Operating a successful HVAC business means navigating fluctuations in service and sales. While dips in demand can be frustrating, there are ways to build recurring revenue into your business plan. And that recurring revenue is essential to building a more sustainable business.
HVAC service agreements and HVAC memberships can provide much-needed business stability. In the last decade, recurring plans have increased 400 percent. Capitalizing on this economic shift is essential to attract more opportunities for your HVAC business.
Below, we discuss the difference between HVAC service agreements and memberships and how to utilize them for HVAC business growth.
HVAC service agreement vs. HVAC membership
While “HVAC service agreement” and “HVAC membership” may sound the same, there’s a significant difference.
An HVAC service agreement is a payment plan or contract where you typically bill your customer annually. As part of the agreement, you provide your customer with regular comprehensive inspections and optimize their HVAC system for better performance.
It’s a little different with an HVAC membership. Although HVAC memberships may include the same as a service agreement, they also offer additional perks.
An HVAC membership can include routine maintenance and other benefits like a priority call-out and discounts on new equipment. Subscribers will see the value in your program and will be more likely to continue with their membership. After all, individual service calls can be expensive compared to a fixed rate in a plan.
Why memberships are better for your business
Many HVAC businesses now offer memberships rather than service agreements for one simple reason: revenue. While you might make a similar amount by selling service plans and memberships, the membership has the key advantage of allowing you to upsell.
When a homeowner purchases a service plan they expect that is all they’ll need to pay. The equipment will be serviced annually, and that’s it. With a membership, you can offer so much more, with upselling opportunities throughout the year, and especially on the back of a service.
How will my customers benefit from an HVAC membership?
An HVAC system is integral to a home’s overall function and requires regular maintenance. HVAC maintenance plans make upkeep easy and are one of the best ways to prevent more substantial HVAC issues.
An HVAC memberships benefit customers by:
- Providing ongoing maintenance to avoid major equipment failures,
- Increasing the longevity of their HVAC system,
- Managing energy costs by ensuring their system is in prime working order,
- Reducing the spend on maintenance using a fixed membership rate, and
- Offering a sense of safety and support in emergencies.
Communicating the benefits of an HVAC service agreement or membership is the best way to convert customers. While your business will benefit from the investment, so will your members.
What should an HVAC membership include?
There’s more to your HVAC membership than simply bundling your services – you also want to provide a great offer worth the investment.
The perceived value of your membership can make or break its success. You should consider including the following in your HVAC membership offerings:
- Scheduled maintenance: Customers receive routine maintenance as part of their plan. Combined with regular HVAC inspections before each peak season, your customers have peace of mind. No one wants to face an HVAC issue during the bitter cold or extreme heat
- Priority service: An HVAC membership provides reliable income for your business. Offering priority service as a reward for loyal subscribers feels like a huge benefit, especially when things get busy. With the help of AnswerForce’s 24/7 call service, you can offer priority service to your HVAC membership customers (even having their details saved so receptionists know who’s calling)
- No or reduced call-out fee: With an HVAC membership, customers can rest easy knowing they won’t have to pay bit call-out fees if they need support.
- Discounts and offers: Another way to increase perceived value is to offer financial incentives to subscribers. Whether waiving a fee or offering an exclusive discount, these benefits help sell membership.
- Additional benefits: To further your HVAC business growth, consider expanding your membership benefits. Air quality testing and extended warranties can make your HVAC membership more appealing.
How do I get customers to become members?
After creating your HVAC membership, promoting the benefits of it to new and existing customers is essential. To sell your membership, you’ll want to:
- Communicate the value: Most HVAC malfunctions are due to a lack of maintenance. Customers may need help understanding what maintenance is necessary for their HVAC system. Discussing the benefits of regular cleaning and inspections will help establish the plan’s value and show how you’ll always care for your customers.
- Differentiate between a warranty and your offering: Explaining the limitations of an HVAC warranty will help you sell a plan. You can work in tandem with the manufacturer’s warranty to fill any gaps in service.
- Be transparent with your fees: Outline the savings between a membership plan and ad hoc service calls. While an HVAC membership is an ongoing commitment, it’s a worthy investment. A recurring payment lets your customers budget better while being reassured they have a safe and reliable HVAC system. Customers may also avoid significant repair issues if they receive HVAC maintenance regularly.
What will HVAC memberships offer my business?
As your subscriber list grows, you’ll see a shift in your business. These changes will bring about sustainability and allow you to expand your operation. The impact of launching an HVAC membership or HVAC service agreement may include:
- Workload consistency: With an HVAC membership, you can schedule recurring service appointments for members, providing consistency in your business. You will know how many services you have in a year and can schedule them in the off-season.
- Reliable revenue: Recurring revenue from membership fees gives you income all year round. Growing your HVAC business is easier with a reliable income each month.
- Customer loyalty: A customer who invests in your HVAC membership plan has faith in your level of service. With so much competition out there, loyalty is a priceless commodity. Building strong customer relationships with plan members can increase referrals and upsells.
Growing sustainably with an HVAC service agreement or HVAC membership
HVAC service agreements and HVAC memberships offer valuable benefits to your customers. From ongoing maintenance to emergency repair coverage, you can provide ongoing services while building rapport.
A reliable revenue stream is a great way to expand your HVAC business. You can overcome fluctuating demand, enjoy a steady income, and support a consistent workload. In an industry that expects high and low seasons, there’s relief in steady business growth.
Ultimately, HVAC service agreements and HVAC memberships serve as blueprints for business success.
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