It’s easy to list the challenges facing HVAC-system contractors today. Top among them are coworker attrition, unpredictable cash flow and low-ball tactics employed by competitors. Contractors who focus on building business via HVAC residential service agreements can overcome these problems. Developing a service-agreement program isn’t necessarily easy — it requires flexibility and commitment from everyone in the company. But it can pay off. HVAC residential service agreements: 

  • Attract and keep good coworkers. HVAC residential service agreements mean year-round work that your coworkers can depend on. Further, their jobs will be pleasant, because they’ll be handling clean, well-maintained equipment. They’ll have the opportunity to inform and educate your customers, instead of dealing with frantic homeowners faced with large emergency repair bills. Workers may also boost their pay through service-agreement commissions and may have access to more and better sales leads. Most important, your coworkers will be working for a company that offers stability and growth. And that’s key to keeping good HVAC coworkers.
  • Provide steady cash flow — even during mild weather. HVAC residential service agreements make your revenue predictable. Profits come not only from sales of the service agreements, but also from increased sales of high-efficiency equipment and air-quality products. HVAC contractors who commit to service-agreement programs ultimately see significantly improved sales-closure rates. 
  • Make it easier to compete with low-priced rivals. No one knows better than your customers that HVAC systems are expensive and important investments. Your customers have every reason to keep their systems tuned up to run as efficiently as possible — for as long as possible. HVAC-system service agreements allow you to establish and maintain good relationships with your customers, solidifying your position as the honest, quality HVAC contractor in your community. That’s how residential service agreements help you overcome your competitors’ low-ball tactics. Good customers make the smart choice, which doesn’t necessarily mean the least-expensive choice.

My 50 years in the HVAC industry have shown me — and the countless contractors I’ve helped — that companywide commitment is key to the success of these programs. You should be the first person to buy an agreement; that first sale serves as a symbol of commitment to coworkers, as well as customers.

If you’re thinking about starting a program, I can help. Contact me today.


By Ron Smith