Include planned maintenance programs on your website for potential new customers to easily see
Planned maintenance is a real win/win scenario—everyone benefits. The customer gets regular service, scheduled at their convenience, at reduced prices, and better life cycle equipment value. The contractor has more control over scheduling and builds up a steady revenue stream. The employee gets more work during the shoulder season and the supplier gets greater lead time on providing parts. And, most importantly, it adds value to your business when it comes time to sell. So, what are you waiting for?
One way to approach a new prospect for “planned maintenance” (PM) is for the contractor to meet with the customer to identify which assets should be put on planned maintenance. Highlight why that particular asset should be included. Often the motivation is to avoid downtime, avoiding the cost and inconvenience of weekend call outs, improving the efficiency of systems, lowering lifecycle costs by reducing operating costs, and expanding life expectancy of the equipment.
Use your resources
By scheduling the maintenance at a time convenient to the customer, it creates goodwill. Don’t forget to check the manufacturer’s manual for a list of preventative maintenance tasks that should be done. This ensures you are offering a comprehensive program. That may prove necessary to maintain equipment that is under warranty.
When you and the customer have identified the specific equipment to be included in a PM program the next step is to document the preventative tasks to be included, then develop the schedule and put a pricing policy in place.
As an add-on, I recommend making a menu of items that will need replacement over time but are not included as part of the PM. This would include pricing for replacing motors and other such components. That means when a component needs replacing the pricing is already in place. This speeds up the replacement and discourages the customer from getting other pricing.
Putting together a script that is customer-focused is essential. I have often asked contractors if they do have a script; the one I most often see is a tri-fold brochure. However, when I visit contractors’ websites, I rarely see much about planned maintenance programs.
There are numerous advantages to the contractor in putting PM programs in place. It creates customer loyalty (which is now more than ever critical) and allows the contractor to schedule the PM work in shoulder seasons, thus minimising peaks and valleys in workload.
Another advantage to PM work is that as it builds the relationship with the customer it allows us to recommend other work that they might need.
Business in the time of COVID
Now that everyone is focused on indoor air quality and water treatment, this is the perfect time to highlight the virtues of these areas and protect your customers by offering them these services.
We sometimes forget to look at the lifetime value of our customers. Some organizations never seem to learn, and others are very good at it.
Motor vehicle dealerships tend to be weak in this area. How often does the dealership you deal with contact you to offer advice or free extras? In my experience, this is a rarity. However, when you go to your local supermarket with an issue, they do realize that you are not just a “jug of sour milk” but that as a family, you likely spend $400 per week there and could be a 20-year customer. That totals potential sales of more than $400,000.
This is also why many software companies don’t want to sell you software, they want you to lease it. They make a lot more money and you can use the system on a cloud base, so you don’t have to load it on to your computers and do updates. Think Microsoft Office. It also makes it very difficult for you to break away from that provider.
Table 1 offers a simple example of lifetime value for a residential HVAC contractor.
Every time you add a PM customer, you are enhancing the value of your business. Once you have done this, the next step is to get referrals from your customers. Each referral will add $11,000 in future revenue. Next, you look at increasing the value of the service calls, increasing the frequency, and increasing the retention from 10 years to 15 years. Do all that and you have a strategy for success and for increasing the value of your business.
How to get prospects for PM
If you send out a flyer in your neighbourhood to 500 homeowners offering the first service for free if they signed up for a three-year PM program and 100 accepted the offer, you would have potential sales of $111,000. If your cost for a $300 call is $150 then you have spent $15,000 to generate $111,000 in revenue and you will get that back on the second call. If you offer the first call at 50 per cent off, it reduces your acquisition cost by 50 per cent. Whereas if you advertise your services in newspapers and on the radio, you are spending money with no guarantee of revenue. Apart from the cost of the flyer and the unaddressed mail-out, your out-of-pocket cost is zero unless you get the sales.
Do you do neighbourhood “door hangers” after each call? Do this offer through social media and your costs are even lower. That brings us to the topic of social media which I will not address here other than to ask how effectively are you using it?
The above example is for a residential HVAC contractor. Commercial contractors will get much better returns as the average value of a customer is significantly higher. Plumbing contractors will also benefit by offering preventative maintenance programs. Companies that offer both HVAC and plumbing would really score from this process. Make this your New Year’s resolution and stick to it!
For more information on this topic, please visit www.plumbingandhvac.ca/wp-content/uploads/2020/12/Lifetime-Value-withcover-2013.pdf