance” because it describes precisely the work being performed.  The agreement covers component cleaning and testing, lubrication and system cycling to ensure that the equipment is “maintained” in good operating condition. In our opinion, maintenance should not include repairs to the system.

    If your company covers repairs under an agreement, what is covered and what is not covered may, at some point, lead to a misunderstanding between your customers and your employees.  Those types of misunderstandings lead to unhappy customers and that certainly is not good.

    Therefore, we recommend that repairs carry an additional fee.

    We suggest that you avoid all other terms like, “service agreement,” “preventive maintenance” and “contract.”

    In each case, when using terms like “service” and “preventive,” a customer may believe that future repairs should be covered or completely eliminated under the plan that they purchased.  However, we all know that even systems that are well maintained occasionally break down due to component failure. Therefore, it is best to avoid those words since you cannot “prevent” or cover all breakdowns for the price of your agreement.

    The word “Contract” has a whole set of issues unto itself.  A contract communicates a “meeting of the minds.” But problems pop up when what is in your customer’s mind doesn’t exactly match what is in your mind or what may be defined in the fine print of the agreement.  In fact, in certain circumstances, “Contract” has come to mean that all repairs are fully covered for one upfront fee.

    Consequently, to avoid confusion or misunderstanding, it is best to simply use the words “maintenance agreement.”

    Maintenance Agreements, A Good Business Decision - Part 3 will discuss how to get started with your maintenance agreement program.

    Already have a maintenance agreement program and want to grow it?  Check out our maintenance agreement marketing and management system, Coolfront Agreements at www.CoolfrontAgreements.com.

     

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