Let’s face the facts – acquiring customers isn’t cheap. It costs quite a bit to run digital, TV/radio and outdoor ad campaigns. So why do so many home service companies consider the customer finished once an installation or repair is complete?
That’s where maintenance programs (or maintenance agreements, club memberships and all kinds of other nicknames) come into play. They keep you top of mind – and in the homes – of your customers after the initial job is done. Considering a membership program may leave you with several questions:
- What Is A Maintenance Program?
- How Does A Maintenance Program Benefit A Homeowner?
- How Does A Maintenance Program Benefit A Home Service Company?
- Can Memberships Bring In New Clients?
Leadhub has invested a lot of time into marrying our marketing efforts with the operations of our clients. While repair and replacement services classically boast the biggest ROI, maintenance agreements can have a huge impact on your total revenue. Membership programs are a great tactic to use — to help your customers’ comfort AND to retain them for future services.
What Is A Maintenance Program?
Maintenance programs are, essentially, just what they sound like. They’re either monthly or annual subscriptions for regular maintenance on equipment, usually with some perks thrown in along the way.
“The name of the game right now is recurring revenue,” said Aaron Watters, the CEO at Leadhub. “You see it in software and other products going from a one-time purchase to a monthly or annual subscription model. This keeps your company from being a one-time transaction to the homeowner.”
Maintenance programs can be charged monthly, annually or at other periods that match the operations of your company. The key is to set up that recurring opportunity to keep a local homeowner on good terms with your company — and paying you regularly for services!
How Does A Maintenance Program Benefit A Homeowner?
As a company in the industry of serving people, every service you provide should first and foremost help your customers. Maintenance memberships offer homeowners a host of great benefits — both on their equipment and for their convenience.
HVAC Memberships
HVAC memberships are the most popular in the trades arena. The big draw in the world of AC and heating company maintenance memberships is the bi-annual tune-up.
Homeowners pay a yearly fee to be part of the program or club, and the HVAC company automatically schedules tune-ups for them in the fall and spring. Most of these memberships will also include things like discounts on repairs and priority scheduling for the homeowner as well.
Memberships For Plumbing, Roofing + More!
Maintenance programs are smart for just about any home service company. Here are a couple of examples of how other services besides HVAC can utilize them effectively:
- Plumbing: Plumbers can offer water heater flushes, pressure checks and inspections. Commercial plumbers can also offer business-specific maintenance, like hydrojetting high-volume areas in restaurants, for instance.
- Roofing: Roofers can offer geothermal heat inspections, roof rejuvenation, roof shampoo and leak detection around eaves.
- Water Filtration: Water softener companies can offer salt deliveries and regular check-ups to ensure that the customer is adding the right amount of salt to the machine.
If you’re in the trades business, odds are that your equipment benefits from regular professional attention. Packaging this service into an easy and convenient program for local homeowners is the most effective way to ensure the service is being completed.
“With any of your big-ticket items that are expensive, it’s wise to have some sort of assessment on an annual basis,” Watters said.
Homeowners can rest easy knowing the technician coming to their house knows their system, its history and what it needs. They also get educated on their system warranty and what goes into keeping their system healthy, which is a win-win for the customer and company.
“The more you can educate a consumer, the larger the lifetime value of that customer will be for the contractor,” Watters said.
How Does A Maintenance Program Benefit A Home Service Company?
It’s not just about the customer receiving perks! Maintenance club memberships help your business in several ways.
Recurring Revenue
The most obvious benefit is the recurring revenue. Locking in annual or monthly fees for your members can be a great way to solidify your expectations for the year. While this isn’t going to be something that takes you from the red to black, these programs can result in big-ticket items.
One of Leadhub’s clients sees about 10% of their membership database buy new HVAC systems each year! When it comes down to it, that kind of ROI can make a huge difference.
Keep Your Techs Working
In addition, these programs keep your technicians busy during the off-peak seasons. Not only are they handling tune-up and maintenance calls when repair and replacements aren’t as common, but they’re also getting opportunities to cross-sell or upsell your members for the coming seasons.
“Keeping technicians busy in shoulder seasons is important, and these maintenance calls help keep techs employed and not looking for other jobs,” said Ben Hubbert, the founder of Leadhub and Champion AC.
Because the systems you install are being properly maintained, this also helps keep your company’s peak-season focus on acquiring new business instead of making repair calls to your current customers.
It also plays a role in ensuring your company’s reputation stays positive. Customers often blame the contractors – and not themselves – when their HVAC equipment breaks down because the filters were never changed or the system never received a tune-up.
Client Retention
Primarily, though, maintenance programs revolve around client retention. As we mentioned earlier, you likely paid a lot of money to acquire each customer, and you want to stay in front of them throughout the lifetime of the equipment. That way, they call you instead of the competition the next time they have a repair or replacement.
Can Memberships Bring In New Clients?
Maintenance programs may not be designed for new customer acquisition, but it can be a happy consequence of using this strategy.
When you have an established, tenured relationship with a homeowner, they’re going to be far more likely to recommend your business to someone else. In other words, these subscriptions should be helping build your customer database all year long.
This comes into play in a couple of different ways.
Home Services Expansion
The natural progression of a home service company is to offer as many services as they can fulfill. An HVAC company, for instance, can grow to bring on an electrician, plumber or drywall repairman.
With a maintenance program in place, your business now has a database of members with regularly scheduled appointments that your company can use to cross-sell new lines of business as you add them on.
One of Leadhub’s HVAC clients used this strategy to perfection after adding electricians to their lineup. They ended up launching electrical services with no marketing for 18 months. All they did was cross-promote while on HVAC maintenance calls, meaning each new lead had an acquisition cost of $0.
Evaluating Your Business’ Health
The customer database is also important for the future of the owner of a home service company. With the way the market is consolidating, the customer database is your company’s baseline sense of health.
If a business owner is looking to exit the business – whether it’s a year or 10 years down the line – building up a customer database of recurring revenue is what private equity firms want to see.
Launch Your Membership Program Today!
Are you ready to launch a membership program but need help marketing it? Our team has extensive experience helping brand, organize and market membership programs to help our clients secure supplemental revenue throughout the year. Take your home service company to the next level with a free discovery call with one of our experts here at Leadhub.
