$0 Tune-Ups, New Opportunities for Contractors
Comfort Institute Co-Founder and Senior Success Coach Brendan Reid shares contractor insights into service/maintenance agreements (a.k.a. $0 tune-upes). Enjoy! ///// Don’t get me wrong. I’ve loved and promoted their business benefits since being introduced to them by Ron Smith in the late 80s. The potential benefits they promise are clear: off-season maintenance and accessory revenue. Locked-in relationships. Higher closing rates when it comes time to replace equipment. Increased brand awareness and referrals. Higher lifetime customer value. Higher valuations when it comes time to sell your business. I get it. I really do. But, here’s the problem: if you are doing everything right, you end up with a bunch of nice folks with relatively young and well-installed equipment under contract, who welcome your techs with milk and cookies every six month. Your guys do the tune up, change the filter, and walk away with a warm fuzzy. Welcome to the dreaded zero-dollar tune-up. Because many clients already have it all, they already have new high efficiency equipment from you, plus the recommended IAQ accessories and hard start kits and ceiling protection switches and so on – either up front or on a subsequent tune up. Since you installed it right and are doing great routine maintenance, hardly anything breaks, and the unit lasts longer than average. Hopefully you haven’t priced your maintenance agreement as a loss leader; you might have 20 years of visits to perform before you get another kick at the replacement can. So, what’s the answer to this dilemma? How can you take your business to the next level with these satisfied clients? You have two choices. Your techs could say their perfectly good 8-year-old indoor circulating fan motor has “a lot of miles on it” and try to sell them a new one. Remember that NBC Dateline show where a D.C. area contractor tried that on hidden camera, on national TV? It did not end well. In these days of internet reviews, unethical parts selling will hurt you hard and fast. Your other – ethical – option is to diversify. Expand into other home service businesses like electrical, plumbing, alarms & pest control. While these can make sense, pause a moment and ask yourself, “Which diversification is closest to my current core products?” You may think your core products are “HVAC Equipment & IAQ Accessories”. In fact, what your customers are really buying is what those products will do for them: provide comfort and clean air. Unfortunately, over 80% of your customers are not 100% happy with their home’s comfort, cleanliness or utility bills. Before diversifying into another service trade, doesn’t it make sense to make your customers happy and add revenue by first getting comfort and clean air delivered right? How about turning those unhappy customer lemons into some tasty lemonade? My HVAC and performance contracting colleagues have found that the diversification closest to their core products was right under their nose. They got better at promoting and performing duct renovation. Testing static pressure, air flow and leakage. Return air enlargement. Hand sealing and aerosealing. And often total duct replacement. For many contractors, once they get the ducts down, offering attic insulation, crawlspace encapsulation, can light sealing and other thermal envelope measures also makes sense, either in-house or with a house doctor partner. Comfort Institute (CI) member contractors routinely implement home and duct performance projects from $2000 to over $20,000 – at typical margins of 66%+, and most without rebates. They make good money, and their clients say they’re finally enjoying the comfort and clean air they were missing. Best of all, securing these types of projects is a natural extension of the services you already offer. Most jobs start with a conversation during a tune up. Help your techs get the wax out of their ears when homeowners make comments and ask for their opinion. Teach them how to uncover pain by asking simple questions as small talk. Show them how to demonstrate leakage and undersized ducts, and present the upgrade opportunities with enthusiasm. If you are tired of zero dollar tune up tickets, remember there’s gold just waiting to be mined in your customers’ ducts and attics. Your HVAC and IAQ products will perform like never before. And your techs will get hugs and kisses, and extra personal income, along with their milk and cookies. This article was originally written by Brendan Reid, senior success coach and co-founder of Comfort Institute, an international indoor comfort research, training and consumer protection organization based in Centerville, Ohio with trainers and offices located throughout the United States and Canada. For more than a three decade, Comfort Institute has been providing the training and support that HVAC professionals need to succeed. For more information about Comfort Institute, visit www.comfortinstitute.org.